Personal Property Left Behind. Whose is it?

REALTOR® Outlook

By Kay Wilson-Bolton

January 15, 2008

With the number of foreclosures on the rise, so does the problem of dealing with personal property left behind when the former owners generally find smaller accommodations and can’t take the boat, the skis, the sound system or the dog and cat.

California law is very specific about how personal property left behind must be handled. Interestingly, these rules do not apply to manufactured homes, mobile homes, or commercial coaches.

When a tenant has vacated the premises after termination of the tenancy and property has been left behind, a landlord must give a written notice (Notice) to the tenant and any other person the landlord reasonably believes may own the property.

The Notice should contain the following items: a description of the property which is sufficiently clear to permit the owner of the property to identify it; the place where the property may be claimed; a statement to the owner that reasonable storage costs may be charged before the property is returned; the date before which the claim must be made. The date given cannot be less than 15 days from the date the Notice is personally delivered, or, if mailed, 18 days from the date the Notice is deposited in the mail.

In addition to the items listed above, the Notice should also contain a description of what will happen to the property if it is unclaimed. If the property is believed to be worth $300 or more, the Notice should include these points:

If the owner fails to reclaim the property, it will be sold at a public sale after a Notice of Sale has been given by publication;

The owner has the right to bid on the property at the sale. Once the property is sold, the costs of storage, advertising, and sale will be deducted from the sale price and any remaining money will be paid over to the county; and the original property owner may claim the money at any time within one year from the date the county receives the money.

If the property is believed to be worth less than $300, the Notice need only state this fact and that the property may be kept, sold, or destroyed without further warning to the owner if it is not claimed within the time period listed in the Notice.

Some say the measure can be the value of the goods if sold at a garage sale.

The landlord should mail the Notice, via first-class mail, postage prepaid, to the presumed property owner’s last known addresses and it would be wise to include the vacated premises, place of business, post office box, etc.

The landlord may release the property to a former tenant or to any other person the landlord reasonably believes to be the owner of the property as long as the tenant or other owner pays the reasonable storage fees and takes possession of the property prior to the date specified in the written Notice..

If the property owner claims the property by the date specified in the Notice or any time prior to the sale of the property, the landlord may charge all the reasonable costs of storage incurred which remain unpaid from the time of the termination of tenancy to the time the property is claimed

When the landlord stores the abandoned item on the rental premises, he/she may charge the party who claims the item the fair rental value of the space reasonably required to store the item for the term of the storage.

From the proceeds the landlord may deduct the expenses for storage, advertising, and sale. The balance, if not claimed by a former tenant or property owner, must be paid into the treasury of the county in which the sale took place not more than 30 days after the sale. The landlord should contact the county treasury department to determine how sale proceeds should be paid to the treasurer.

The property owner has one year from the date of sale in which to make a claim to the treasurer for the balance of the sale proceeds by making application to the county treasurer or other official designated by the county.

A residential landlord may not refuse to return items which a former tenant has left on the premises when the tenancy ends if the tenant requests the items under the following conditions:

The tenant makes a written demand which includes a description of the personal property and the tenant’s mailing address within 18 days of the end of the tenancy; the landlord or his/her agent has control or possession of the item at the time the request is received;

The tenant, in response to the landlord’s written request, pays the landlord’s reasonable storage and removal costs for the item prior to the landlord returning the item; and,

The tenant agrees to claim and remove the item at a reasonable time agreeable to the landlord but no later than 72 hours after the tenant pays the storage and removal fees.

It is best to hope that the owners retrieve their possessions, and it is easier to store them where you found them, rather than move them to another location. It is too easy for that diamond necklace, handed down from Grandma, to get lost!

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com

 

Run! Don’t walk to your bank.

REALTOR® Outlook

By Kay Wilson-Bolton

October 4, 2008

All the recent talk about the new face of the banking industry and the obligations “they” have to talk to borrowers before foreclosure proceedings begin is true.

