Might a landlord have extra liability if he rents out a property that includes a swimming pool? Most of us would probably answer yes, and we would be right. But just how far do the landlords duties extend? Well, how about a duty of care to protect the minor children of the tenants guests? The point is clearly made in a California case filed earlier this year. Johnson v. Prasad, Third Appellate District, Feb. 25, 2014
The Prasads purchased a home with a backyard swimming pool in 2000. The pool was built in 1976 or 1977. It complied with state and local ordinances at the time. Subsequently, California adopted the Swimming Pool Safety Act which requires a variety of pool safety measures; but it only applies to pools built or remodeled after January 1, 2007 The Prasads did nothing to change the pool. A six-foot fence prevented entry into the backyard. The only access from the house to the pool was through the kitchen. There was a sliding glass door with a security gate over it. The gate did not have a self-closing mechanism.
The property was managed by a Century 21 firm since 2009. In June of 2009 the property was rented. The lease called for the landlords to maintain the pool. The lease provided that the landlords or their service provider would have access for such maintenance purposes.
The tenants had a party on June 28, 2009. Among the guests were Andre Soucy, his four-year old son, Allen, and Allens grandmother and grandfather. There were a number of other people, including children.
According to the court record, "They all went in the pool. Eventually, everyone got out. The grandmother went inside the house and did not close the security gate or the sliding glass door behind her because others were still coming in. At some point, the grandmother lost track of Allen. As it turns out, Allen had gone outside the house to the backyard. When he was discovered, he was at the bottom of the pool."
Allen died. It was a tragic situation, indeed, and one that ultimately turned into a lawsuit. Allens mother filed a wrongful death suit alleging the grandmother and father were negligent in supervising Allen, the homeowners the Prasads were negligent in failing to properly fence the pool or otherwise protect a child from accidentally falling into the pool, and Century 21 was negligent in failing to ensure that the property met safety code. She did not sue the tenants.
The Prasads and Century 21 moved for summary judgment -- essentially, dismissal -- which the trial court granted. Among the things the court said, "the pool was not a nuisance or an unreasonably dangerous condition of the property"; "nothing these defendants did or failed to do created any type of dangerous condition or in any way contributed to this accident"; there was no evidence that it was more likely than not that the conduct of the [Prasads] and Century 21 was a cause in fact of the drowning; and "even the security gate and sliding door could not have been involved in this action since they were left open on purpose."
Case decided? No, the plaintiff appealed. And the Appellate Court disagreed with the trial court as to whether or not the landlords owed a duty of care to the child. The court noted that "In determining a dutys existence and scope" consideration of several factors is called for. The foreseeability of harm and the extent of the burden [to prevent it] "are ordinarily the crucial considerations.
The court reasoned that it was foreseeable to the landlords that children would be on the property and that "children would approach the pool, regardless of their capacity to swim, thus exposing themselves to the danger of drowning." The foreseeability of harm factor was there.
The Appellate Court also noted that the defendants did not violate the Swimming Pool Safety Act. Nonetheless, the Court also said, "the existence of this statute informs the extent of burden to the homeowners [Prasads] and consequences to the community of imposing a duty to exercise care with resulting liability for breach." Hence, the court seemed to reason, even though the law did not require that the landlords comply with the act i.e. adding safety features, its very existence suggests that they might have a duty to do so.
Having established in its own mind that the landlords did have a duty of care to the child, the court then turned to the question of whether that duty was breached. That, the Appellate Court said, was a matter for a jury to decide. "A jury could conclude a reasonably prudent homeowner should have taken further precautions because it was foreseeable that a child could still access the pool and could drown or be injured. Or it could decide the opposite. Where reasonable minds could differ, it was error for the trial court to decide that question as a matter of law."
So, the case against the landlords has been sent back to trial.
As to Century 21, the Appellate Court upheld the trial courts ruling. Century 21 could not have been negligent in failing to determine that the premises met safety code, because the only safety code at issue exempted those premises. At least that part of the Appellate ruling made sense.
