New Law: Notice of Default by Landlords Required Disclosure to Tenants!
New Landlord Disclosure Requirements
Imagine this scenario: you are looking to rent a residential dwelling of between 1 to 4 units. You complete the rental application, provide the landlord with a security deposit and begin your tenancy. Within a month or two of moving in, you receive notice to vacate from someone claiming to be the new owner. Upon investigation, you discover that the landlord with whom you entered the lease agreement failed to inform you that as the rental application was being completed, he had already received a Notice of Default (“NOD”) and was facing a foreclosure sale. Now the successful bidder at the foreclosure sale wants to move in and you are forced to leave. Ouch.
In response to this predicament, the California Legislature recently enacted Civil Code Section 2924.85 which provides that landlords must provide prospective tenants with a specific notice if that landlord has received an NOD. Beginning January 1, 2013 and continuing for the next five years, every landlord who offers to rent a single-family dwelling, or a multifamily dwelling not exceeding four units, and who receives an NOD on a mortgage or trust deed secured by that property, must disclose in writing the existence of the NOD to any prospective tenant.
A landlord who fails to so inform the prospective tenant may be forced to pay the greater of one month’s rent or twice the actual damages to the tenant. Further, the tenant shall be able to recover all prepaid rent and will have the election to void the lease.
Tenants typically face several risks associated with leasing a property where the foreclosure process has begun: (1) Tenants often experience decreased services from landlords facing financial difficulties such as non-payment of utilities and/or not making repairs; (2) If there is a foreclosure, tenants face a great amount of uncertainty, and they may be unaware of the protections guaranteed them under state and federal law; (3) Even with protections, the lease may be invalidated, for example, by the new owner wanting to move in; and (4) It can be very difficult for a tenant to recover a security deposit after a foreclosure.
As with any new legislation, there are some exceptions in the new law. For example, the notice requirement does not apply to existing tenants and does not require disclosure by landlords of multi-unit apartment complexes which feature 5 or more units.
Another change affecting landlords and tenants is found in Civil Code Section 2924.8. Existing law provides that a tenant of a property posted with a Notice of Sale (NOS) is to be given a notice that the new owner after the foreclosure sale may enter into a new lease or rental agreement or must give a tenant a minimum 60-day notice to terminate. Beginning on March 1, 2013, the new owner will now be required to give a tenant in a foreclosed property a minimum 90-day notice after the sale to terminate. This change in the notice requirement is set to remain in effect until December 31, 2019.
This code section would also require the new owner must honor the lease unless the new owner will occupy the property as a primary residence or in other limited circumstances.
Thank you to California Real Estate Legal Alliance “CRELA” for providing this legal update containing new landlord disclosure requirements.
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How Much Should I Pay My Realtor?
Real Estate Q&A
Q: What is typical realtor commission % (or range) that seller pays realter who lists & helps sell vacant land in Southwest MI?
August 28, 2012
- What is the typical range or fixed rate of commision for seller’s realtor when selling vacant land? How negotiable is this?
- Does the qty of land (eg 2 acres vs 100 acres) affect realtor’s commission?
- What’s the avg base salary range for a Realtor working for a well-known agency (aprart from/ IN ADDITION to the commissions they get )? Or is commission the only income for realtor working for a real estate agency?
- Is it unwise for Seller to allow his Realtor to also be the Buyer’s realtor (ie a “:double agent” so to sepeak? If so, why? If not, why not?
State: MI
Category: Seller
City: Newago
Zip: 49349
A: Dear MI Seller,
I am a California Licenses Realtor, so things may be different in your state. In my area, it is customary to charge 6% for a standard residential sale. With lots and land, the commission is usually significantly higher, due to the nature of selling lots and land. It takes longer and more marketing dollars to advertise/market land and see it through the entire sales process. As a result commissions on land sales are often anywhere from 10%-20%.
Commissions are ALWAYS negotiable; that’s the law. Whether or not you will be able to negotiate a rate you like, is open. Just remember when negotiating commission fees, you often get what you pay for. For instance, if a Realtor is quick to let you negotiate a lower commission than he/she usually charges, then how good will that Realtor be at negotiating in general? You want a Realtor who can negotiate a good sale price and terms for you.
