Event Coverage
Legal Experts Discuss Risk Management Issues
Carolyn Miller, SILVAR Board Director and Education Committee Chair; Gov Hutchinson, C.A.R. Assistant GeneralCounsel and VP of Member Legal Services; Dave Hamerslough, SILVAR BOD attorney; and SILVAR President Gene Lentz, are pictured here at the conclusion of the seminar.
At a seminar held Monday at the Community School of Music and Arts in Mountain View, California Association of REALTORS® Assistant General Counsel and Vice President of Member Legal Services Gov Hutchinson and SILVAR Board Attorney Dave Hamerslough alerted members to certain issues that could cause problems from a risk management standpoint. Topics focused on disclosure, new regulations, short sales, foreclosures and REOs.
Over 150 SILVAR members attended the seminar. Hutchinson reminded REALTORS® of the following regulations:
Carbon Monoxide Requirement
SB183 requires every existing single-family residence to install or plug in a carbon monoxide device by July 1, 2011. All other residential units will have to have the detectors in place by January 1, 2013. Their installation is not a precondition of sale, but the Real Estate Transfer Disclosure Statement (TDS) now includes a checkbox to indicate whether the seller has a carbon monoxide detector.
Lead-Based Paint Renovation Rule
The U.S. Environmental Protection Agency's Lead Renovation, Repair and Painting Rule addresses remodeling and renovation projects disturbing more than six square feet of potentially contaminated painted surfaces for all residential and multifamily structures built prior to 1978 that are inhabited or frequented by pregnant women and children under the age of six. Such renovation needs to be under the supervision of a certified renovator. Among other things, the rule requires a cleaning inspection after the work is completed. More information on this rule can be found at C.A.R. Legal and the EPA website at www.epa.gov.
Home Energy Rating System (HERS)
The California Energy Commission has established regulations for a statewide HERS (Home Energy Rating System) program to certify home energy rating services. While HERS is not a mandate, presenting a buyer with a HERS booklet satisfies a sellers' obligation to disclose information. For more information, visit www.CalCerts.com.
Mortgage Assistance Relief Services Rule (MARS)
Under the Mortgage Assistance Relief Services (MARS) rule real estate agents who negotiate short sales with lenders, promote their services as a way to help consumers avoid foreclosure, and negotiate, obtain, or arrange a loan modification, deed in lieu of foreclosure, loan forbearance, or extension to cure a default, must provide certain disclosures, refrain from requesting or receiving an advance fee, refrain from engaging in certain deceptive acts, and retain records for 24 months. Disclosure forms that meet these requirements are in the process of being prepared by, among others, the California Association of REALTORS®.
Throughout the seminar both Hutchinson and Hamerslough stressed when dealing with distressed properties, you should make sure your clients understand there will be issues and ramifications. Advise your clients in writing that they should seek the advice of a qualified tax advisor and real estate attorney before pursuing a course of action.
Also, make sure you document everything, especially in transactions involving distressed sales and the removal of a financial contingency. Both legal experts could not emphasize enough the importance of documentation and leaving a paper trail, noting it could make or break your case, should you, the agent, end up in court.
"We all hear what we want to hear," said Hamerslough."Without a paper trail, you may have no chance to pursue your case."
Hamerslough also underlined the importance of agents working together. "We need to do a better job of trying to keep deals together and try to look for solutions," added Hamerslough.
Hutchinson, who advises REALTORS® through C.A.R.'s Hotline on all aspects of real state law and trains and supervises other hotline attorneys, told REALTORS® if they are ever in doubt, they should call the C.A.R. Legal Hotline at (213) 739-8282 for REALTORS® and (213) 739-8350 for brokers.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
For further information, please email or call the SILVAR office at (408) 200-0100.