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C.A.R. had been opposing AB 2416 (Stone), a bill that creates a new kind of lien for wage claim disputes. C.A.R. opposed AB 2416 because it denies due process to the owner of the property and unnecessarily clouds title. AB 2416 failed in the Senate on a bi-partisan vote, but was eligible for another vote on the last day the Legislature was in session this year. AB 2416 required 21 “Yes” votes to pass the Senate; it only received 13. The proponents were unable to muster enough votes to bring the bill up again, and the bill died as the legislative session ended.

REALTOR® activism played a critical role in defeating what was a very bad piece of legislation. While C.A.R. worked as part of a coalition to oppose the bill, it was the thousands of REALTOR® calls, Tweets, and Facebook updates that made the difference.

Thank you to everyone who responded to the Red Alert!

Legal Update – Agency Disclosure

Legal Update
Attorney Steve Beede

On August 15, 2014, Governor Brown signed SB 1171 extending Agency Disclosure obligations to commercial property transactions. Until now, such disclosure was limited Real Property containing 1 to 4 unit residential properties. Effective January 1, 2015, this law’s definition of   “Real Property” will include: (1) properties with 1 to 4 residential units, (2) any commercial real property which is defined as all real property except single family residences, mobile homes, and RV’s, (3) any leasehold in these types of property exceeding one year’s duration, and (4) mobile homes, when offered for sale or sold through an agent.Legal Update

The target of this law is disclosure of dual agency. In the past the legislature refrained from extending the duty to commercial property transactions because it was presumed that a purchaser of commercial real estate is more (1) sophisticated, (2) of equal bargaining power, or (3) equally knowledgeable in real estate as the other party or the brokers involved, and therefor did not need this disclosure to protect their interests.  However, proponents of the new law argued that this can be a misconception that is not always true. Opponents, led by CAR, argued that the parties’ use of their own contracts and forms is sufficient to protect their interests.

To comply with this new law, agents and brokers must, in every real estate transaction provide both the seller and buyer or landlord and tenant (if lease more than 1 year) a Disclosure Regarding Real Estate Agency Relationship found at Civil Code Section 2079.16.  As with other disclosures under both the Civil Code Section 1102, et seq., and 2079, et seq., the duty to provide a written disclosure cannot be waived.  Even in the event of a buyer or seller who is out of the area and not able to meet face to face with the disclosing agent or broker.

The Agency Disclosure requirements in California first arose in the 1984 case of Easton v. Strassburger (152 Cal.App.3d 90) wherein the court held that real estate licensees owed certain duties of care to the property buyers.  Over time, the statutory disclosure duties expanded beyond agency to include the Transfer Disclosure Statement concerning the physical condition of the real property and improvements.  Having taken this step, many are wondering if the legislature may similarly extend the statutory Real Estate Transfer Disclosure obligations as well.  We’ll keep watch for this.    

NAR Testifies on Flood Insurance

On July 23, 2014, NAR testified on flood insurance before a Senate appropriations subcommittee. The hearing was called to evaluate FEMA’s first four months in implementing recent reforms to the national Flood Insurance Program (NFIP). REALTOR® Donna O. Smith (South Carolina), who is overseeing NAR’s efforts on NFIP, ably delivered testimony for NAR.

Ms. Smith testified that overall, FEMA’s early decisions to conduct outreach and provide for broader rate relief and refunds have helped to calm real estate markets. While there has been progress, NAR will continue to closely monitor FEMA’s efforts this fall when refunding all those property owners who were overcharged for flood insurance since 2012. NAR also urged FEMA to expedite particular reforms which set up a government office of the Advocate who can and will go-to-bat with the insurance companies for FEMA on behalf of home owners who challenge faulty rate quotes and flood maps.

How to Create an Eye-Catching MLS Listing and Other Top Home Selling Tips

Getting ready to sell a home takes a lot of preparation and effort, and it can be difficult to know exactly where to get started. There are many tasks that home sellers must tackle to get a property ready to list on the market, but there are a few tips to follow, in particular, that can help you sell your house quicker no matter what the conditions of the real estate market are at the time.

It’s tried and true advice that taking steps like creating an exceptional MLS listing, choosing to work with an experienced agent and correctly assessing the property’s financial value will work wonders to attract more potential buyers. Below are the top ways to close a real estate deal smoothly and get the most out of it.

Pick the Right Real Estate Agent

Numerous people have attempted to list their homes as for sale by owner only to realize that they really could have used the professional guidance of a real estate agent. The benefits gained by working with an agent usually prove to be completely worth the commission payout. Just be sure to pick one that has a reputation for success, knows the neighborhood well and is open to using new and improved tools of the trade, including advanced technology. Aside from taking most of the stress off your shoulders, an agent will also be able to handle all negotiations on your behalf, which will help accomplish a fast transaction at a fair price.

