Category Archives: Legal

Legislature Considers Tax on Homeowners

California Homes and Jobs Act of 2013.
The state legislature has been considering a tax that would be imposed on homeowners who need to record certain documents with their counties This $75 per document tax will be imposed on a variety of documents, which will include, for example, documents related to refinancing properties, taking properties in and out of trusts, making lot line adjustments, obtaining constructions loans and upon the death of a spouse. The tax also applies to foreclosures (the owner would be responsible, not the lender) and filing mechanics liens. For instance, it’s not untypical in a refinance, for six documents to be subject to the new tax, resulting in a tax total of $552. If a spouse dies, up to five documents need to be recorded, creating a total tax of $440 including existing recording fees.

SB 391 is in the Assembly Appropriations Committee. The CALIFORNIA ASSOCIATION OF REALTORS® is opposing this bill.

The purpose of the tax is provide a revenue stream to a fund earmarked specifically for Affordable Housing. More about this bill here:

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB391

What do you think of this idea? Don’t bother telling me. Tell your elected representative:

Assemblyman Brian Dahle

(916) 319 2001

State Senator Ted Gaines

530.225.3142

Register to Vote

Recently moved? Don’t forget to re-register to vote. Those elected to federal, state and local office make decisions that affect you every day, from the taxes you pay to the quality of your schools. Many races are decided by just a handful of votes so it’s essential that all those eligible to vote do so. California’s primary election is June 3, 2014 and the deadline to register to vote is May 19. You can register to vote here: http://www.sos.ca.gov/elections/elections_vr.htm

Cluster style homes in Redding off Shasta View

Cluster style homes in Redding off Shasta View

Water conserving fixtures required, starting Jan. 1 2014

An important new law to observe this coming year include this new rule mandating that all homes be retrofitted with water conserving fixtures. This was the partly the subject of an editorial today at the RS “Editorial: Drought makes irksome mandate the sensible path.” And true enough, many sensible rules can be irksome. Predicted water scarcity will affect all of us, so this small step seems only prudent. We’ll have to see exactly how it plays out in terms of the transfer of real estate.

Otter in the Sacramento River by Skip Murphy 2013

Otter in the Sacramento River by Skip Murphy 2013

[Approved by Governor October 11, 2009. Filed with Secretary of State October 11, 2009.]

Legislative counsel’s digest SB 407, Padilla. Property transfers: plumbing fixtures replacement.
(1)  Existing law authorizes public entities that supply water, by the
adoption of an ordinance or resolution pursuant to specified procedures, to
adopt and enforce a water conservation program. Existing law requires
certain disclosures to be made upon the transfer of real estate
. Existing law
requires that all water closets or urinals sold or installed in the state use no
more than an average of 1.6 gallons or one gallon per flush, respectively.
This bill would establish requirements for residential and commercial
real property built and available for use on or before January 1, 1994, for
replacing plumbing fixtures that are not water conserving, as defined as
noncompliant plumbing fixtures. On and after January 1, 2014, the bill
would require, for all building alterations or improvements to single-family
residential real property, as defined, that water-conserving plumbing fixtures
replace other noncompliant plumbing fixtures as a condition for issuance
of a certificate of final completion and occupancy or final permit approval
by the local building department.
By creating a new duty to inspect for local
officials, this bill would impose a state-mandated local program. The bill
would require, on or before January 1, 2017, that all noncompliant plumbing
fixtures in any single-family residential real property shall be replaced by
the property owner with water-conserving plumbing fixtures.

You can read the entire SB 407 here.
Twilight fishing near Sundial

More about the legality of commercial drones for videos

Back in early November, I pointed out that commercial use of drone aircraft to shoot video is currently illegal. Here is a video of a drone video maker currently being sued by the FAA for commercial usage. He faces a rather steep $10,000 fine:

This could all s change of course. Big money is on it. Yesterday, 60 Minutes showed a prototype delivery service being tested by Amazon that used drone aircraft to fly parcels directly to your doorstep. Even Jeff Bezos admitted being aware that the commercial use of unmanned aircraft is currently illegal. Interviewer Charlie Rose effused most giddily at the reveal, along with much of the fawning online media today. This despite the sad prospect that implementation of such a scheme implies EVEN FEWER jobs for Americans. Thanks, Mr. Bezos. But if you really want to be as “disruptive” in a good way, how about figuring out how to increase human employment, rather than only the opposite?
If left to your logical conclusion, how will anyone buy more of your consumer items if nobody has a job, due to your relentless pursuit of robotic employees?
AmazonDrone
Above ironic thumbnail from Twitter, of course. pic.twitter.com/NFriBxLnom

State rules over Septic Systems change

We Realtors were very concerned about proposed added level of state government regulation with new rules over septic systems. Basically, it would have imposed very expensive testing at point of sale for all the septic systems around the Shasta County region. Recently, the state issued the current map that illustrates those problem areas, and we aren’t on it. That makes the septic rule changes irrelevant to us. Click on the map to go to the actual page.

