What is the Real Estate Settlement Procedures Act (RESPA)?

Mon, 16 Mar 2009 01:35:45 GMT

RESPA is a federal regulation that governs certain aspects of the closing and settlement process in a real estate transaction. Designed to protect consumers who are buying houses, the U.S. Department of Housing & Urban Development (HUD) enforces RESPA. Essentially, RESPA requires that buyers be given certain disclosures or information at various points during the purchase process, and outlaws kickbacks that might increase the costs of closing and settlement.

RESPA applies to most mortgage loans taken out for primary homes. When you apply for a mortgage loan, the lender must give you certain information about various real estate settlement services, a Good Faith Estimate as to the amount of settlement charges you will face if your loan is approved, and a Mortgage Servicing Disclosure Statement, which addresses whether the lender intends to service the loan or transfer it to another lender, as well as procedures for resolving complaints that you might have. Lenders have to give you this information at the time of your loan application, or mail it to you within three business days of your application. The only exception is if the lender turns down your loan application within three days; in this case, the lender is not required to comply with this aspect of RESPA.

A lender must also make certain disclosures before settlement and/or closing on the loan occurs. RESPA requires that you receive a completed HUD-1 Settlement Statement at least one day before closing. This document sets forth all of the charges that apply to both the buyer and seller at the time of closing. RESPA also mandates that you receive an Affiliated Business Arrangement Disclosure prior to settlement, if the settlement provider has referred you to a provider with whom it has some sort of business arrangement.

Furthermore, in addition to the HUD-1 Settlement Statement, RESPA also provides that you receive an Initial Escrow Statement at settlement or within 45 days thereafter, which sets forth the estimated property taxes and insurance premiums that you will pay during the first year of the loan. This Statement also must contain the total amount of escrow payments you will make, as well as any required minimum amount that the lender requires to remain in your escrow account at all times.

Following settlement of your loan, RESPA imposes an obligation on lenders to send you an Annual Escrow Statement that gives an itemized account of all payments and deposits on your escrow account. At that time, you will be refunded any overpayments, or be required to make up any shortages in your escrow account. You also are entitled to a Servicing Transfer Statement at any time that your lender sells or otherwise transfers the servicing of your loan to another company.

Finally, RESPA prohibits any kickbacks, fee-splitting, or other unearned fees that might unfairly increase your settlement costs. Violations of these provisions of RESPA can result in both civil and criminal penalties. Additionally, RESPA places limits on escrow accounts and outlaws lenders from requiring that you use a particular title company.

1031 Exchanges

Sat, 01 Aug 2009 16:54:19 GMT

Property is often bought and sold for business purposes. It makes sense, from a public policy perspective, to encourage the buying and selling of property so that business owners purchase the property that is best suited for their use. Property may include real estate, personal property such as equipment, tools and motor vehicles, or livestock, for example. The government, recognizing that the possible capital gain taxes on the sale of property might prevent some businesses from buying and selling property, has enacted what is known as the 1031 Exchange Rule.

What is the 1031 Exchange Rule?

The 1031 exchange rule is part of the IRS Code. It allows people to replace business or investment property without having to pay capital gains taxes at the time of the sale. It is meant to encourage the productive use of property in trade and business. Property that is bought with the intent of creating a quick resale and private residences will not qualify for a 1031 exchange. The potential tax benefits of a 1031 exchange are significant. Therefore, the IRS has established some strict guidelines about the types of properties and the types of transactions that are eligible for this tax break.

Does My Transaction Qualify as a 1031 Exchange?

If you are trying to determine whether your real estate transaction would qualify as a 1031 exchange then consider:

Whether the properties involved in the exchange are held for valid trade, business or investment purposes;
Whether the properties qualify as eligible for a 1031 exchange. Section 1031 b of the IRS Code explains what is and is not eligible for a 1031 exchange. For example, real estate is eligible but stocks and bonds are not eligible;
Whether the properties are of like kind. For example, both properties are real estate in the United States and not other types of personal property or international real estate.
Whether you identified the replacement property within 45 days of closing on your current property and closed on the replacement property within 180 days of closing on your other property.
Whether the proceeds from the sale of your current property must go to a qualified intermediary until you purchase your replacement property. The qualified intermediary enters a written contract with the person who is buying and selling property. The qualified intermediary holds the funds from the sale of a property and acquires the next property and then transfers the property to the taxpayer.
All of the funds must be reinvested in the replacement property. Any cash that is left over after the purchase of the replacement property is called “boot” and will be taxed.

As is the case with many tax breaks, the requirements for a 1031 exchange are strict and the penalties for not complying with all of the requirements can be significant. It is, therefore, important to work with an attorney before entering a 1031 exchange transaction. Your attorney can make sure that all of the requirements have been satisfied and that the exchange is made pursuant to section 1031 for the benefit of your business.

Buying a Home

Thu, 13 Aug 2009 02:54:20 GMT

Buying a home is a big step in everyone’s life, and for many people, obtaining a mortgage loan in order to buy a home is the most significant debt that they will ever take on. The purchase of a home is not a simple process, but involves a series of complex steps that trigger the application of a variety of different state and federal laws and regulations. Additionally, the sale of a home affects the legal obligations and rights of both buyer and seller in a number of ways. Therefore, it is essential that all prospective homeowners be aware of their legal rights, responsibilities, and obligations prior to becoming homeowners.