Price it Right

Pricing your home correctly is a major key to selling it. It requires doing the research necessary to find out it’s actual worth as well as how much comparable homes in your area are going for. You are likely to be unpleasantly surprised with a lack of offers from buyers if you neglect to gather this info, and instead, price your home based on whatever you feel it should be valued at. On the other hand, there is also the possibility of setting a price that’s way lower than what it would have appraised for, causing you to end up losing money in the deal.

Create an MLS Listing That Stands Out

Utilizing the MLS database is an important part of any real estate transaction, whether you’re a buyer or a seller. For a seller, it allows the property to be exposed in many more avenues and opens up an abundance of opportunities with possible buyers. However, an MLS listing is only as effective as a seller makes it, so you want to be sure to create a listing that will really stand out among the rest.

This can be done by adding first-rate photographs, detailing as much as possible about the amenities and features of the property without misrepresenting it in any way, personalizing the description to capture the attention of your target audience and making certain that all punctuation and grammar is accurate.

Do Home Improvements That Matter

It’s understandable to not want to invest a whole lot into a house you plan to move out of, but there are certain improvements that can be well worth the time and money spent to add value to your selling price. Things like kitchen and bathroom remodels are generally good ways to go if you think your property could profit from an upgrade. These are two rooms that buyers are known to take a specific interest in when house hunting.

Be Ready to Make a First Impression at All Times

There can be many inconveniences you encounter while your home is on the market. It isn’t always easy to keep the property clean at all times or find somewhere to go when your agent wants to have an open house last minute, but being flexible and having the house ready to show at all times will greatly increase the chances of a buyer choosing it over another one that wasn’t available at their convenience.

These are important tips for home sellers to remember when looking to get top dollar in a timely manner. Without a reliable real estate agent, compelling MLS listing and everything else mentioned above, selling can turn out to be quite a challenge.

Common Real Estate Law Disputes Involving Neighbors

real-estate-lawWhen you decide to purchase a home, it’s likely that the neighborhood will be one of the top factors you take into consideration, with high hopes that you and your family will have a great experience there for many years to come. Unfortunately, you can’t know for sure what kind of neighbors you’re going to get in the deal, and living in such close proximity can make things very tense if you don’t see eye to eye on neighbor etiquette. Various issues may lead to minor neighbor disputes before they’re ultimately squashed between the two parties. However, there might come a time that you face a situation that can’t be resolved amicably, and thus, have to turn to real estate law to help settle the matter. Below are some of the most common topics that start unneighborly feuds every day.

Property Lines

Property line debates have been creating hostility between neighbors for decades. This generally occurs when one party mistakenly believes their property to include a certain portion of land that actually belongs to the other party. Questions may start to develop if a new fence is being built or trees begin to grow into the next yard. Boundaries can usually be easily established by looking at title documents or having a property survey performed.

Excessive Noise

Excessive noise continues to be a leading complaint among neighbors despite community ordinances and real estate laws that are designed and put into place to keep it from being a problem. Loud music, parties that go on late into the night and vehicle or burglar alarms that are neglected to be shut off are a few examples of unacceptable noises that can trigger serious annoyance in the neighborhood.

Keeping the Property in Poor Appearance

Living next door to someone who doesn’t care to keep up on the appearance of their property can be a major source of bad blood between neighbors. Who wants to come home every day to see overflowing trash cans, peeling paint, dog poop on the lawn, distasteful signs, etc., which affects the appeal and value of the entire neighborhood? There are real estate laws – such as private nuisance – that are meant to protect a homeowner who is experiencing a loss of enjoyment of their property because of a neighbor allowing their own property to deteriorate.

Bothersome Children and/or Pets

Regardless of how cute and cuddly they can be, children and pets are simply seen as a bother to some people and they don’t want to be anywhere near them. When this is the case, there isn’t much that can be done to fix it, but arguments are more frequently the result of things like children entering a neighbor’s yard without permission, dogs barking incessantly, children or animals damaging a property, etc. Parents and pet owners are responsible for watching after their children and pets and must teach them proper behavior.

The last thing you want is unnecessary drama with a neighbor to ruin your otherwise perfect living environment, but sometimes, there’s just no avoiding it. Become familiar with the real estate laws in your state so that if any of these controversies arise you can make an informed decision on how best to proceed.

10 Reasons Why Homeownership Never Goes Out of Style

Outgoing HUD Secretary Shaun Donovan created a fun BuzzFeed list “10 Reasons Why Homeownership Never Goes Out of Style”

Obama’s Housing Nominee Open to Ending Fannie and Freddie

President Obama’s nominee for Housing Secretary, San Antonio Mayor Julian Castro, told the Senate Banking Committee he is open to closing mortgage giants Fannie Mae and Freddie Mac. “I absolutely believe that there are better alternatives than what we have in place with this duopoly and with the conservatorship,” Castro said.