A good negotiator will explain in detail why he/she is worth the commission charged. Your Realtor should provide you with a list of the work to be performed, schedule of marketing and advertising, and length of time expected to get the property sold.
The quantity of land does not usually affect the commission.
Usually Realtors work on commission only; they do not earn a base salary. Additionally, say your Realtor charges you a 10% commission. He/she will have to split that 10% with the buyer’s agent. So that leaves your Realtor with 5% of your sale price. Then, your Realtor has to share his/her 5% with his office/broker, which is usually anywhere from 25%-40%. At the end of the transaction, your Realtor may end up with as little as 60% of 5% of the sale price. And Realtors pay for their own advertising and marketing, errors & omissions insurance, business license, etc.; their office does not customarily pay for any of those expenses.
Best practice is to not allow your agent to represent both the buyer and seller. However, I would allow the same company to represent both sides, meaning Realtor Bob from ABC Realty is your agent and Realtor Jane from the same company represents the buyer… that scenario is still called “dual agency” because one COMPANY is representing both sides, even though two different Realtors are doing the work.
I personally NEVER represent both the buyer and seller. I focus solely on the needs of my seller and if a buyer comes my way wanting to buy your land, I help that buyer by referring him/her to a good Realtor; that way I’m not turning away a possible buyer and I’m remain focused on you.
Many agents prefer to “double-end” a deal for the obvious reason of an increased commission. If you decide to allow your agent to represent the buyer too, then consider negotiating a commission that is something like this: “15% commission to be split with buyer’s agent; 10% commission if Seller’s agent represents both sides”.
I hope you find this information helpful!
DeniseTheRealtor
CA DRE Lic No 01481788
Read more: Ask a REALTOR Answer | REALTOR.com® Blogs
How Much Should a Realtor Do For a Seller?
Q: Who is responsible for an independent real estate inspection?
August 22, 2012
Who is responsible to arrange for an independent home inspection? Is it the buyer, seller, or the buyer’s realtor? I am confuse, because my realtor has myself doing everything. Like filling out papers regarding me the seller now she is telling me to find an independent inspector and pay for it. Is she correct in having me do everything?
State: WI
Category: Buyer
City: milwaukee
Zip: 53216
A: Dear WI Seller,
I am a California Realtor not licensed in Wisconsin, so things may be different in your state.
Your agent has a responsibility to be loyal to you and guide you through the process of selling your home. Your agent is the EXPERT, not you. She should be guiding you and helping you.
But, some things must be done by you. There are Disclosure forms that you as the seller of the home must fill out in your own handwriting, signed and dated by you. The form asks questions like, “Are you aware of any flooding inside the basement?” You must personally check the box YES or NO and provide detailed comments in your own handwriting. In a court of law, a judge would ask you about each form by saying, “Is this YOUR writing? Is this your signature? Is the date in your handwriting?” So, yes, most forms must be filled out by you.
However, your agent should be at your side, explaining each form and answering questions about the forms when you need her guidance.
When it comes to inspections like home inspections, roof inspections, soil inspections, wood destroying pest inspections, etc., most of those reports are optional for you as a seller. Many Realtors, myself included, require or strongly recommend their sellers have at least a home inspection prior to listing the home for sale. It sets you up to know what issues the potential buyers might find and gives you the opportunity to repair any items you wish to repair prior to listing your home for sale.
Your Realtor should be able to suggest/recommend inspectors she has worked with in the past. She should also know quality handymen, painters, carpenters, landscapers, etc. she can recommend to you.
You can always ask your Realtor to find a home inspector, schedule the inspection date, receive the report on your behalf, and then present you with the information when it’s done. It is standard for me to provide this service to my clients. I don’t wait for my clients to ask for my help; I offer help up front. Then my clients clearly know I’m there for them to make the process as easy as possible. I am never offended if my clients prefer to handle things on their own. I do, however, direct them to keep me in the loop so I know inspection dates/times and ensure I receive a copy of any reports.
When it comes to paying for the reports, it is customary for the seller to pay for the reports directly to the inspector. Most inspection companies will give you an option to “pay now” or “pay at close of escrow” and it usually costs about $50 more to delay payment through close of escrow.
