Read Get the Facts including the Legal Hotline Q & A
Get the Facts is a Membership update sent to Washington REALTOR® members and contacts each Tuesday.   Click here if you are having trouble viewing this message.
Get the Facts  Weekly Membership Newsletter
January 10, 2017  -  Stay Connected!
 
    

 
QUESTION: What do you suggest we do when representing a buyer in this case? We wisely mark Form 21, Line 13, indicating that the seller will pay charges & assessments at or before closing but the seller counters by striking that choice and stating that buyer will assume. BUT, time is of the essence for buyer to get this house before someone else does so we ask the listing agent, who says "seller doesn't know of any assessments due after closing". As you know, sewer cap fees, HOA assessments and others charges are not recorded on title anyway. Not all listing agents disclose what is known about these items. I know I can warn the buyer that there could be undisclosed fees they’d be responsible for – but WHAT ELSE CAN BE DONE, so as we represent the buyer’s best interest, we have all the info we need? (When often, time is not on our side!)



ANSWER: All that broker can do is advise buyer of the risks associated with the situation and provide some potential tools for buyer to employ to gain additional information. But, broker cannot "fix" this problem. Broker should advise buyer, orally and with a reminder in writing, that there can be hidden charges and assessments associated with property ownership that are not disclosed on a title report or on the Seller Disclosure Statement. If buyer chooses to proceed with the sale in light of the risks associated with seller refusing to pay "charges and assessments" at or before closing, then buyer accepts those risks.
 
Broker should also advise buyer to seek legal counsel and advise buyer to contact the most likely sources of undisclosed "charges and assessments". Buyer may want to contact any HOA that has authority over the property, the local building department (particularly if the home is new or the property is unimproved), all utility providers and any other source that, in broker's experience, will generate "charges and assessments." Ultimately, this is a risk to buyers in a fast-paced seller's market. All that brokers can do is protect buyers, through disclosure and protect themselves, by retaining written proof of the disclosure. Printer-friendly Version

The Legal Hotline Lawyer does not represent Washington REALTORS or its members. To browse through our database of past Q & A's, visit www.warealtor.org. Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Please submit questions to legalhotline@warealtor.org or call (800) 562-6027. Please have your NRDS number ready when you call or e-mail the Hotline with your question.

 

Thank you, Corporate Sponsors!

   

 

 
 
Important Tax Provisions Still Available for 2016 Tax Year
(Source: Speaking of Real Estate) Although these provisions expired at the end of 2016, there is a misconception that they are unavailable to homeowners for the 2016 tax year. Both the mortgage debt cancellation provision and the mortgage insurance premium deduction are available to homeowners filing their 2016 taxes this year. [Read more...]
 

 
 
HUD Lowers FHA MIP by a Quarter Point
(Source: REALTOR Mag) Mortgage insurance premiums on FHA-backed loans will be lower by 25 basis points on loans endorsed starting January 27, the federal government announced today. “After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” Julian Castro, secretary of the U.S. Department of Housing and Urban Development, announced today. [Read more...]
 

 
REGISTER FOR HILL DAY!
Washington REALTORS® Legislative Day event is scheduled from January 18-19, 2017 here in Olympia. We are facing one of the toughest legislative sessions in history. Come represent fellow REALTORS®, learn the inside scoop on the industry, and help create positive change for your community … all in one day. [Read more...]
 

 
 
7 TIPS TO ROCK YOUR SOCIAL MEDIA STRATEGY IN 2017
(Source: Katie Lance) Can you believe that 2017 is right around the corner? I always love this time of year – in between the holidays and the New Year because it feels like such a great time to relax with family and also enjoy some quiet time in our business to reflect and plan for the year ahead. [Read more...]
 

 
 
THE CODE OF ETHICS DEADLINE HAS COME...AND GONE
All of our Code of Ethics webinars filled up fast last month, but we've scheduled two more for January (12th and 26th from 9:00AM-12:00PM. The National Association of REALTORS® also offers a FREE course for existing members (no clock hours awarded) or a Continuing Education option that awards three-credit hours and satisfies the mandatory COE training for $29.95. Knock out your COE training and get in compliance. [Read more...]
 