Bob Hunt is a director of the California Association of Realtors. He is the author of Real Estate the Ethical Way.
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Lenders want to give you a mortgage, but they also want to minimize their own risk. The easiest way to retard risk is for them to use your credit scores to make their lending decisions.
Credit scores are compiled separately by three consumer reporting agencies -- Equifax, Experian, and Trans Union. These credit reporting bureaus calculate scores differently, based on formulas and criterias of their own devices.
Equifax Beacon 5.0 Facta: scores range from 334 to 818.
Experian Fair Isaac V2: scores range from 320 to 844.
Trans Union FICO Risk score >
Your credit score is a number that reflects the information in your credit report based on whether you pay your bills on time, how much you owe creditors, accounts youve paid off, and derogatory information such as unpaid bills, late payments, judgments and liens. It also includes inquiries into your accounts from lenders, landlords, and employers.
When you apply for a home loan, your application includes giving your lender permission to "pull your credit" and decide whether to lend to you and the rate of interest on the information contained in your credit scores. The higher the score, the better terms youll receive from the lender.
Once your credit scores are reviewed by your mortgage lender, youll receive a computer-generated report of the findings, but it wont have a copy of your entire credit report. It may include key factors that adversely affected your scores. Some examples might include:
Too many inquiries in the last 12 months
Time since most recent account opening is too short
Proportion of loan balances to loan amounts is too high
Too many accounts with balances
Amount owed on revolving accounts is too high
What if youre declined for the loan, or your lender wants to charge a higher interest rate than you were expecting? Is there anything you can do?
Yes, talk to your lender and ask for help repairing or correcting your scores. For example, you may have innocently done something that resulted in a negative score, such as closing a line of credit. Or, you may not have realized that a late payment would bring your score down as much as it has. The lender will tell you exactly what you need to do to raise your scores.
Under federal law, you have the right to obtain a free copy of your credit report from each of the national consumer credit reporting agencies. Go to FreeAnnualReport.com.
If you find an error -- derogatory data that doesnt belong to you, or an account that shows the wrong balance, simply show the lender your canceled check, >
Youll also have to correct the information yourself separately and in writing with each agency. It may take a few weeks for the agencies to record the updated information.
In the meantime, work with your lender and do what he/she tells you to do to get the best rate, including paying more than the minimums, paying on time, and making sure that your debt-to-income ratios are well within your ability to repay all your loans.
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Question: My wife and I want to buy a condominium now, especially since interest rates are so low. We need approximately 40,000 for the earnest money deposit, which is ten percent of the purchase price. My parents are prepared to lend us this money, but they will have to take it out of their Individual Retirement Account. Mom is 54 and Dad is 56. Can they do this?
Answer: Yes, with a large number of restrictions. The general rule is that if you have not reached the age of 59 , you must pay a ten percent penalty on any distribution from your IRA. This is in addition to the regular income tax you have to pay on that amount. This is referred to as "early distributions".
However, there are a number of exceptions, such as if you are disabled, you have unreimbursed medical expenses that are more than 7.5 percent of your adjusted gross income, or the distribution is used to buy, build or rebuild a first home.
Lets look at this last exception carefully. First, the buyers must be "first-time" homebuyers. According to the IRS, you cannot have a "present interest in a main home during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy, build or rebuild." Since your son is married, his wife must also meet this no-ownership requirement. And the home to be purchased cannot be for investment purposes; it must be the principal home -- which the IRS calls "the main home".
When is the "date of acquisition"? It is either the date of which you enter into a legally binding real estate contract to buy the property or the date on which the building or rebuilding begins.
You can use your parents money for the deposit on the contract, or for any usual and reasonable settlement, financing or other closing costs. However, any moneys your parents take out above 10,000 will be taxed twice -- first as ordinary income and second with the 10 percent penalty.
There are more restrictions: the moneys must be used by you no more than 120 days after the funds are withdrawn from the IRA. Your parents can agree to lend you these funds at any time, but once the funds are withdrawn, you must sign that sales contract and use the funds within the 120-day time limit.
And if you have brothers or sisters, they should understand that once your parents have used up the 10,000, any additional funds withdrawn from the IRA will generate the 10 percent tax. This is a lifetime cap. However, if both of your parents have separate IRAs, they can each give you up to 10,000 without having the pay the penalty. They will, however, have to pay ordinary income tax on these withdrawals.
What if your parents have a ROTH IRA? If that IRA has been in existence for at least five years, and meets the requirements spelled out above for regular IRAs, there will be no 10 percent penalty and no income tax due on the first 10,000. Above that, there is a complicated "Ordering Rules", and you should consult your own pension plan trustee or advisor for specifics.
This discussion involved parents assisting their children. But the law is not limited exclusively to parents. According to the IRS, to qualify for treatment as a first-time homebuyer distribution, the funds can be used to pay the costs for a main home for any of the following: "yourself, your spouse, your or your spouses child, your or your spouses grandchild, your or your spouses parents or other ancestor."
For additional information, the IRS has Publication 590, "Individual Retirement Arrangements IRAs", available on the web by Clicking Here.
But before you pursue the IRA route, you should discuss this with your mortgage lender. In todays economy, even though interest rates are at an all-time low, it is very difficult to get loan approval. Your lender may want your parents to gift you the deposit moneys, instead of lending it to you. Your lender may also want to make sure that some of your own money is being used for the purchase.
According to Craig Strent, CEO of Apex Home Loans in Rockville, Maryland, "at 90 with none of the buyers own money into the transaction, FHA would be the best option for the kids. If they were getting an 80 percent loan to value, with all funds gifted, they could go conventional."
"Its important for the kids to document where the earnest money deposit came from," Strent added. "The parents will have to show a copy of their bank statement along with proof of the funds leaving their account and going into the buyers account. Many people find this intrusive, but it is a required step to verify that the funds were indeed a gift, and not some internal arrangement to circumvent the underwriting requirements."
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From marketing the event to staging the home, hosting a successful open house can be tricky. Be too specific like targeting only first-time home buyers and you risk missing a whole slew of potential leads. But be too broad like not doing anything to set the property or yourself apart might prove disastrous as well. One thing thats a safe bet is making the entire experience as smooth and simple for each guest as possible. If being tech savvy is part of your selling strategy and it should be, use these tips to integrate an iPad into your property showing:
Streamline the Sign-in Process
Having guests sign in at an open house not only makes follow up easier, but its also a great way to collect leads. Even if buyers arent interested in the property youre showing, they might be interested in something else nearby. But just setting out a paper and pen near the front door wont do. Guests may either only include ir>
Instead of lugging around a camera and juggling it with your smartphone in one hand and a folder full of pamphlets in the other, leave it all behind. You can upgrade your photography skills while downsizing on equipment. Before the open house, use an app like Camera to control the exposure, digitally zoom and experiment with effects in order to improve your listing photos. While showing the home, snap a few shots to post to social media and create some buzz around the event. This works especially well if youre hosting a two-part open house as you can use photos to advertise for your next showing.
Have Resources at Your Fingertips
It may be easy enough to whip out your phone and do a quick Google search when guests have a specific questions, but why not up your game and plan ahead? At the open house, prospective buyers will likely want to know more about the neighborhood, nearby schools, crime stats and more. With a bit of planning, you can have this information pulled up and easy to access with just the touch of the screen. Consider using a map app to highlight noteworthy areas of the neighborhood. Use Pinterest to display information about specific homes. Not only will this help you connect with tech-savvy buyers, but itll make your listings more interactive. Consider gathering websites and resources visitors asked about and including them in the listing follow-up or an upcoming newsletter. Or, with the photos and videos youve taken and resources youve gathered, you could centralize the information and use it to host a virtual open house for prospects who are out of state or otherwise unable to attend.
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Its only natural to make the home you bought more comfortable and functional for your household. But before you put in a hot tub or convert the garage into a bedroom, think about whether or not these improvements will add or subtract perceived value from your home someday.