Be direct with your Realtor. Tell her you want full service. Let her know that you want her to do as much as she can to relieve you from any work legally allowable. If she’s not willing to provide the level of service you desire, consider firing her right away and interviewing other Realtors.
I suggest you use Realtors who insist on earning their full commission, which is usually at least 6% (which your agent shares with the buyer’s agent). Agents who are willing to reduce their commission are not strong enough negotiators to get you a full-price offer on your home and might provide less service because they are spreading themselves too thin.
I hope you find this information helpful.
DeniseTheRealtor
CA DRE Lic No 01481788
Read more: Ask a REALTOR Answer | REALTOR.com® Blogs
Does My Realtor Have to Show Me All Offers?
Q: Reconstructing Offer
A: Dear Short Sale Seller:
Foreign Nationals Loving USA Real Estate
International Sales Continue to Climb in U.S. Market, Realtors® Report
WASHINGTON (June 11, 2012) – Due to low prices and the relative weakness of the dollar, international buyers continue to identify the U.S. as a desirable place to own property and make a profitable investment.
According to the National Association of Realtors® 2012 Profile of International Home Buying Activity, total residential international sales in the U.S. for the past year ending March 2012 equaled $82.5 billion, up from $66.4 billion in 2011. Total international sales were evenly split between non-resident foreigners and recent immigrants. The survey asked Realtors® to report their international business activity within the U.S. for the 12 months ending March 2012.
“Today’s advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signaling how desirable and profitable owning property in this country can be,” said NAR President Moe Veissi, broker-owner of Veissi & Associates, Inc. in Miami, Fla. “Low housing prices, a good inventory condition and increased buying power with today’s exchange rates help attract international clients. Foreign buyers also have the advantage of working with a Realtor®. Realtors® who specialize in serving international clientele have a truly global perspective; they know what hurdles foreign buyers face when purchasing property in the U.S., and have the expertise and knowledge that comes from working with clients from different cultures and real estate practices.”
International buyers bought homes throughout the country, but four states accounted for 51 percent of the purchases – Florida, California, Texas and Arizona. Florida has been the fastest growing destination of choice, accounting for 26 percent of foreign purchases. California was second with 11 percent and Texas and Arizona accounted for seven percent. Proximity to the home country, the presence of relatives and friends, the convenience of air transportation, and climate and location are all important considerations to prospective foreign buyers. Locations on the East Coast generally attract European buyers, while Asian buyers tend to purchase on the West Coast, particularly California. Florida attracts a diverse set of international buyers including South Americans, Europeans and Canadians. Meanwhile, Texas remains popular among Mexican buyers. Within markets in an individual state, it is not unusual to find concentrations of people grouped by nationality.
“Foreign buyers recognize that owning a home in the U.S. has many benefits, both financial and social,” said Veissi. “Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the U.S. and attain stability, security, and a sense of community.”
International buyers came from all over the globe, but Canada, China (The People’s Republic of China including Hong Kong), Mexico, India, and the United Kingdom accounted for 55 percent of all international transactions, according to the survey. Canada and China remain the fastest-growing home countries. Canada accounted for 24 percent of international sales while China accounted for 11 percent, up from nine percent in 2011. Mexico was third with eight percent of sales and India and the U.K. both accounted for six percent.
Forty-five percent of international purchases were under $250,000. In addition, there appears to be a gradual increasing trend toward purchases in the $250,000 to $500,000 price range. In 2012 this range accounted for 30 percent of purchases, up from 28 percent in 2011. The average price paid by an international buyer was $400,000 compared to the overall U.S. average of $212,000. Several reasons account for why the average international home price is higher than the average overall price. The international client is typically wealthier than the domestic buyer and is looking for a property in a specialized niche, for example, a larger property suitable for multi-generational living, or a property that establishes the individual’s presence and standing in the community.
Many homes purchased by foreign buyers are used as a primary residence. Vacation and rental use are also major reasons for a purchase. More than half – 66 percent – of survey respondents reported international buyers purchased detached single-family homes. About half of international buyers, 52 percent, preferred to buy in a suburban area and about a quarter, 23 percent, bought in a central city/urban area.