They are talking. They are listening and they are making amazing and life changes decisions for homeowners on the verge of foreclosure.

It isn’t easy and it doesn’t happen overnight. Is it worth it? You bet. Here are two cases of success.

A family in Ojai had a mortgage of $3300 after their interest rate adjusted and they could not make the payment and decided not to try. However, with some prompting a fellow REALTOR®, they began the communication process with their bank.

After 70 days, the letter arrived granting them a loan modification with interest only payments of $1700 for five years at a reduced interest rate: no balloon payment, no accelerating interest rate, no build-up of unpaid interest.

The new amount is what they would have to pay in rent had they moved, so it was a win for all parties in many ways.

Another family in Santa Paula owned their home for 12 years and refinanced it when the kids where going to college and a family member was sick. Payments were $4500. It took four months and numerous letters but the day their letter arrived, they learned that their new payment would be $2800 with a fully modified loan that will keep them in their home.

Some will argue that the mortgage meltdown should have not happened in the first place but that is old news. We need to look to the future and fix what we can with our new tools—thanks to Congress.

One thing both homeowners had in common was that they were current on their payments and contacted the bank when they knew they couldn’t make another one.

The full benefits and impact of this legislative have yet to be felt. If you are discouraged, scared, mad about your financial situation and the potential loss of your home, get out your loan payment coupon and find the toll-free number to someone who can help you.

Yes, we are all in the hands of our mortgage company or bank in one way or another. This new legislation is a perfect example of why government is often needed to make people and institutions do the right thing.

I don’t remember that specific element in the Constitution but I know that Amendment IV refers to the rights of people to be secure in their persons and their houses.

 

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista with offices in Santa Paula and Ventura. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com

 

REALTOR® Outlook

Ethics and Revealing Prices

June 10, 2008

The NATIONAL ASSOCIATION OF REALTORS® recently revised three of its Standards of Practice and these changes require all buyers’ agents to inform clients that their offers might not be kept confidential.

While this revision is being construed as a change in the way real estate agents and brokers can ethically conduct business, it’s not, says June Barlow, CALIFORNIA ASSOCIATION OF REALTORS® vice president and general counsel. “Although most listing agents think it is unethical to share the price of another’s offer with someone else, there is nothing in the NAR Code of Ethics that prohibits it,” Barlow explains.

“The rules have always been that the seller has no obligation to keep any offer confidential unless you have a written agreement. What’s changed,” says Barlow, “is that NAR’s Code of Ethics explicitly requires a buyer’s agent to tell clients that their offers may not be kept confidential.”

That said, the whole issue of “shopping offers” has come into play, admits Barlow.

“In buying and selling businesses and other transactions, it’s very common to have a confidentiality agreement or nondisclosure agreement, which would be signed before ‘secrets’ are spilled. With real estate’s dynamics, buyers usually don’t get something signed by the seller—except for the agency disclosure form—before you present offers and put pen to paper on the purchase contract.”

For Barlow, the legal implications of NAR’s revisions have yet to fully manifest: Will buyers who are aware of NAR’s provision insist on a confidentiality agreement to protect them? “If they do that,” Barlow opines, “then we’re going to see confidentiality agreements and, once that starts, that will change the dynamic of our transactions. It would require a pre-agreement (the confidentiality agreement) before engaging in the real estate purchase offer interplay.

If it is signed, there would be other issues: How much subtle info do you give someone to work in your client’s best interest without going over the line and breaching the confidentiality agreement?” Barlow asks. “If confidentiality agreements become common, it will be a challenge for all the brokers, both in the terms of training and a human challenge in terms of changing behavior.”

We’ve provided some examples of how the current changes to the Code of Ethics impact the agent-client relationship.

Scenario #1 – A buyer’s agent working with a buyer presents a purchase offer to the seller through the listing broker. The listing broker takes the offer under consideration but doesn’t respond immediately.

Meanwhile, the listing broker has talked to the seller and other offers have come in. The seller advises the listing broker to reveal what the first offer is to see if subsequent buyers will beat it. Is it ethical for the listing broker to share the offering price with others?

Answer: There is nothing in the REALTOR® Code of Ethics to prohibit this. “It may not be the way that every listing agent would operate,” says Barlow, “and some would contend that could hurt the seller. That’s a marketing decision that the client, the seller, and the listing broker need to make.”

Scenario #2 – A broker is representing both the buyer and seller. During the transaction, the seller says, “I am OK at $450,000, but I might go as high as $470,000, and the buyer says I am going to offer $430,000 but I might go up to $450,000.” Can you share that information?

Answer: No. Under dual agency, this would clearly be against the listing broker’s own buyer’s interest in most instances to share this info with other competing buyers, because the listing agent also represents the buyer. Civil Code Section 2079.21 prohibits dual agents from disclosing that the buyer is willing to pay more than the offer price or that the seller will take less than the list price without the express written consent of that client.

Scenario #3 – Does the dual agency apply if there are two different sales agents in the same office representing a buyer and a seller?

Answer: Yes. The brokerage firm is the dual agent even though many offices use two different agents to give each client separate attention. The brokerage firm itself is the “agent.”

Scenario #4 – If you have a confidentiality agreement–which is very unusual–is it confined to only price or price and terms?

Answer: Because there is no standard confidentiality agreement, you would have to look at the scope of each one. Does it include terms? When does it expire? Are there exceptions? Does it include other agents in the form? If an agent has a confidentiality agreement, then agents will have to be very careful to comply with its precise terms. This includes communication with other agents. Once under such an agreement, hints that reveal the price may violate the agreement. Anything covered by the confidentiality agreement is off-limits.

In order to avoid an implied breach, you cannot provide hints or suggestions. According to Barlow, agents working under this scenario “would have to be extremely careful lest they violate that agreement. It’s not the open kind of communication that many are used to.”

C.A.R. Standard Forms Address Confidentiality

Four standard forms were revised to address the issues of confidentiality raised in this article and by the changes to the REALTOR® Code of Ethics: Buyer Broker Agreement (Form BBNN), Buyer Broker Agreement Exclusive (Right to Represent) (Form BBE), the Buyer Broker Agreement Non-Exclusive (Right to Represent) (Form BBNE) and Statewide Buyer and Seller Advisory (SBSA). These standard forms are available at http://www.car.org by selecting “Legal,” then “Standard Forms.

The Cons of Shopping Offers

  • Shopping offers may make buyers angry.
  • Disrupts relationships with other brokers.
  • Competing buyers might offer lower prices than they otherwise would have.

Code of Ethics Revisions*

Specifically, the revised Standard of Practice 1-13 reads: When entering into buyer/tenant agreements, REALTORS® must advise potential clients of the possibility that sellers or sellers’ representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties. (Adopted 1/93, Renumbered 1/98, Amended 1/06)

The revised Standard of Practice 1-15 reads:

REALTORS®, in response to inquiries from buyers or cooperating brokers, shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. (Adopted 1/03, Amended 1/06)

Kay Wilson-Bolton has been a REALTOR® in Ventura County Since 1976.

 

 

 

 

 

 

 

 

 

 

 

 

Don’t Burn The Deed–Yet

REALTOR® Outlook

By Kay Wilson-Bolton

December 8, 2008

 

Before anyone decides that owning a home with no equity is a bad idea, please stop and think about what not owning it means.

What a mess this seems to be.  Scenarios of stress and surprise are everywhere.  We must look at what is ahead of us, not just at what is in front of us.  Anyone who talks to other people during the day, needs to take a role in encouraging others, consoling them and being generally kind.  None of us knows the depths of despair and confusion that others are shouldering.

It seems natural to balk at the idea of owning a home that is worth less than what you paid for it.  In the short run, that is problematic, but only if you need to sell it.  If you can afford the payment, my advice is to hang on to it.  Dumping it into the pool of unwanted properties will not solve your problem and it will make the problems of others even worse.

You will lose your mortgage interest deduction and pay more income tax, you will have to move which disrupts the family and your pets, and you will become among the new army of renters who will make someone else’s mortgage payment.

A recent article noted the stress of a family whose home dropped dramatically in value in the last 12 months. However, they noted that they live in an area they like and near services they enjoy. My view is that this sounds like a happy family and that staying put, as long as they can afford the payment, makes sense.

It is unknown how long foreclosure victims will bear the scars on their credit report. In the last downtown of the 1990’s, buyers were able to purchase another home within two years of a foreclosure.

It is possible that this environment has created a new, forgivable trespass and that purchasing another home in a short period of time will be possible—as long as they qualify for the loan.

To date, corporate sellers have been unwilling to resell a home to one related to the one lost it.  There is a new question on many broker price opinions as to whether or not a sale was “arm’s length.”

It is not uncommon for couples to purchase a home under only one name, likely the one with the strongest credit score. After the foreclosure, the other mate has tried  to repurchase the property.

While it sounds like a clever idea, the broker representing the bank/seller better make that disclosure if it is known to him/her.  Banks take a dim view of this practice. In one case, a couple paid $800,000 for their home in 2003 with a lousy loan product and gave up the home in 2005.

That same home is now being offered at $550,000 and the other mate wants to purchase it under his name alone. Let the bank decide if their policies allow it.

This is the season for celebration, not for spending money. It is a time for families to rethink our values and focus on them. A great opportunity is being presented to every one of us and that is to shed the notion that we can buy anything we want or that we believe the media’s messages about what we need.

Life may not easy now for some, and it is going to get easier any time soon.  Make a list of the good things in your life. Place it on your refrigerator and let it be the daily reminder of what is really important. You and your family will fare this season better.

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista with offices in Ventura and Santa Paula. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com

 

Banks are Sellers Too.

REALTOR® Outlook

By Kay Wilson-Bolton

November 3, 2008

At a time when the public and the real estate community are trying to understand and develop expectations for buying a bank-owned home, the rules seem new every morning.

Dilemmas range from whether or not to ask for repairs up front or gamble that the seller will agree to make repairs during the inspection period. Another is whether or not the bank will agree to a request for a price reduction rather than start over with a new buyer?

What we know for sure is that anything is possible. Consider one property in Oxnard which has received 19 offers in the last 12 months—three offers were accepted, but each escrow failed because buyers were either not qualified or lender required repair costs exceeded buyer’s ability to pay. The same house was just sent to auction at the same time the price was reduced to one below the last offer.

In another case, a buyer paid over asking price with an all cash offer competing with 8 other buyers. In three weeks, the lender stated she was not qualified for a loan. Her agent wrote an apology note to the listing agents stating that the buyer had purchased so many properties the lender would not approve them for one more.

The seller, in this case a bank, has no sympathy for this buyer and is demanding the deposit as liquidated damages.

Then there is the bank addendum. As a condition of acceptance of an offer, each seller/bank its own variety of addendum which clarifies, amplifies and amends certain provisions of the purchase agreement.

One alteration negates the whole document.  It’s take it or leave it. Their attorneys are bigger than anyone else’s.

The most difficult challenge is the house with mold.  It is almost impossible to get an accurate estimate of the scope of work in order for the bank to approve the best bid. The cost for testing at the beginning and at the end is clear. The remediation estimate is accurate only so far as the contractor can “see the problem”.  Not until the area is opened up is the real scope of work evident. After the affected areas are moved, it is necessary to replace cabinets, sinks, window casings, bathroom tile and floor coverings.

It often takes many days to get the lender/seller to review the bids, calculate the time to complete the work and the rate of market decline ahead. Meanwhile loan locks come and go and buyers watch other purchase opportunities pass them by.

The time it takes some asset managers to return fully executed documents is so long that the time frame for buyer’s inspection often expires. Before escrow is opened, some buyers have already completed their inspections and are requesting repairs or concessions.

Many buyers are discouraged that their offers, even at asking prices, are not being accepted due to multiple offers.  Buyers who are trying to buy within their purchase limits are facing increasing competition because prices are dropping and more families can afford to buy the same home. This is the trend we will see into 2009.

REALTORS® who are working hard with buyers to help them find a home deserve special acknowledgement in this new business environment. They not only need skills to do the work, they need patience to stay with it. On some days, REO listing agents have very few answers and can provide very little assistance.

Does all of this make sense? No. Is it today’s new business model? Yes.

One thing is constant. It’s the REALTOR®. Whether our skill levels are high or not so high, we care about our clients and the business. The proof is that we continue to talk to each other, work through the process and complete the circle. The circle means there is a beginning and an end. The circle is defined by the REALTOR® in the center of the transaction.

There is largely one reason I write about these things. As King Solomon reported in the Old Testament book of Ecclesiastes Chapter 8, “wisdom brightens a man’s face and changes His troubled appearance.”

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista with offices in Ventura and Santa Paula. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com

 

All Equal Offers Are Not the Equal.

REALTOR® Outlook

By Kay Wilson-Bolton

February 27, 2008

A tradition that developed during the last price “increasion” became its own phenomenon. It has to do with sellers paying buyers closing costs.

Not long ago, sellers had the luxury of adding 3% to their home sale price which is equivalent to the amount most lenders will allow sellers to pay for buyer’s closing costs.

The practice was unique to some buyer groups, and not all. I believe that this factor was one of the single most significant contributors to home price increases.

Your home sold for $500,000. My home is just like yours, but it has a pool. So, mine must be worth $530,000.  My buyer has no money for closing costs and has asked me to pay them so I will just add it to the price. My sale price is now $545,000.

That is how the climb to Mt. Price began. The practice of sellers paying closing costs continues today, but not in all buyer pools.

Just today, a lender told a buyer that if their agent had just asked, the bank would have paid 3% of their closing costs.  Imagine the conversation that followed that bit of information.

Not all agents think sellers are willing to pay costs and not all buyers need them. However, if some are, let’s get on board and the rules apply to everyone so there is equivalent benefit.

It appears now that if real estate agents don’t make buyers aware that they can ask for closing costs, they might be depriving their buyers of a financial benefit.

If lenders are telling buyers to ask for costs, agents and REALTORS® need to be aware of that and write the offer correctly the first time.

Will it increase the cost of housing?  Eventually.

Will it increase buyer investment and commitment in home ownership? No.

Will it make it easier for buyer to purchase homes? Yes.

What is the goal? Is it home ownership? Is it investment opportunity? Just be sure that if you are a seller and you are asked to pay closing costs, you can say, “no”.

But then you could increase the price of your home to cover the costs. And, here we go again.

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ability. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com

 

Don’t Get Motivated Without a Permit 

REALTOR® Outlook

By Kay Wilson-Bolton

September 16, 2008

It’s a three day weekend and you get an urge for nesting instead of camping. Those concrete blocks in the back yard have been begging for installation and you figure it’s a good time to build that wall. The neighbors are out of town and you can work without input or insults.

Best to not do it. Plant roses, mulch the yard and straighten the garage instead.

With every jurisdiction looking for ways to pay for services that have nothing to do with providing them with traditional tax revenue sources, don’t get stuck building a wall without a permit. The costs to correct and the fees to comply are hefty. In this case, the penalty equaled the cost of the wall.

In a current situation, the preliminary title report revealed that the City had recorded a Notice of Non-compliance for a concrete block wall.  An escrow cannot close without a Statement of Compliance so the task began to discover the integrity of the wall.

Four weeks and $4180 later, we discovered the wall was built to standards greater than code.   How simple it would have been to get a permit, build it, get it inspected and have a building inspector sign it off.

The list of construction and installation activities that requires permits is lengthy. It generally applies to plumbing, heating, electrical and some structural work. Surprisingly enough, in some cities, the installation of a new kitchen does not warrant a permit. However the installation of new electrical outlets, ceiling fans and water lines does.

One very attractive revenue source will be the mandatory inspection of residential units as a point of sale requirement. The real estate community has managed to work with at least two cities to forestall the implementation of this requirement, so the focus has moved to mandatory inspections of multi-family units.

The budget crisis has a massive trickle-down effect that requires local jurisdictions to get creative with fees for service—including the cost of an extra trash barrel, cities providing competing services and the fee for a 911 call.

It is tempting to think that working around the permit is no big deal. In the short run, it isn’t.  It will when it is time to sell and you have to disclose that the concrete wall was built without a permit.

There is nowhere to go but hire an engineer with a pactometer who will conduct a stress test to discover the amount of grout, the presence of rebar, the width and depth of the footing.

Good citizenship does not require that we pay our fair share of the hometown budget deficit. If in doubt about the permit requirements, make a phone call. If it’s a local call, it might still be free.

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista with offices in Santa Paula and Ventura. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com

 

A Deed in Lieu is One Way Out. In other words, “Stop the World. I want to get off.”

REALTOR® Outlook

By Kay Wilson-Bolton

August 18, 2008

To some this simply means, I don’t want to play this game anymore. To homeowners who can’t make their payment and to others who don’t want to, deeds in lieu of foreclosure are a way of getting rid of that house that is now so much trouble.

It is an alternative to a short sale or foreclosure . It means that homeowners simply give their property to the lender who made them the loan.

Sounds pretty simple and rather attractive to most.   Remember that nothing is easy. No matter your worldview, we don’t shed the consequences of our decision so easily, and REALTORS® need a basic understanding of this process to effectively assist their clients in these circumstances.

A deed in lieu of foreclosure is a deed given by the trustor (the borrower) to the beneficiary (the lender) to stop the foreclosure process or as a way to completely avoid the start of the foreclosure process.

When a lender accepts a deed in lieu of foreclosure, the lender avoids the costs and delays of foreclosing. However, junior liens are not extinguished whereas in a foreclosure, junior liens are.

The borrower may try to set the conveyance aside, and/or the borrower’s other creditors may argue that the conveyance was a “fraudulent conveyance” which jeopardizes their ability to satisfy their claims against the borrower.

Lenders can protect themselves against hidden junior liens by obtaining an endorsement to the beneficiary’s title insurance policy that places title in the beneficiary free and clear of any junior liens.

A deed in lieu of foreclosure and thus stops the foreclosure and, the borrower avoids any further injury to his/her credit and insulates himself/herself from any possible exposure to a deficiency judgment.

If the deed in lieu is given to the lender early on, the borrower avoids having a notice of default recorded against his or her name.  However, the borrower will be denied any opportunity to retain the excess proceeds, if there are any, following a trustee’s sale.

Borrowers better have a clear written agreement between the borrower and the lender regarding this issue of whether the debt is cancelled or whether the borrower still owes the lender any additional sums of money when tax time rolls around.

A deed in lieu of foreclosure, given at the time of making the loan or required to be given in the loan documents, effectively cuts off the borrower’s redemption rights (with a judicial foreclosure only) following default and is prohibited by law.

At one time, there was a distinction about between the disclosure requirements upon a bank that foreclosed on a property and one who accepted a deed in lieu of foreclosure.

In this day of meth labs, death by suicide and AIDS, these elements are problematic to a buyer of a home acquired by foreclosure or by a deed in lieu of foreclosure.

The bottom line is for all buyers to beware, work with people you know and trust or is known by someone who is.

Ask questions. Demand answers. Don’t pay for things that are actually free. Remember that a prostitute is a person who willingly uses his or her talent or ability in a base and unworthy way, usually for money.

A predator is an organism that lives by preying on other organisms and victimizes, plunders, or destroys, especially for one’s own gain. They eat their prey while it’s still alive.

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista with offices in Ventura and Santa Paula. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.readysetkay.com