Qualifying for a Mortgage Loan

As the typical home buyer does not have the cash to purchase their home outright, a buyer must qualify for a mortgage loan. A buyer must apply for a mortgage loan through a bank or other lending institution. The Equal Credit Opportunity Act safeguards your right to obtain credit, and protects you against being denied credit as a result of your sex, age, race, religion, and/or national origin. However, depending on the amount of the loan requested, the buyer’s debt-to-income ratio, income, assets, and credit scores, the lender may approve or deny your mortgage loan application. These factors also affect the terms of the mortgage loan offered, in terms of interest rates, the length of the loan term, and whether the lender will require the purchase of private mortgage insurance at an additional cost to the buyers.

As an applicant for a mortgage loan, you also have certain legal rights under a federal law known as the Real Estate Settlement Procedures Act (“RESPA”). When you apply for a mortgage loan, the lender must give you certain information, including a Good Faith Estimate as to the amount of settlement charges you will face if your loan is approved, and a Mortgage Servicing Disclosure Statement, which addresses the transfer of your loan to another financial institution, as well as the procedures for making a complaint. You must receive this information at the time of your loan application, or receive it in the mail within three business days of your application. If the lender denies your loan application within three days, however, the lender need not comply with these aspects of RESPA.

Home Inspections

Once you have decided to make a written offer on a home, it is wise to hire a certified home inspector in order to examine the home for any major defects. For instance, a home inspector will check major systems in the home, including electrical, heating and cooling, and plumbing, as well as structural issues in the roof, floors, walls, etc. If you choose not to hire an inspector, you will essentially be purchasing the home “as-is”, and any problems or defects with the home that you discover after the real estate transaction is final will become your responsibility. Therefore, the advantage of hiring a home inspector is that you will have the opportunity to address any defects prior to purchasing the home, whether it be through a decrease in purchase price to account for necessary repairs, or by choosing not to purchase the home altogether. In many cases, a purchase contract is written with a specific clause that allows you to withdraw from the contract if a major defect is discovered, and you are unable to resolve the issue with the seller to your satisfaction.

Obligations of the Seller to Disclose Defects

In any real estate transaction, the seller is usually required to fill out certain disclosure forms in order to make the buyer aware of major defects. The details of these requirements vary widely from state to state. Even in states that do not require the seller to complete disclosure forms, the seller is still required to disclose certain major or material defects in the home. Furthermore, even if your state does not require a seller to disclose such a defect to the buyer, failing to do so may result in future litigation with the buyer who later discovers the defect; such future legal problems potentially can be avoided by simply disclosing and dealing with the defect in the first place.

Title Insurance and Taking Title to Your Home

It is standard procedure to obtain title insurance when purchasing a home. A title insurance company will examine the historical title and ownership of the property, and attempt to identify any problems that could adversely affect you taking title of the property. Plus, title insurance protects you in the event that another claim of ownership is made to the property, and/or if you have to defend your title to the property in court.

Another decision to make is how title to the property will be held by the buyer(s). In the case of a single person buying a home, the deed transferring title is relatively straightforward, in that the title is placed only in that person’s name. When there are two or more buyers, however, there are different options for taking title to real estate. For instance, buyers can take title to a property as joint tenants with right of survivorship. In this case, if one owner dies, then the other owner(s) automatically receive his or her share of the property. In contrast, buyers can take title as tenants in common, which has no right of survivorship. Therefore, if one owner dies, his ownership share passes to his heirs according to his will, or, if there is no will, to his surviving family based on the laws of intestacy. Furthermore, for married couples, the typical method of taking title is as tenants by the entireties, whereby upon the death of one spouse, the other spouse automatically becomes the sole owner of the property.

Escrow Accounts and the Closing Process

In order to finalize the purchase of a home, the buyers and sellers must participate in a closing, at which all legal and required documents are signed, and title of the property is formally transferred from the sellers to the buyers. At this point in the transaction, the Real Estate Settlement Procedures Act (“RESPA”) sets forth certain requirements. RESPA requires that your lending institution provide you with a completed HUD-1 Settlement Statement at least one day before closing. This document sets forth all of the charges that both you and the sellers will be responsible for at the time of closing. RESPA also requires that your lender provide you with an Affiliated Business Arrangement Disclosure prior to settlement, if there is any business relationship between the providers involved during your closing process.

Furthermore, in addition to the HUD-1 Settlement Statement, RESPA also requires that a lender furnish you with an Initial Escrow Statement at settlement or within 45 days after settlement. An Initial Escrow Statement sets forth the estimated property taxes and insurance premiums that you will pay during the first year of your mortgage loan. This document also will detail the total amount of escrow payments you will make under your mortgage loan, as well as any required minimum amount that the lender requires to remain in your escrow account at all times.

Responsibilities of Homeownership

Following settlement of your mortgage loan, the Real Estate Settlement Procedures Act (“RESPA”) also requires lenders to send you an Annual Escrow Statement, which contains an itemized listing of all payments and deposits made on your escrow account over the last year. If your escrow account is overpaid or underpaid due to changes in your insurance premiums and/or property taxes, your lender must refund overpayments or bill you for underpayments, as well as adjust your monthly mortgage payment as necessary. So long as you maintain your original mortgage loan, you also are entitled to a Servicing Transfer Statement whenever your lender sells or transfers the servicing of your loan to another company or lender.

If you took out a mortgage loan in order to purchase your home, your financing agreement with your lender will require you to maintain homeowner’s insurance on your home at all times. In many cases, your insurance payment will be a part of your mortgage payment, as it is paid by your lender through your escrow account. Letting your homeowner’s insurance policy lapse may constitute a default on your financing agreement, which may cause you to ultimately lose your home.