Sixty-two percent of international purchases were all cash, which has increased since 2007. International buyers still experience many financing challenges when purchasing a home in the U.S. In fact, among transactions that failed, Realtors® reported that in 26 percent of the cases financing issues were the problem. The difficulties facing foreign buyers in trying to obtain a mortgage include lack of U.S.-based credit history and hurdles in meeting mortgage requirements. Other reasons for not purchasing properties were cost/taxes/insurance and immigration laws.
Twenty-seven percent of Realtors® reported having worked with international clients this year. Fifty-two percent of Realtors® reported that international transactions accounted for one to 10 percent of their total transactions, while 27 percent reported that they made up more than 10 percent of total transactions. Realtor® specialization on the buyer’s side of the market – such as foreign language capabilities, cultural affinity or orientation with the prospective purchaser and experience in explaining the U.S. real estate – appear to be important in working with foreign buyers.
NAR helps Realtors® expand their businesses globally. The Certified International Property Specialist designation prepares Realtors® to service the growing international market in their local community by focusing on culture, exchange rates, investment trends, and legal issues. The CIPS®Global Network is comprised of over 2,000 Realtors® worldwide.
In addition, Realtor.com® International delivers U.S. residential listings to buyers across the global, as well as listings from international data providers. As NAR’s official property website, Realtor.com® increases exposure of U.S. properties to global markets and helps Realtors® grow their global business. Last month over 950,000 international unique visitors searched for U.S. properties on the site (as reported by Omniture Site Catalyst for May 2012 as an aggregate of all countries other than the U.S.).
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
NEW REAL ESTATE LAW: More California Real Estate Deals in 2013?
NEW REAL ESTATE LAW:
If you or anyone you know has a short sale or foreclosure after January 2013, even people who refinanced their original mortgage will be free from “deficiency liability”! That’s great news.
Right now people with their ORIGINAL loan (never refinanced) are the only ones who do not have to pay back the bank if their house is sold for less than they owe on it. With the new law, even if the house was refinanced, the owner will not have to pay the bank the difference between what they owe and what the house sold for.
I have to wonder if this means we will see a surge in short sales and foreclosures again after the first of the year. If so, it may be a new opportunity for investors to buy California homes at a great price…
NEW ANTI-DEFICIENCY PROTECTION for Refinance Loans Made After January 1, 2013
Starting January 1, 2013, a new California law will protect homeowners who default on their refinance loans from personal liability for any deficiency following foreclosure. Existing anti-deficiency law protects a borrower from personal liability for the difference between the principal balance and what the lender receives at foreclosure if the loan is a purchase money loan secured by an owner-occupied property with one-to-four residential units. The new law, Senate Bill 1069, extends that anti-deficiency protection to include any loan used to refinance the purchase money loan, plus any loan fees, costs, and related expenses for the refinance. The anti-deficiency protection, however, does not extend to any “cash out” in a refinance, which is when the lender advances new principal not applied to any obligation owed under the purchase money loan. This new law does not affect the other anti-deficiency protections for non-judicial foreclosures (or trustee’s sales) and seller financing.
This new law only applies to refinance loans or other credit transactions used to refinance a purchase money loan, or subsequent refinances of a purchase money loan, that are executed on or after January 1, 2013. For purposes of this law, any payment of principal shall be deemed to be applied first to the principal balance of the purchase money loan, and then to the principal balance of any new advance and interest payments shall be applied to any interest due and owing.
C.A.R. supported Senate Bill 1069 in the legislative process as many homeowners do not realize that, by refinancing, they lose their anti-deficiency protection for a purchase money loan. Senate Bill 1069 is similar to Senate Bill 1178 sponsored by C.A.R. in 2010, but vetoed by Governor Schwarzenegger. The full text of the law is available at www.leginfo.ca.gov.
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®.
How to rent in the USA when I currently live and work in France?
Q: Renting when new permanent resident alien w/out credit history
What will we need to provide in order to rent a house or apartment in the NYC TriState area?
Many Thx
A: Dear New York Renters-to-be,
I am a California Realtor specializing in helping foreign nationals purchase in the United States. I work with several lenders who loan to foreign nationals wishing to BUY real estate in the United States. I can tell you for sure, that if foreign nationals can buy in the New York area, they can definitely RENT.
Because I am licensed in California only, I cannot personally represent you in New York. However, I can refer you to a Realtor in New York who has experience working with foreign nationals.