Primary Mortgage Rates Survey
(updated every Thursday)

 

(source:  Freddie Mac)
 
 
 
UPCOMING CLASSES
 
Regional Professional Standards
Thursday, January 12
8:30 AM to 4:30 PM  
7.5 CE Hours
Location: Olympia  

NAR Code of Ethics Webinar
Thursday, January 12, 2017
9:00 AM to 12:00 PM  
3.0 CE Hours
Location:  Live Webinar
 
NAR Code of Ethics Webinar
Thursday, January 26, 2017
9:00 AM to 12:00 PM  
3.0 CE Hours
Location:  Live Webinar   
 
Put a S.O.C. In It
Wednesday, February 8, 2017
8:30 AM to 4:30 PM  
7.5 CE Hours
Location:  Tacoma  

 

 
 
QUESTION from 1/7/2016 - As a listing agent, I receive Forms 35R with the buyer’s agent stating the problem but not asking for action. For example, “dryer vent is missing.” Or worse, Form 35R contains no language, just paragraph and section numbers referring to the inspection report. Please explain the best practices for brokers to employ in completing Form 35R, asking seller to make repairs.

  
ANSWER -  Form 35R, Section I, 4th check box says: "Buyer requests the following modifications and/or repairs. ... " This boiler plate language is followed by blank lines to be completed by buyer's broker, assisting buyer to make repair requests of seller. If seller agrees to buyer's request, seller checks a box stating: "Seller agrees to all of the modifications or repairs in Buyer's request for modification or repair." With those contract provisions, the parties enter a binding agreement in which seller agrees to modify the property according to the language drafted by broker on the blank lines of Section I. The language used by buyer's broker on those blank lines must create an obligation on seller, consistent with buyer's expectations. If this Section I provision of Form 35R is completed as described in the question, the contract provision will read as follows: "Buyer requests the following modifications and/or repairs. dryer vent is missing " or "Buyer requests the following modifications and/or repairs. Inspection Report Section III, #2 and 5" When broker re-reads "contract provisions" drafted by the broker, who is held to the standard of care of a lawyer, broker should ask him or herself, "if a court reads this provision, with my client asking the court to enforce the terms of the contract, what action will the court order, if any?" With this question in mind, consider the two illustrative Form 35R provisions. "Buyer requests the following modifications and/or repairs. dryer vent is missing" "Buyer requests the following modifications and/or repairs. Inspection Report Section III, #2 and 5" In neither contract provision, does seller agree to make any modifications or repairs. The boiler plate language lays the perfect foundation for buyer's request but the boiler plate language is followed by nonsensical words that have no meaning in the contract created between the parties. A court will not typically look beyond the four corners of the contract to determine the intent of the parties. Rather, the court looks to the plain language of the contract to determine the terms of agreement between the parties. In the first illustration, the parties agreed that a dryer vent is missing. There is no "action" for the court to order. Seller did not agree to take any affirmative action. In the second illustration, the words and numbers following the boiler plate language do not even form a thought so buyer and seller are not seemingly agreeing to anything. Again, there is nothing for the court to order the seller to do based on the contract language drafted by broker. When buyer's broker completes the blank lines following the fourth checkbox in section I of Form 35R, buyer's broker should state, explicitly, what buyer wants seller to do. For example, broker may write: Seller shall replace the missing dryer vent. If that language were used, and seller agreed, the contract would state: "Buyer requests the following modifications and/or repairs. Seller shall replace the missing dryer vent. Seller agrees to all of the modifications or repairs in Buyer's request for modification or repair." If a court is asked to enforce the contract, the court can easily determine, without reference to any other document, that seller "agreed" to "replace the missing dryer vent." Brokers are licensed to complete the blank lines in Form 35R and are held to the standard of care of a lawyer when doing so. Brokers often explain: "I don't want to mis-state the issue noted by the inspector, so that is why I cut and paste from the inspector's report or just reference the inspector's report." Fine. Notwithstanding, broker's language must create an obligation on seller. It is not enough to simply identify the problem. Based on broker's language, seller must agree to correct the identified problem. If broker is unable to draft language for the blank lines in Form 35R, then broker should work with broker's managing broker for assistance. The boiler plate language of Form 35 explains that any repairs seller agrees to make must be made in a commercially reasonable manner, at least three days prior to closing. Broker does not need to restate those requirements in the Form 35R language drafted by broker. 
 
(You will need your NRDS# & password to access the Legal Hotline)
 
The Legal Hotline Lawyer does not represent Washington REALTORS or its members. To browse through our database of past Q & A's, visit www.warealtor.org. Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the Week. Please submit questions to legalhotline@warealtor.org or call (800) 562-6027. Please have your NRDS number ready when you call or e-mail the Hotline with your question.