Dealing With Your Neighbors

Sat, 01 Aug 2009 16:56:37 GMT

Living in close proximity to your neighbors can be a wonderful experience. It can mean summers of shared barbeques, help and advice with your yard work and people to count on in the case of an emergency. Yet, living in close proximity to your neighbors can also lead to disputes. Some common situations that lead to disputes among neighbors include, maintaining shared fences or boundaries, construction on a home that restricts a neighbor’s view, property encroachment and loud or obnoxious behavior. Let’s consider each of these situations and your legal options if you find yourself involved in any of these scenarios.

Fence or Common Boundary Disputes

If a fence or other boundary wall is to be built on the property of more than one landowner then it is a best to practice to put an agreement in writing. The agreement should cover things such as maintenance and repairs so that the parties are clear as to their responsibilities. If a dispute arises then it the agreement may become useful and legally enforceable. If no such agreement was made then a court may consider the parties’ past behavior with regard to maintenance and repairs and what is fair given the location of the fence.

Easement Views

A view easement, or a scenic easement, is designed to protect a neighbor’s view. The best way to protect the view from your property is to purchase a view easement from your neighbor. The easement becomes a right that is associated with your property and adds value to your property. If the neighbor tries to build or otherwise disrupt your view then you have a legal claim against the neighbor. In the absence of an easement view your rights usually depend on local ordinances. You do not have the right to prevent your neighbor from building, even if it will diminish your view and property value, unless the local ordinances limit the property owner’s right to build or the construction violates your easement.

Property Encroachment or Trespassing

Your neighbors do not have any special entitlements to encroach upon or trespass on your property. Unless your neighbors hold legal easements for the use of your land then they do not have any greater right than anyone else to be on your property uninvited.

Nuisances

Property owners have the right to the quiet enjoyment of their property. That means that they should be able to use their property without interference from others. When deciding if a neighbor’s actions violate a property owner’s right to quiet enjoyment courts typically consider the duration of the neighbor’s actions, the reason for the actions and the impact or burden on the property owner. It is important to keep a log of the behavior that you find to be a nuisance and your attempts to resolve the behavior before addressing the matter in court.

Remember that, that unless one of you chooses to move, you and your neighbor will be living in close proximity to one another after your dispute has been resolved. Therefore, it is usually in your best interest to work things out as amicably as possible while protecting your property and your rights.

How to Obtain Homeowners Insurance

Sat, 01 Aug 2009 16:53:29 GMT

A home is a big investment both for you as the buyer and for the bank that has your mortgage. Most mortgage providers will not loan you money unless you insure your purchase. Even if you do not have a mortgage on the property, homeowner’s insurance is a good idea.

Every homeowner’s insurance policy is different. Typically, a homeowner’s policy insures the residence, a certain amount of personal property and specific itemized pieces of property such as particular pieces of jewelry or collectibles. Many insurance companies offer homeowner’s insurance and, as with every type of insurance, it is up to the policy holder to determine which insurance company offers the best coverage for the best price.

You can obtain homeowner’s insurance by contacting an insurance company directly or working with an independent insurance agent. Many companies give discounts if you carry more than one policy with them (such as car insurance and homeowner’s insurance.) Discounts might also be available for certain safety measures that are taken on the property such as alarm systems and fire protection systems.

An insurance company can deny you coverage if they determine that the risk of insuring you is too high. Some common reasons for denial of homeowner’s insurance coverage include:

Location of the House: if a house is located in an area that is prone to natural disasters such as hurricanes, earthquakes or tornados then insurance may be difficult to obtain. Similarly, if the house is located in a high crime area then insurance may be difficult to obtain.
Condition of the House: if the home inspection reveals any significant problems with plumbing, electricity or structural or safety concerns then insurance can be hard to purchase.
Title and Ownership Issues: if there is any question as to who owns the property or, if you are purchasing a condominium and there is any ambiguity about the homeowner’s responsibilities and the condo association’s responsibilities then insurance can be difficult to obtain.

It is important to remember that while an insurance company can deny coverage based on an objective determination that insuring the property is too risky, it cannot deny coverage for discriminatory reasons. For example, an insurance company can refuse to provide coverage based on the crime rate of a certain neighborhood but it cannot deny coverage because a black family is seeking coverage for a house in the neighborhood when the company provides coverage for the white family next door.

If you have been denied insurance coverage then you have several options available to you. You can:

Appeal the Decision of the Insurance Company: by clearly and objectively making an argument to the insurance company regarding why your home should be insured and why it is not a significant financial risk for the company to insure you.
Find Another Insurance Company: it does not matter which company you purchase your insurance through so long as the company is reputable and ethical.
Seek the Help of an Insurance Agent or your Mortgage Holder: both have an incentive to work on your behalf and have experience obtaining homeowner’s insurance for customers. They may be able to use that experience and knowledge of the industry to help you insure your home.

Homeowner’s insurance is an important part of being a homeowner. It can be hard to recover financially if your home is damaged. Therefore, it is important to find the coverage that is right for you before tragedy strikes.

How to Recover From a Natural Disaster

Sat, 01 Aug 2009 18:41:11 GMT

The winds have died down, the rain or snow has ended and the earth has stopped shaking. You look around at the mess around you and you think: now what? How do I pick up the pieces of my life and move on after this horrific natural disaster? There is no doubt that getting back to normal will take some hard work and perseverance. However, this arduous task can be made easier if you follow each of the steps set forth below.

After a disaster you should:

Take Safety Precautions: including not using your water which may be contaminated and being mindful that your home, trees and the other structures on your property may be unstable.
Seek Medical Attention: if you have been hurt then it is important to seek prompt medical attention. Make sure that emergency services are able to get to your house. If they are unable to access your home then ask the police to provide you with a safe alternate route, remembering that power lines may be down and bridges may be destroyed so that your usual route to the hospital may be inaccessible.
Safeguard Your Property: Gather up your most prized possessions and find a safe place to keep them. If your home is damaged and easy to access through broken windows, walls or doors then thieves may try to take advantage of the situation. Secure your property the best that you can with temporary materials.
Contact Your Insurance Company: Your homeowners or renters insurance may or may not cover the particular natural disaster which hit your area. Contact your insurance company to discuss your policy and file your claim.
Contact Your Creditors: It is important to contact your creditors to let them know what happened and to provide them with a temporary address if you are unable to receive mail at your usual residence.
Repair or Relocate: Finally, once your immediate needs have been met you are going to have to decide if you should repair your home or relocate to a new dwelling.

While this list may seem simple enough, there are many places where things can go wrong. Your insurance company may give you a difficult time about providing coverage you according to the terms of your contract. Looters may try to take advantage of your misfortune. The contractor that you hire to repair your home may breach his or her contract with you or your creditors may be unwilling to work out reasonable payment plans with you. If any of these situations arise, or any other dispute arises out of a natural disaster then it is important to seek the advice of counsel.

Your attorney can help you sort through all of the legal issues associated with the catastrophe and take some of the burden off of your shoulders. While we all hope to miss the tornado, blizzard, hurricane or earthquake that changes our life, some of us will not be so lucky and will need the guidance provided above about how to proceed when catastrophe strikes.

Installing a Fence Can be a Good Legal Strategy

Sat, 01 Aug 2009 16:56:07 GMT

You’ve heard that common saying – that good fences make good neighbors? Well, it turns out that the saying is true and for more reasons than the implicit privacy reasons at which it hints. Fences protect both the home owner and others from the consequences of getting hurt on the home owner’s property.

Home owners generally owe a duty of care to people whom they invite onto their property. For example, dinner guests and plumbers are owed a duty of care. Home owners may be legally responsible for injuries incurred by others if there was an unreasonable risk of harm that the homeowner knew about or should have known about prior to the injury. However, property owners typically do not have a duty of care to trespassers or to people who are unlawfully on their property. Yet, in many situations it is a good idea for home owners to take reasonable efforts to protect everyone, trespassers and invitees, from known harms on their property.

If your property contains any of the following then a fence is usually a good investment and a good legal strategy to prevent personal injuries and lawsuits:

A Pool: many local ordinances require homeowners who own a pool to fence in the pool because of the foreseeable harm to children. A pool is an enticing and deadly place for young children. Therefore, it is important to erect a fence in order deter them from entering the area.
Natural Water Such as a Lake or Pond: a fence is a good idea for the same safety and liability reasons as a pool fence.
A Dog: if you allow your dog to be outside unattended then it may be a good idea to fence in the part of your property where your dog roams. A true fence, rather than a pet’s invisible fence, will prevent people from coming onto your property and scaring your animal or enticing the animal to attack.
A Campfire Area, Playground Equipment, or Other Enticing Features such as a Rock Wall or Sledding Hill: as with a pool, kids, teenagers or even other adults may be tempted to come on your property and to check out its features. You can protect this from happening, protect people from getting hurt and protect yourself from liability by fencing in the area.

If you do install a fence it is important that the fence be sound and sturdy. You do not want the fence, which is intended to protect people, to become a liability in and of itself. In the same regard, it is important to keep the fence secured. A fence does little good if its gate is wide open and allows people easy access on to the property.

Some people resist putting a fence up and instead rely on other people to make the right decisions and stay off of property that they do not own and to which they were not invited. However, sometimes other people do not make the right judgments and the result of their actions could mean financial and emotional suffering for you. Therefore, it is up to you to protect yourself and your property with a fence if the situation warrants it.

Making an Offer to Purchase&With Contingencies

Sat, 01 Aug 2009 16:52:19 GMT

It is exciting to find a home that you want to purchase. You may walk through the home and admire the floor plan, the architecture, or the style of the home and you may begin to picture yourself living in the space. You may decide that this is the house that you want to purchase. If so, then you will need to make a formal offer to purchase to the current owners of the property.

In your excitement, it is important to remember to protect yourself in the home buying experience. While you want to present a strong and reasonable offer, you also want to provide some contingencies in your formal offer to purchase document that will allow you to back out of the sale without penalty under specific circumstances. Some of the most common offer to purchase contingencies include:

A Low Appraisal: there are a lot of emotions involved in buying a house but there are also important financial considerations. If the house appraisal comes in for significantly less than your purchase price then you might not wish to purchase the home.
A Bad Home Inspection: There are many things that can go wrong in a home inspection and almost every inspection report will recommend some kind of improvement that should be made on the property. That said, if the home inspection comes back with many problems or a single expensive problem, then you might wish to cancel your offer to purchase unless the seller agrees to remedy the problem.
Being Denied a Mortgage: If your mortgage is not approved then you will not have the funds available to purchase the property and you will likely want to back out of the sale.
Discovery of Title Problems: Your title search may reveal that the property is subject to numerous easements or has an encumbrance that you do not want. It could also reveal an uncertain chain of title. In either case you might wish to find another home to buy.
Being Unable to Sell Your Existing Home: Some buyers make their purchase of a home contingent on the sale of their existing home so that they have the funds to purchase the new home and so that they do not carry two mortgages at the same time. If your existing home does not sell by a certain date then you might wish to back out of the sale of a new home.

When you’ve found the home that you would like to purchase, it is important that you make your offer to purchase with the contingencies described above so that you are truly getting the home of your dreams. In order to take advantage of these contingencies they must be explicitly included in your offer to purchase that is accepted by the seller. You can find and complete a standard offer to purchase document that is appropriate for your situation or you can consult a real estate attorney for further guidance.

Protecting the Title to Your Property

Tue, 01 Sep 2009 00:58:37 GMT

Property is, typically, a big investment and new property owners want to protect the money that they invest in their property. One of the fundamental things that property owners want to protect is their ownership rights. Accordingly, it is important to have a title search conducted on the property and to purchase title insurance in case anything was missed during the title search.

Title Search

A title search, if done properly, will give you a chain of title for the property, show any restrictions on the property, such as easements, and identify any outstanding liens on the property. A title search is done by searching the local land records in the town, city or county where such records are kept for the property.

Anyone can go to the office where land records are kept and perform a title search. However, many people choose to employ a title search company or an attorney to do the title search for them. It is important that a title search be thorough and reveal all encumbrances, liens, and owners of the property so that a person buying the property knows:

that he is buying a piece of property that can be legally sold to him; and
if there are any restrictions or encumbrances that he will become subject to or liable for when he becomes the property owner.

For these reasons, prospective property buyers should have a full title search done. Limited title searches may be done if property owners are not changing such as during a refinance of the property.

Title Insurance

While a thorough title search will reveal potential problems and give a buyer the opportunity to rectify them, it is always possible that the person conducting the title search missed something. Since the government only provides a method for checking property ownership and encumbrances and does not verify such ownership or encumbrances, it is important to protect your investment with title insurance.

Title insurance protects property owners from incurring financial losses because of a problem with the property’s title. Title insurance companies require policy owners to have a title search done before obtaining insurance. Most banks require mortgage applicants to obtain title insurance prior to issuing a mortgage so that they can be assured that their interest in the property will be honored if a previous lien, owner or other encumbrance should come to light in the future. Title insurance policies may be issued as an owner’s policy if it is purchased by the homeowner or a lender’s policy if it held by the mortgage lender. Typically, the cost of title insurance is a one-time fee and the insurance remains in effect as long as the same owner maintains ownership of the property. A subsequent owner would need to purchase his or her own title insurance policy as they are nontransferable.

Most United States jurisdictions maintain public, yet complicated, systems of land records. Home buyers should conduct title searches, or hire someone to conduct a search, and purchase title insurance in order to make sure that their property purchase is protected.

Put a Lid on it!! Neighbors, Noise and How to Alleviate the Nuisance

Tue, 10 Jun 2008 14:15:47 GMT

Do you have noisy neighbors? Does it interfere with your sanctuary at home? Do you wonder if it will ever stop? If you are currently in a situation where your neighborly noise is getting out of control, here are some steps that you can take to help muzzle the problem:

1. Talk to your neighbor

Based upon individual comfort levels of noise, neighbors are oftentimes unaware that they are even creating a disturbance. Therefore, your first step is to talk to your neighbor(s) and try to resolve your differences in person. Sometimes simply bringing the situation to light solves the problem, quickly and easily.

2. Obtain a copy of your local City/County ordinance

If you cannot resolve your differences by speaking with your noisy neighbor, your next step is to get a copy of your local noise laws. City and County ordinances prohibit unreasonable, excessive noises; i.e. continuously barking dogs, blasting car and home stereos, televisions, etc. In fact, non-compliant neighbors can be subject to a warning or even a fine.

You can find your City/County ordinance at your local city hall or public library. Make a copy to give to your neighbor as a friendly, civil reminder to bring the volume down. In addition to this, keep a personal log of all annoying activities for future reference.

3. Warn your neighbor in writing

If steps 1 and 2 do not deliver results, you can warn your neighbor again—this time in writing. While you should never make deliberate threats, kindly inform your neighbor(s) that if the noisy situation does not improve, you are ready to notify the authorities. Enclose a copy of the previous noise ordinance with your letter and keep a copy of the letter for yourself, in the event you are forced to sue your neighbor in court.

4. Call the Police

If you have taken all of the steps above and your neighbor(s) still refuses to pipe down, call the police. Of course, you can call the police on a noisy neighbor the first time the noise gets too loud, no matter what the situation. But the police will be more sympathetic to you if they see that you have tried repeatedly to solve the problem in the past.

5. Sue for Nuisance

If nothing is still being done to rectify the noisy situation, you can sue your neighbor(s) in small claims court. This is bound to get your neighbor’s attention and warrant some kind of compliance, as within the lawsuit, you can ask for money to compensate for the duress and disturbance the situation has caused you from enjoying the comforts of your own home.

Before heading into court, you will need to show the following:

• The existence of excessive and disturbing noise
• A diminished enjoyment of your property due to the noise
• A repeated attempt to talk with your neighbor(s) to quash the noise; i.e. the first copy of the City/County ordinance, your warning letter, etc.
• Any police reports, recordings or testimony of neighbors and/or other witnesses.

The amount of money you can ask for in small claims court is up to $5,000, depending on your justified level of disturbance; i.e. loss of work, etc.