Senator’s have expressed little opposition to Castro’s nomination for Secretary of Housing and Urban Development (HUD), a job that would provide Castro a major role in the push for reforms to the current housing system.

Housing finance reform is still on the minds of many after the 2008 economic crisis. The government took control of Fannie and Freddie in September 2008 and provided them a $187.4 billion taxpayer bailout. Fannie and Freddie have since paid the bailout money back and have again become profitable.

President Obama nominated Castro for HUD Secretary after current Secretary Shaun Donovan was nominated to lead the Office of Management and Budget.

Full story from The Hill available here.

FEMA Announces New Flood Insurance Premiums and Rate Tables

floodMore good news on the Flood Insurance front… FEMA recently announced the Flood Premiums and Rate Tables for 2015. Each October, FEMA issues the following year’s rate tables. Releasing the rate tables at this time provides insurance companies sufficient lad time to update their rate quote software. These rates will take effect this October 2014 and will be used to calculate refunds to be issued later this fall.

According to FEMA’s memo: “In every case, the attached rates are the same or lower than the October 1, 2013, premium rates”. In other words, no one will see a rate increase next year, and some could see a further rate reduction below this year’s level. This is on top of the rate reductions FEMA implemented last month when it rolled back all rates so no older (pre-FIRM) property owner could pay more than 2013 subsidized rate for the rest of the fiscal year.

How to Explain to Your Client That They Can Benefit From Both a Real Estate Agent and an Attorney

real-estate-attorneyThe homebuying process can be pretty complex and tedious at times, but it’s nothing that an experienced real estate agent isn’t qualified to handle. However, there may be some instances when a buyer will choose to seek legal counsel about a particular type of realty transaction or be required by the state to hire the assistance of an attorney. When this is the case, buyers often question whether they need both a real estate agent and an attorney.

As an agent, you should be able to explain to a client why your services will still be beneficial even if they are working with an attorney as well. It’s important for a buyer to recognize that each professional has different roles to play and things to offer the homebuying process, resulting in a more efficient transaction.

Role of a Real Estate Agent

Buyers should understand that it’s their real estate agent that will be there for them throughout each stage of the process, from beginning to end. Agents can connect prospective buyers with useful contacts like mortgage lenders and inspectors, have access to numerous listings through the MLS database, can provide extensive knowledge of the local area and neighborhoods, will manage the mounds of required paperwork, arrange property showings and skillfully negotiate a fair price with the seller. Make it clear to your client that you will likely have much more time to give them when it comes to daily tasks and help with house hunting than an attorney can be expected to have.

Role of an Attorney

In the homebuying process, it’s not uncommon for an attorney’s services to be utilized when it comes time to close the deal. Even though real estate agents are authorized to draw up the purchase contract in most states, some make it mandatory for an attorney to become involved at this point in the event that any legal questions arise that an agent isn’t qualified to answer. This can refer to topics such as zoning, contract interpretation, subleasing, a sudden dispute over the negotiated selling price, etc. Any of these issues can cause a delay in closing, but with an attorney’s counsel, there’s a chance for problems to get resolved more quickly.

Other Reasons For Employing an Attorney

There are several other real estate situations that may call for legal services as well. Foreclosure and short sale transactions often present a very good deal for a buyer but have much more red tape to cut through than a straightforward transaction has. If any title discrepancies pop up, an attorney will be able to handle the complications. When buying a condo, there can be extra paperwork that a buyer feels more comfortable having reviewed by a legal professional, and when looking for investment properties, there can be various laws that a buyer needs to be filled in on.

To put it simply, real estate agents help their clients buy real estate while attorneys give legal advice. Pointing out the distinct duties that an agent has throughout the homebuying process as opposed to an attorney should help clear up any confusion a buyer has about working with both to acquire the home of their dreams.

Implementation of Flood Insurance Rate Relief Beginning

On April 15, 2014 FEMA reported implementing the first provisions of the Flood Insurance Affordability Act, which will provide immediate rate relief to homebuyers. In this bulletin, FEMA directs insurance companies to stop charging full-risk premium rates when older properties are sold after May 1st. Instead, buyers will be allowed to assume the seller’s current rate until FEMA issues new rate tables and refunds under this new law. NAR will continue pressing FEMA to implement the rest of the rate relief provisions according to statutory deadlines.

This new legislation providing flood insurance rate relief to homebuyers was signed into law by President Obama in March. It is reforming provisions of the “Biggert Waters” bill passed in July of 2013 that created unintended unpredictable rate increases for some flood insurance consumers that were not tied to a home’s actual risk of flooding. More detailed information on the new law as well as Biggert-Waters is available here: