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HOLDING TITLE
TO HOME
Q.
We are in the process of purchasing a home. The escrow will be closing
in two weeks. Our real
estate agent suggests that we hold title as joint tenants.
What is your opinion?
A.
I don't have sufficient information to advise you on this important
matter. Deciding how
to hold title has many legal ramifications. A real estate lawyer should
be consulted who also has experience in estate planning.
Your real estate agent is practicing law without a license. Top
MINIMUM DOWN
PAYMENT REQUIREMENT
Q.
Our association has recently adopted an amendment to our CC&Rs
that requires purchasers of homes in our community to put at least
50% down. The intention is to discourage buyers who cannot afford
to pay our association's assessments. We are tired of dealing with
delinquency problems. Is this amendment enforceable?
A.
Probably not. Courts will not enforce unreasonable restraints on
alienation (the sale or leasing of property). A 50% down payment
requirement will probably be considered unreasonable because most
second trust deed lenders do not require such large down payments
or equity positions. Your association is effectively in the same
position as a second trust deed lender, in terms of risk. Top
VIOLATION
OF ARCHITECTURAL REQUIREMENT BY FORMER OWNER
Q.
We recently purchased a townhome only to find out that the former
owners had previously been notified in writing by the board of directors
that their patio cover did not meet the architectural requirements
of the community. What can we do?
A.
Section 1368 (a)(5) was recently added to the California Civil Code
to deal with this type of problem. Under this section, a copy
or a summary of any notice previously sent to the owner that sets
forth any alleged violation of the governing documents that remains
unresolved must be provided to the prospective purchaser as soon
as practical before transfer of title.
Any person or entity who
willfully violates this section can be held liable to the purchaser
for actual damages and, in addition, a fine not to exceed $500.00. Top
REQUIRED
DISCLOSURES
Q.
I am a new real estate agent and would like to specialize in selling
condominiums. What types of disclosures are required to be made
before a condominium can be sold?
A.
Before a separate interest (unit in a condominium, lot in a planned
development, or right to occupy in a stock cooperative) can be sold,
the owner is required to provide the following to the prospective
buyer:
(1)
CC&Rs, bylaws and association rules;
(2)
A statement from the association's representative as to the amount
of the regular and special assessments, fees and, if applicable,
the amount of any unpaid assessments and/or other charges;
(3)
Any change in the association's regular and special assessments
and fees which have been approved but have not yet become due
and payable;
(4)
If applicable, a list of preliminary construction defects;
(5)
If applicable, any settlement agreement between the association
and builder regarding construction defects;
(6)
The association's operating budget which must include a summary
of the association's reserve study;
(7)
A review of the association's last financial statement prepared
by a licensee of the California State board of Accountancy, if
the annual gross income of the association exceeded $75,000;
(8)
A statement describing the association's policies and practices
in enforcing lien rights or other legal remedies for default in
payment of its assessments; and
(9)
A summary of the association's insurance coverages.
In addition, sellers are
required to disclose to any prospective purchaser any fact materially
affecting the value and desirability of the property, including
but not limited to, the physical conditions of the property and
previously received reports of physical inspections.
Lastly, real estate agents
are required to conduct a reasonably competent and diligent visual
inspection of the property offered for sale and to disclose to the
prospective purchaser all facts materially affecting the value or
desirability of the property that an investigation would reveal.
As you can see, the duty
to disclose is extensive. It is recommended that you utilize the
applicable standard California Association of Realtors forms and
that you take your duty to disclose seriously. Top
DUE DILIGENCE
BEFORE PURCHASE
Q.
I am purchasing a condominium. What should I review and approve
before I make the decision to commit to a purchase?
A.
All of the items set forth in the answer above, plus the following:
(1)
An inspection report from a licensed and independent home inspector,
(2)
A structural pest control report, and
(3)
Minutes of meetings of the board of directors for the last twelve
months. Top
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