Septic system map

Click to go to actual current map

Of course the map can change, and those rules may be enforced here. There are a few areas I can think of where the density of septic systems and proximity to freshwater streams and bodies of water may become an issue. And in that case, enforcement of these rules may become necessary anyway.

State bureaucracy sounds pretty negative until you find your well water has been contaminated by somebody else’s sewage.

Anxious homeowners should be wary of short sale “experts”

This comes from the California Department of Real Estate (DRE) via the Shasta Association of Realtors:

Consumer and Industry Warning, False and Misleading Designations and Claims of Special Expertise, Certificaton and/or Credentials, Wayne Ball, Chief Counsel, DRE.

“The DRE is issuing Cease and Desist on questionable and possibly misleading terms such as “expert” “Certified” and “Speciality” in marketing and advertising of assistance to anxious homeowners. A growing number of individuals and companies in the area of short sales, are advertising as “experts” and the like. Moreover, there are an increasing number of companies offering expensive course materials and leads that have no meaningful or substantive content, which are designed to allow those who pay for the same to claim they have “certifications” which are, in effect, worthless. DRE does not issue any special designations. Some questions asked What qualified you as an “expert” how did you get that “expertise” When you state that you are a “specialist”, what special qualification do you have and what does that mean?”

Just last weekend I saw an advertisement in our local newspaper from an agent claiming to be an “advocate” for homeowners in a distress sale. The newspaper wouldn’t print it if it wasn’t true, right?

Here are my thoughts:

1. There is a large conflict of interest possible for any agent helping a homeowner conduct a short sale. No short sale = No commission. Whose interests are foremost?
2. Sometimes a short sale makes sense, but not always. What’s really the advantage for the homeowner?
3. There are a (very) few agents in our market who are demonstrably able to get short sales done regularly and cleanly. Typically, the most successful don’t run ads claiming to be experts or having certification.

I’ve been told that every homeowner around here that gets late on house payments, and then has a Notice of Default recorded, will immediately be contacted by about 5 agents claiming that they can help them do a short sale, and promising many benefits. These are the agents you should investigate most thoroughly.

I do believe that short sales are better for our community than foreclosures. And certainly better for the short sale agents. But I still haven’t heard a compelling argument that they are always better for the homeowner. Informed consumers need to be aware of the facts, and greet claims of short sale benefits from agents with full awareness of the inherent conflict of interest. Contact the Shasta Association of Realtors if you have any questions.

PS. Lately we’ve heard that some banks are offering cash incentives to homeowners to do a short sale. I’d call that a clear benefit for the homeowner. All others please be wary.

Ambulance chasing real estate agents

That’s what they call them. Those agents that call on homeowners behind on mortgage payments, who have had a Notice of Default filed, calling to convince the occupant that they should do a Short Sale instead of having their home foreclosed. In truth, real estate agents cannot give legal advice, and if you are offered any, you should be immediately suspect. If you are in mortgage trouble and get a call from an agent, realize that the caller has a huge conflict of interest. They are paid nothing if they don’t sell a house. They have nothing to lose by calling. Whatever ethical challenge posed, the overriding concern of the agent too often becomes the possible sale.

I wish it weren’t so. I wish all my colleagues were driven by service to clients and ethical behavior above all, but in fact that just isn’t the way it works in real life. Money changes everything. Remember that PLEASE if you get that call from an agent.

One of the things I keep hearing sellers being told is that a Short Sale can “save” your credit. I cannot give legal advice either, but I do have a guide from the California Association of REALTORS about the relative credit effects of either Foreclosure or the alternatives. I am not allowed to post it here (I asked politely too). But I am allowed to reprint it and give it away to clients. There are 3 relevant Legal Q&As, as excerpted below:

SHORT SALES AND FORECLOSURES

Q. My client is a distressed homeowner facing foreclosure. Will a short sale be better for his credit score as compared to foreclosure?

A. No. According to www.myfico.com, both a short sale and foreclosure are considered very negative events for someone’s credit rating because they are not “paid as agreed” accounts. Furthermore, www.myfico.com states that, as far as a FICO score is concerned, “there is no difference between foreclosures and short sales.” A distressed homeowner may have other reasons to prefer a short sale or foreclosure, but the two options have the same impact on someone’s FICO® score.