Even though selling your home could be years away, keep in mind that not all home improvements are welcome to buyers. When buyers are ready to buy, they tour multiple homes which can be confusing. So, they distinguish what theyve seen by features like "the one with the gorgeous kitchen," or "the one with the ugly pink tiled bathroom." You dont want your home to be the one they make fun of.
Here are just a few items that buyers dont appreciate:
1. Outdated finishes. It doesnt matter if you paint your walls the most fashionable colors if buyers look up and see popcorn ceilings and wobbly ceiling fans. If youre going to improve a room, update everything, even the light switches. Be particularly careful with wallpaper which is very personal and can be polarizing to buyers. And carpet? Most buyers want wood floors today.
2. Awkward spaces. Youve seen the commercial where the family remodels the kitchen and borrows space from the college-age sons bedroom, turning his room into little more than a closet. Knock out or move walls where you need to, but not at the expense of other rooms.
3. Conversions. Beware of changing the original function of a room. Decking out the dining room as a media room may make sense for your family, but where will your buyers serve dinner? And while were on the subject, converting studies into bedrooms doesnt work. Without closets and adjoining baths, they arent really bedrooms.
4. Bad add-ons. If theres anything worse than not having enough space, its adding on space that looks stuck to the original house with glue. If youre going to add on to your home, make sure it looks as seamless as possible, with the same quality finishes and floors.
5. Expensive-to-maintain luxuries. Swimming pools, koi ponds, fountains and putting greens can make backyards a paradise, but theyre costly to keep up. Installing lush landscaping that has to be pruned constantly to keep its shape is a great hobby, but for future buyers, less is more. Its great to have hobbies, but make sure you can take them with you when you move.
So go ahead and paint your den after your favorite football teams colors like orange and purple, but when it comes time to sell, prepare your home for the next buyer. Put it in pristine clean condition, and restore paints and finishes to attractive neutral shades. And keep this mantra in mind: If its expensive to add or install, the buyer could see it as expensive to remove.
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Its that season where you want to celebrate the coming holidays with a grandiose display of ghouls and goblins followed by pumpkins and wreaths and hand-traced kindergarten turkeys glued on paper plates and then, of course, garland and lights and ornaments hanging from everything and inflatables and a giant incredible tree. We get it. A visible display of festivity is our idea of holiday happiness too.
But going overboard while your home is for sale can actually keep it from selling. And theres nothing festive about that.
"Remember that buyers looking at houses during the holidays are generally ready to buy," said REALTOR Barbara Altieri.
Heres how to strike the right balance.
1. Dont overdue the dcor.
You want buyers to see your house, not all the stuff youve piled on in celebration of the holidays. But that doesnt mean you have to go bare.
"The less-is-more mantra of home staging may tempt you to forgo holiday cheer this year. But a few subtle touches like a pinecone centerpiece, an evergreen wreath or a pot of cider simmering on the stove can create a warm and festive feeling in your home," said Front Door.
2. Dont overdo the gore.
Gooey brains or severed limbs might be funny on Halloween night, but not so much when people are arriving for an open house.
3. Use some common sense.
You dont want to turn your house into an Ebola wasteland under any circumstances too soon, too sad, too gross. But if youre selling you house you want to be extra careful to keep your head and steer clear of anything that might be deemed controversial.
4. Ixnay on the iderspay.
Translation for those who arent up on their Pig Latin: Nix the spiders. Yes, theyre plastic. Yes, theyre funny. But anything that could make a potential buyer wince or cringe is not something you want hanging around your home.
5. Keep it secular.
"Avoid overtly >
6. Dont create a tripping hazard.
Walkways lined with pumpkins or candy canes are festive. But if theyre not tucked away so as to keep from impeding access, they could be a danger to visitors. The last thing you need is a lawsuit while youre trying to sell your home or anytime for that matter.
7. Dont hide your homes best assets.
"There is a time and place for everything and decorating your house that is for sale with a little too much spirit is distracting to say the least," said Altieri.