Further, are you a tenant of a rental property? Apart from City/County ordinances, standard leases and rental agreements contain clauses that entitle you to “quiet enjoyment” of your home. A non-compliant neighbor can be held in lease or rental agreement violation and can be evicted by the landlord/property owner as a result.

With persistence and patience, and sometimes enlisting the help of a qualified Landlord-Tenant attorney, even the most uproarious neighbors can be changed to purring street-mates. Good luck.

Qualified Personal Residence Trusts

Sat, 01 Aug 2009 16:54:59 GMT

For many people, their primary residence is one of their biggest lifetime investments. It might constitute a large part of their estate and a large part of the inheritance that they intend to pass to their children. Accordingly, many people have two concerns when it comes to their primary residence. They are concerned both with protecting their home for their heirs and with minimizing the tax implications on their residence. A qualified personal residence trust is a relatively new way of being able to achieve these goals.

The Benefits of a Qualified Personal Residence Trust

Qualified Personal Residence Trusts offer many benefits to both the current owners of the home and the heirs who will inherit the home. If a homeowner decides to establish a qualified personal residence trust then he or she will put the home into a trust for the benefit of whomever he or she wants to inherit the property. During the term of the trust, the owner will be able to live in the house rent free so long as he or she continues to pay all the expenses of the home, including the real estate taxes. Thus, the homeowner retains right to live in his or her home and the people who will inherit the home are not burdened with taxes or other expenses at a time when they are not using the home.

How to Establish a Qualified Personal Residence Trust

Since a home is such a large asset, it is important to work with a trusted estate planning attorney when developing your qualified personal residence trust. Each trust should:

transfer title of the home into the trust;
set a defined period (for example 8 years) during which the creator of the trust may live in the home rent free while paying all expenses;
if the creator of the trust wishes to live in the home after the defined period then he or she must pay a fair market rent to the owners of the home.

Since the home is in a trust, the creator of the trust will not need to pay estate taxes on the property. The creator of the trust will, however, need to pay gift tax on the trust assets if the amount of the gift exceeds the amount exempt from gift tax. The value of the home that is subject to gift tax may be considerably less than the fair market value of the home because of the interest that the creator of the trust is maintaining in the home. It is important to note that if the creator of the trust dies while he is still living in the house rent free and before the home passes to the heirs then the value of the home may be included in his estate.

A qualified personal residence trust provides some very real benefits for families. In order to recognize these benefits, however, it is important to consult with an estate planning attorney when preparing your trust documents to make sure they comply with all applicable laws.

Quitclaim Deeds

Mon, 26 Oct 2009 18:04:23 GMT

Transfers of property can be complicated and expensive. However, the law recognizes that not all property transfers are the same. For example, there are different concerns and needs when you purchase property from a stranger than when you transfer property among relatives. Most real property transactions include the transfer of a general warranty deed that protects the buyer’s interests in the property by containing warranties that the seller has the legal authority to sell the land and that the land is free of certain encumbrances. However, general warranty deeds can be complex and expensive and they are not needed for every property transaction.

When to Use a Quitclaim Deed

A quitclaim deed is given by a grantor, the person who currently owns the property, to a grantee, the person acquiring the property. A quitclaim deed simply transfers the rights of the grantor, if any, to the grantee. It does not make any warranties that the property is free of encumbrances or even that the grantor has lawful ownership of the property. Given this significant limitation, quitclaim deeds are not recommended for initial purchases of property or transfer of a property with which you are unfamiliar.

However, quitclaim deeds are very useful in situations where you are certain of the property’s ownership and encumbrances because quitclaim deeds are generally less expensive and less time consuming to obtain than a traditional general warranty deed. Quitclaim deeds are appropriate in the following types of situations:

Divorce: if a divorcing couple is transferring property from joint ownership to single ownership or from one spouse to another then a quitclaim deed is likely to be appropriate.
Marriage after the purchase of property: similar to a divorce case, if property is owned by one spouse prior to a marriage and the couple wants to transfer ownership to joint ownership then a quitclaim deed is likely sufficient.
Gifts of property: if you are gifting property to a relative or friend then a quitclaim deed may be an inexpensive and practical method of transferring property ownership.
Transferring property to a trust or another legal entity owned by you: if you are transferring personal property into a business name or a trust then a quitclaim deed may be an appropriate method of property transfer since you already know the property encumbrances and other restrictions on ownership.
Resolving clouds on the title: a quitclaim deed may be used to resolve an individual property cloud on the title such as a misspelling on the previous deed or an improper recording of the previous deed.

What Needs to be Included in a Quitclaim Deed?

The requirements of what must be included in a quitclaim deed vary between jurisdictions but typically, at a minimum, a quitclaim deed must include: the names of the grantor and grantee, the legal description of the property, the consideration for the transfer (may be minimal such as $1 if it is a gift or to include a spouse, for example), the grantor’s signature and it must be witnessed by a notary public.

If you have any questions about whether a quitclaim deed is adequate to protect your legal interests in a piece of property or about drafting a quitclaim deed in your jurisdiction then it is important to contact a real estate attorney prior to making the transaction.

Real Estate Deeds and Taking TItle to Real Estate

Tue, 01 Sep 2009 02:29:01 GMT

In very general terms, a deed is the legal document that transfers ownership of real estate from one person or entity to another person and/or entity. While the requirements for legally valid deeds vary widely from state to state, there are some different types of deeds that are consistently used in real estate transactions, including warranty deeds, grant deeds, and quitclaim deeds. Additionally, there are different methods by which a person or multiple persons can take title to real estate pursuant to one of these deeds.