I strongly recommend you use a Realtor who has worked with foreign nationals before. Experience has taught me that most agents think they can do anything, but you really want someone who is familiar with the quirks associated with foreign clients.
Renting should be pretty straightforward. I recommend the following:
1. Get a “letter of recommendation” from your current landlord stating that you’ve lived in his/her home for X years, paid X dollars in rent, paid on time, and were ideal tenants. Present a copy with your rental application.
2. If you own your home in France, bring proof of ownership.
Landlords will be more confident knowing you are homeowners too. Present a copy with your rental application.
3. Present copies of your green cards with your rental applications.
4. Open a USA bank account ASAP. The sooner, the better. You can do this while you are still in France. Print a copy of your most recent bank statement showing how much money you have available to pay rent.
5. If you have retirement accounts and savings accounts, even in French banks, print copies and have them ready to share if needed. Showing that you are wealthy or well established individuals in France may give potential landlords more confidence that you will thrive in the USA too.
6. Offer to pre-pay several months rent, if that gives the landlord more comfort/confidence.
7. Offer to have an American friend/family member sign as a co-signer (meaning that person would be equally responsible).
I hope this is helpful!
DeniseTheRealtor
–
REALTOR® / Broker
Read more: Ask a REALTOR Answer | REALTOR.com® Blogs
Can I buy a house in the USA from France?
Q: Buying in the USA from France
So my question will be how can strangers buy a house in the USA ?
A: Dear French Buyer,
I specialize in working with foreign nationals buying in the United States. My father is from France (and coincidentally moved to Iowa when he first arrived here), so I especially enjoy helping French people.
It should be no problem for you to buy property in Iowa especially since you are paying cash and have a partner living in the USA. It sounds like your first step should be to find a new Realtor and make sure it’s someone EXPERIENCED working with foreign nationals. If you or your partner cannot find a Realtor who has experience with foreign national transactions, find me and I will get a Realtor for you.
I am licensed in the state of California only, so I cannot represent you. However, I can interview and find you the right Realtor. Unfortunately this website does not allow me to provide my contact information. I am happy to assist you further, but you will need to reach out to me. The best way will be to send me a message through this site and I will personally respond and guide you.
You will absolutely need to get some documents ready to make the purchase process smooth. Get a copy of your current bank statement and make sure it is fully legible, showing your name, the bank’s name, the date, and the amounts of money in each account.. Then make that bank statement into a PDF to give to your American partner to print out. When making each purchase offer, you will attach a copy of your and your partner’s bank accounts. Making a cash offer means nothing unless you have recent bank statements to prove that funds are available.
Is there any reason you cannot transfer funds from your account to your American partner’s account now? When you do this, you should have your name added to his/her account or create a new joint account together that shows both names. American sellers will feel more confident knowing the funds are already in a local bank.
There is no cost to you, for me to help you. As a buyer, you never pay for a Realtor to help you. It’s free for you; the seller of the house gives money to his/her agent that is split between the Realtors upon sale of the property.
I hope this information is helpful!
DeniseTheRealtor
–
REALTOR® / Broker
Read more: Ask a REALTOR Answer | REALTOR.com® Blogs
Quick Quest: Can a couple with 630 &660 Credit Scores Buy a House?
Q: Buying a home with 630-660 credit score
A: Dear First-Time Home Buyer,
Yes, with scores of 630 and 660, you can qualify for home loans. You can apply for a loan in just your name, but then you will have to qualify with just your income.
When you apply as a couple, you have the benefit of using both people’s income, but the lender will use the lowest credit score.
If you had a higher credit score, you may be eligible for more loan options and better interest rates. I can refer you to some lenders that I know will be able to help you with your current scores and help you improve your credit scores. I am a Realtor and focus exclusively on the property side, not loans. But I have relationships with high quality lenders to whom I’m happy to refer you.
You may also want to check for first time buyer programs in your state. I just did a search and found a government page about Texas First Time Homebuyer Program. Their site is: http://www.tdhca.state.tx.us/homeownership/fthb/.
I hope this information is helpful.
DeniseTheRealtor
–
REALTOR® / Broker
Read more: Ask a REALTOR Answer | REALTOR.com® Blogs
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