Its true. Too much holiday clutter can mask your homes best qualitiesinside and out. If there is so much outdoor dcor that potential buyers cant get a feel for your curb appeal, think about paring it down and only using a few of your favorite items - at least until your home is in escrow.
Inside, beware of covering every inch of your fireplace mantle, and, instead, showcase it with a few holiday items. Remember that you can highlight important areas of the home with a stylish vignette of fall dcor, a tray of holiday cookies, and a well-placed Christmas tree.
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In recent years, reserve planning has become a long overdue reality for many older homeowner associations. The boom and bust mentality of deferred maintenance and special assessments has finally been replaced with proper long range planning and funding. For all of them, that meant accumulation of hundreds of thousands of dollars and for some, millions.
With the reserve fund growth comes the need for better reserve fund management also known as good stewardship. With wise stewardship, member contributions are substantially reduced due to the miracle of compound interest. With properly applied investment principles, even a condominium of 50 units can generate several hundred thousand dollars in interest earnings over a 30 year projection period. This means that the members will need to contribute that much less out of their pockets. Good news indeed.
The board of directors has a fiduciary responsibility to make sure reserve funds are invested properly and safely. The board should not invest in anything that a prudent person would consider risky unless there is a broad consensus among the members that doing so is okay better get that in writing. The investment strategy should also ensure that funds are available when needed.
To refine and define the HOAs reserve obligations, a written Reserves Funding amp; Investment Policy is extremely important. That policy holds both current and future boards to a standard of accountability and helps prevent the Board from using reserves like a private piggy bank.
A good Reserve Plan puts the funding issue in proper perspective. While, say, 50,000 or more may seem to be a lot of money to an individual, its a pittance to an HOA when it comes to paying for major repairs and replacements like roofing, painting, siding and paving. Most reserve plans call for the accumulation of hundreds of thousands or millions of dollars. Even though the fund size seem large, it is ra>
When the Reserve Study is funded properly, more money will result Oh Joy but with that money comes the responsibility to invest it wisely. A Reserve Funding amp; Investment Policy will provide the philosophy but its up to the Board to see that the philosophy is implemented. The larger the fund, the greater the need for investment expertise. While your banker will doubtless have some convenient options, that convenience may be very costly since it can come with a below market rate of return.
A trained investments consultant can be hired to manage the reserve funds and maximize yields through safe and insured investments. If your reserve funds are substantial, this is a wise and profitable move. The added investment return will more than pay for the cost of the consultant.
Investment yield is directly >
Fiduciary responsibility requires that directors handle reserves responsibility. When it comes to investing there are three considerations: safety, liquidity and yield.
Safety can be broken down into two categories: safety of income and safety of principal. Safety of income measures the likelihood that anticipated income from an investment will continue to be paid in the amount expected and at the time expected. Safety of principal refers to whether the principal value of the investment available at the outset will be available at maturity. Both categories of safety can vary in degree with specific investments.
Liquidity refers to investments that can be converted quickly into cash. Homeowner associations need a certain amount of liquid funds because major repairs can happen unexpectedly. However, with a proper Reserve Study, most repair events can be accurately predicted years in advance. If the repair schedule indicates 95 of reserves wont be needed for three years, those funds can be obligated for at least two years with little fear of being caught short.
Yield is simply the return received on the investment. Generally, the longer the maturity period, the higher the yield. So, a three year CD yields more than a one year CD. Also, the safer the investment, the lower the yield.
A well planned reserves investment policy factors safety, liquidity and yield into the mix. These are the basics of good stewardship. When the reserves are funded according to a 100 funding philosophy coupled with these basics, the HOA will find a firm financial foundation for the future.
For more innovative homeowner association management strategies, subscribe to www.Regenesis.net.
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From marketing the event to staging the home, hosting a successful open house can be tricky....
> Full Story
Its only natural to make the home you bought more comfortable and functional for your househ...
> Full Story
Its that season where you want to celebrate the coming holidays with a grandiose display of ...
> Full Story