Warranty deeds are designed to protect the buyer from any problems that might arise in the context of a real estate transaction. Used most frequently in the buying and selling of real estate, warranty deeds not only transfer ownership of real estate from seller to buyer, but these legal documents constitute explicit warranties, or promises, that the seller is making to the buyer regarding the real estate transaction. For instance, warranty deeds typically contain a provision that the buyer is transferring good title to the real estate to the seller, i.e. that there are no conflicting claims of ownership or problems with the seller’s title to the real estate.

Similarly, grant deeds are legal documents that transfer ownership of real estate from seller to buyer. As is the case with warranty deeds, grant deeds contain promises that the seller has good title to the real estate, and that the seller has not already transferred the title to another person or entity. The major difference between grant deeds and warranty deeds is that where promises are explicitly made in warranty deeds, grant deeds contain only implicit promises.

On the other hand, quitclaim deeds transfer a person or entity’s interest in a parcel of real estate, but make no warranties or promises to the buyer or the person who is receiving the real estate. Quitclaim deeds are commonly used by divorcing couples who wish to transfer real estate from both spouses to one spouse, or when people leave real estate to family members through a trust, a will, or another estate planning document. It is important to note, however, that transferring legal title via quitclaim deed in a divorce situation does not solve the problem of a jointly held mortgage that is secured by the real estate. Quitclaim deeds also are useful if there is some sort of “cloud” on the title, or some conflicting claims of ownership or unclear title history. By quitclaiming his or her interest in a parcel of real estate, the grantor can effectively clear the title to the property and clarify its ownership.

Whatever type of deed is utilized to transfer ownership of real estate, people can take legal title to the real estate in different ways. Married persons generally take title to real estate as joint tenants. As a result of this ownership designation, if one spouse passes away, the surviving spouse automatically receives full ownership of the deceased spouse’s share of the property. Furthermore, in most states, if two or more people own a parcel of real estate, they all must hold equal shares of the property. Thus, in that situation, if one joint tenant passes away, the remaining joint tenants receive the deceased joint tenant’s interest in the real estate in equal shares.

Multiple persons can also hold title to real estate as tenants in common. In many states, unmarried couples who hold real estate together are typically deemed to be tenants in common. The main difference between tenants in common and joint tenants is that if one tenant in common passes away, the surviving tenant(s) in common do not automatically receive the deceased tenant’s interest in the real estate. Rather, the deceased tenant’s interest would be passed down to his or her heir(s) according to the estate plan in place, or, where there is no estate plan, according to the laws of intestate succession. Furthermore, in most states, tenants in common are permitted to hold title to real estate in unequal shares.

Sharing Your Property With Tenants

Sat, 01 Aug 2009 16:55:40 GMT

If you are lucky enough to own a piece of property that has a backhouse, cottage or granny flat on it then you may wish to rent that structure out for additional income. In fact, the opportunity to use that structure to help pay your mortgage or provide you with additional income may be one of the reasons why you bought the property in the first place. However, if you are thinking about becoming a landlord and renting out part of your property there are some important things to consider and to decide before you begin looking for a tenant.

The Landlord Tenant Agreement

Whenever you become a landlord, your landlord tenant agreement, or rental agreement, is always very important. It is especially important when you are going to be sharing the property with your tenant. In addition to the standard terms of a landlord tenant agreement such as the amount of the rent, when the rent is due and describing who is responsible for maintenance, repairs and insurance, an agreement to rent a backhouse should include information about:

· How common areas such as lawns and pools are going to be shared. Are you going to allow your tenant to access them at all or only at certain hours?

· The number of guests your tenant can have on your property at one time. Are you concerned about parties and how that will affect your ability to relax or work at home?

· How many tenants are going to occupy the rental space. You may be concerned about the safety of the tenants, the potential noise and the wear and tear on the structure.

· The presence of children and / or pets both of whom can damage your property and create unwanted noise.

The Tax and Legal Implications of Renting a Backhouse

There are always tax implications to being a landlord. However, if the tenant shares your property then your tax liabilities are a little more complicated than if you have a separate property to rent. It is important to keep track of the expenses for the part of the property that you use and the part of the property that you rent. Your tax deductions are dependent on you keeping careful records and taking proper deductions for the part of the property that you use personally and for the part of property that you rent to others.

Since you will be living in close proximity to your tenant, it is best to have a real estate attorney review your landlord tenant agreement before you provide it a tenant for his or her signature. A real estate attorney can also advise you concerning the tax implications of your arrangement. Then, you can be confident that the rental will provide you with income and that you are protecting your property interests.

If the rental of a backhouse, cottage or granny flat is done in the correct manner then it can provide real benefits to the property owner / landlord. Therefore, it is important to consider your options and create an agreement that will be beneficial to you now and in the future.

What You Need to Know About Your Home Inspection

Sat, 01 Aug 2009 16:52:46 GMT

Before you purchase a home it is important to have a thorough inspection done by a qualified home inspector. You might think that you’ve found the right home for you based on the information provided by the seller, the look of the home and the location of the home. You might think that you are paying a fair price for this piece of real estate. However, if the home inspection reveals an expensive problem that will take a lot of work to fix, would you still feel the same way?

Almost every home inspection that is conducted on anything other than brand new construction will report on some problems that need to be fixed or suggestions that could improve the property. That said, not everything reported in a home inspection report is a big deal. Some things, such as a broken lock for example, can be fixed for just a few dollars and without a lot of effort.