C.A.R. Legal Articles:

• Credit After Foreclosure, Bankruptcy, or Short Sale

• Short Sales

• Taxation of Foreclosures and Short Sales

If you’d like any or all of these 3 articles in print, I can get that for you. But I won’t be calling on you, or offering any legal advice. Be wary of those that do.

Shasta County’s Real Estate Fraud Investigator

Bob Angulow from the Shasta County DA OfficeThe membership of the Shasta Association of Realtors were pleased to have guest speaker Bob Angulo on March 2, 2011. Bob is the real estate fraud investigator for the DA. He was here to discuss the various investigations underway by his office, and to take questions from the Realtors in attendance. He was also interested in hearing what our membership had to ask about any potential fraud that they had run across.
We learned of a heartbreaking story of elder fraud being investigated, along with the usual Craigslist scams and rental issues. Did you know that it is a felony to strip a foreclosure property? Its not uncommon to see foreclosed homes where appliances, cabinets, and more have been removed. Since those items are fixtures, if their value exceeds $950, the result is a felony crime.

Bob was followed by an impromptu appearance by the DA himself, Steve Carlton. DA Carlton spoke briefly about the change in focus that he will be bringing to his office, and he expressed his pleasure with finding such a great and dedicated staff already in place at the DA’s office. It was a very informative and thoughtful meeting.
If you have information about an instance of real estate fraud, Bob Angulo would like to hear from you. (530) 245 6350.
Photos by Skip Murphy

Martin Luther King and Fair Housing

Change is hard. No big changes to the way people think in this life come without struggle.
In the 1960’s, when I was but a lad, those around me told me that the Reverend King was a “troublemaker,” and that only rioting and unrest followed him around. Everywhere he spoke, nothing but trouble. That was my earliest impression of Martin Luther King, from the comfortable confines of my suburban childhood.
Today we sometimes take Fair Housing laws for granted. This is from Wikipedia.

In the United States, the fair housing (also open housing) policies date largely from the 1960s. Originally, the terms fair housing and open housing came from a political movement of the time to outlaw discrimination in the rental or purchase of homes and a broad range of other housing-related transactions, such as advertising, mortgage lending, homeowner’s insurance and zoning. Later, the same language was used in laws. In April 1968, at the urging of President Lyndon Baines Johnson, Congress passed the federal Fair Housing Act, Title VIII of the Civil Rights Act of 1968, only one week after the assassination of Martin Luther King, Jr.

And, apparently the Reverend King was indeed a troublemaker. Below from Wikipedia, he surely made trouble for this group:

“In 1963, California Legislature passed the Rumford Fair Housing Act which outlawed restrictive covenants and the refusal to rent sell on the basis of race, ethnicity, gender, marital status, or physical disability.

In reaction to the law, a well-funded coalition of realtors and landlords was determined to protect white neighborhoods and property values. They immediately began to campaign for a referendum that would amend the state Constitution to protect property owners’ ability to deny minorities equal access to housing. Known as Proposition 14, it was passed by 65 percent of the voters.
In 1966, the California State Supreme Court, in Mulkey v. Reitman, ruled that Proposition 14 violated the State Constitution’s provisions for equal protection and due process.
In 1967, in Reitman v. Mulkey, the U.S. Supreme Court confirmed the decision of the California Supreme Court and ruled that Proposition 14 had violated the 14th Amendment of the United States Constitution.”

Sad to see Realtors written into the encyclopedia on the wrong side of history. This year, I was elected as a Director at the local Shasta Association of Realtors. I pledge to work to make sure that Realtors remain on the right side of the good fights.

At the Association’s new agent orientation training in 2009, I pointed at all the new people, and told them that the Fair Housing Laws were enacted to protect ordinary people from Realtors, among others. “That’s you.” They looked surprised to hear that, but it’s the truth. Fair Housing principles are not just the right thing to do, they are the law. These precepts had to be made into law, because change is hard.

And I need to point out that The Shasta Association of Realtors currently donates money to the Legal Services of Northern California organization to promote Fair Housing with seminars and workshops for tenants and landlords. Cathy Farrel of LSNC reports that complaints about Fair Housing have been much reduced since the programs have been initiated. Thank you, Shasta Association of Realtors.

We are working today, but reflective on the life of the Reverend Martin Luther King and the ongoing struggle he has come to represent. May we all be such troublemakers.