Since almost every inspection report on previously owned properties contains some issue, the home inspection contingency clause in most offers to purchase real estate only allow a buyer to cancel the contract if there is a significant or substantial problem revealed by the inspection.

What constitutes a significant or substantial problem will vary depending on the property. Buyers and sellers should consider the cost of the repair in relation to the purchase price of the home. In many cases the following kinds of problems may be substantial or significant:

Structural Elements of the Home: if the roof needs repair, the foundation is faulty or the structure is unsound then this is likely an expensive problem to fix. This may include water problems such as water in the basement when it rains.
Plumbing System: if there is a complicated problem with the plumbing system it can be difficult and expensive to repair. However, if the problem is limited to one small area such as a sink then it may not be a significant problem.
Electrical System: as with the plumbing system, if there is a systemic problem then it is likely significant. If, for example, the wiring system is not up to code, then that is a safety problem that can be expensive to fix.
Furnace and Heating System: a problem with the furnace or heating system is also a safety issue and can be difficult to fix.
Asbestos: this is not typically part of a home inspection but if asbestos may be present in the home then a potential buyer should hire an asbestos inspector to determine if it is there. Asbestos can be dangerous to breathe in and lead to serious health issues such as mesothelioma. It can be expensive to remove.
Lead Paint: lead paint, like asbestos, is not typically part of a home inspection but it may be present in homes built prior to 1978. It is important to have your home tested for lead paint and to have all lead paint removed from the premises, especially if pregnant women or young children will be living in the home.

Other issues such as problems with individual appliances and cosmetic problems such as stained carpeting or torn wallpaper are usually insignificant and not a cause to renege on an offer to purchase real estate.

Before canceling an offer to buy because of a problem discovered during a home inspection, the potential buyer typically must share the inspection report with the seller and offer the seller the chance to fix the problem or negotiate a solution with the buyer. Once the seller knows of the problem then the seller is usually obligated to disclose the problem to other potential buyers. Therefore, many times it is in the seller’s best interest to cover the cost of the repairs or to negotiate with the buyer rather than to let the buyer back out of the agreement to purchase the home.

What are

Mon, 27 Jul 2009 03:07:57 GMT

Traditionally, homeowner’s insurance policies have contained an exclusion clause for damages caused by “acts of God”, a catch-all term that covers any sort of act of nature that cannot be controlled, like earthquakes or hurricanes. “Acts of God” also typically include damages as a result of war, i.e. a nuclear war. In recent years, however, there has been a trend toward the removal of the “acts of God” exclusion clause in many homeowners’ insurance policies, at least with respect to some such events. In any case, it is essential when purchasing any homeowner’s insurance policy that you educate yourself regarding the damages caused by “acts of God” that your policy will – or will not – cover, as well as whether you need to purchase additional insurance coverage.

Many damages to homes are caused by acts of nature, such as high winds, tornadoes, hail, storms, and ice, which may or may not be classified as “acts of God”, depending on the terms of your homeowner’s insurance policy. If your home suffers damages as a result of an “act of God”, you should immediately contact your homeowner’s insurance company in order to determine whether the damages will be covered. There are some specific types of damages that your homeowner’s insurance policy might not cover, even if they result from an “act of God” for which your policy generally provides coverage. For instance, if there is a major ice storm that causes damage to your roof, your homeowner’s insurance policy is likely to provide you with coverage for the damages to your roof. However, there are some property damages that you also may have suffered as a result of the ice storm that your homeowner’s insurance policy may not cover. For instance, some homeowner’s insurance policies will not provide coverage for the costs of spoiled food resulting from an extended power outage caused by an ice storm, while other homeowner’s policies will cover such costs. Therefore, you must read your homeowner’s insurance policy carefully, and be aware of such exclusions in coverage.

Furthermore, common “acts of God”, such as flooding and earthquake damage, are generally still excluded from coverage by most homeowner’s insurance policies. Your only option for coverage for damages caused by these “acts of God” is to purchase an add-on policy, called a “rider”, that provides you with additional coverage in the event that your home receives damages from an excluded “act of God”. Particularly if you live in a flood-prone area, you must assess the likelihood and/or risk of damages that might occur to your home as a result of flooding with the costs of maintaining additional flood insurance coverage. If your home, or homes in your area, have sustained flood damages in the past, it is likely to be worth the costs of purchasing a flood insurance rider. If you live in a high-risk area in terms of flooding, you may be able to purchase flood insurance from the U.S. government through the National Flood Insurance Program.

Free Property Law Articles

Sun, 29 Nov 2009 01:58:47 GMT

Free Property Law Articles

Free Real Estate Attorney Articles

Sun, 29 Nov 2009 01:58:47 GMT

Free Real Estate Attorney Articles

Free Real Estate Law Articles

Sun, 29 Nov 2009 01:58:47 GMT

Free Real Estate Law Articles

Sun, 29 Nov 2009 01:58:47 GMT

Free Real Estate Law Articles

Free Real Estate Lawyer Articles

Sun, 29 Nov 2009 01:58:47 GMT

Free Real Estate Lawyer Articles

Free Real Estate Litigation Articles

Sun, 29 Nov 2009 01:58:47 GMT

Free Real Estate Litigation Articles

Free Real Estate Tax Articles

Sun, 29 Nov 2009 01:58:47 GMT

Free Real Estate Tax Articles

Free Tenant Rights Articles

Sun, 29 Nov 2009 01:58:47 GMT

Free Tenant Rights Articles