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Updated: Thursday, August 27, 2015


Dont Fight The Home Inspection

Question: We are selling our house and have just received an offer to purchase. The offer contains a contingency for the buyer to obtain a home inspection report.

The buyer is asking for a general inspection contingency, but our real estate broker is advising us to use the specific inspection contingency. Can you explain the difference and give us some assistance?

Answer: In my opinion, it is imperative for a homebuyer to obtain a home inspection after the contract for sale is signed by all parties. Buyers often purchase real estate based on emotions rather than facts, and a good home inspection is important to satisfy the purchaser that the property is substantially in sound condition.

A buyer should always include in a sales contract a contingency to the effect that the contract is contingent on the purchaser obtaining, at purchasers expense, a satisfactory home inspection within three or five business days after the real estate contract is ratified.

Sellers may think, at first blush, that an inspection is not in their best interests. However, if the seller stops and thinks about it for a moment, it becomes very clear that even from the sellers point of view, it is advisable to let the buyers have a short contingency to back out of the contract if they are not satisfied with the condition of the house.

I would rather have a purchaser back away early in the process than wait until the very last minute and raise all sorts of problems and concerns on the day of settlement.

Of equal importance, if the purchaser has obtained a satisfactory home inspection report, that same purchaser will be hard-pressed to raise issues about the condition of the house on the day of settlement -- or even later. Often, I have heard sellers tell buyers "you removed the home inspection contingency, and if you have a problem with our house, look to your own home inspector."

As you have indicated, there are two basic inspection contingency forms used in the Washington metropolitan area -- both of which are equally applicable for all real estate transactions. The first is known as a general contingency, which gives the buyers the absolute right to back out, if, for any reason whatsoever, they are dissatisfied with the inspection report. In practical terms, however, buyers often tell sellers that the contingency will be removed if the seller makes certain repairs.

The other contingency is known as the "specific contingency," which works likes this: After the buyer has completed the inspection, the buyer must submit a list of items to be repaired or corrected to the seller. The seller has three days to advise the buyer whether they will do any or all of the items on the list. The buyer then has one additional day after receiving the sellers response in which to determine whether to buy the property or to declare the contract null and void.

Obviously, from a buyers point of view, the general contingency is much preferred. Basically, the buyer can walk away from the house for any reason whatsoever. On the other hand, the specific contingency is clearly much better for the seller, since it narrows down the issues, and gives the seller the opportunity to correct certain defects, rather than lose the buyer.

Needless to say, from your point of view as the seller, the specific contingency is in your best interests. However, from a psychological and a marketing point of view, if the buyers are demanding the general contingency, they might be suspect as to why you are insisting on the specific contingency. Keep in mind, your buyer does not know the house at all, and if they feel you are trying to hide something from them, they may become very hesitant to go forward with the purchase of your property.

My own suggestion is to >

You have indicated, however, that there is no time limitation on the contingency. This is not acceptable. If you do not have any time limitation, then the buyer literally can back away from the sale on the date of settlement by producing an inspection report that is unsatisfactory. You should limit the inspection contingency to a period not to exceed three or five days after the sales contract is signed.

You should also insist, however, as a seller, to obtain a copy of the entire inspection report, whether or not the buyer raises any objections based on that report. After all, if the buyer raises problems later at the settlement table -- or even months after taking title, it would be very helpful to have a copy of that report in your possession.


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Importance of HOA Contracts

Each year, thousands of homeowner associations across the country engage in complicated renovation projects that run the gamut from siding replacement to roof overhauls to dryrot repair to new decks and fences. Aside from the complexity of the tasks themselves, all need a carefully crafted construction contract that not only describes the scope of work and price but includes the fine print.

Contractors typically present contracts that address whats most important to them: the money. The scope of work described is usually very general, like "paint buildings". The contract ra>

Similarly, take advantage of other knowledgeable consultants for complex and costly projects. While they arent free, they are generally worth their weight in gold in making sure the work gets done right. They can often steer you to >

Below is a list of contract clauses that should be included. Simply attach them as an addendum to your contractors contract and make them a condition of acceptance. You should have a knowledgeable attorney review the contract as well.

  • Names and business addresses of the parties.
  • Date that the contract is signed.
  • A short narrative that summarizes the agreement. For example, "Nottacare Condominiums is hiring I.M Manly Contractors to remove the old siding and install new siding on Buildings A-D followed by a total repaint of all buildings. see Scope of Work for specifics"
  • Obligations of Each Party: For example, the Contractor agrees to provide the labor and material to complete the scope of work attached in a timely and professional manner. All changes or additions must be approved in writing by the HOA President. The HOA is obligated to pay the Contractor in four progress payments within seven days of billing.
  • Deadline for Performance. This clause usually includes the phrase, "Time is of the essence" to imply that work must be completed barring only unforeseen circumstances like material delay or weather. Working six different jobs at the same time is not a valid excuse for delay.
  • Time Effectivity of the Contract.
  • The Cost of the Work and Materials. This could either be a set price or an hourly labor rate with material at, say, cost plus 10.
  • Payment Schedule. Is it due on completion or in installments?
  • Late Payment Penalties. Can interest be charged?
  • Warranties. These come in two forms, material and labor. Material warranties come from the manufacturer and are subject to proper installation. That means that even though the material warranty is, say, 20 years, improper installation will void the warranty. Labor warranties are offered by the installation contractor and are usually >
  • Terminating the Contract. Define under what condition either or both parties could terminate the contract. Breach of contract can be enforced by either. There should also be a mutual agreement clause to terminate.
  • Arbitration or Dispute Mediation. If there is a problem that cannot be worked out, its usually in both partys interest to have a trained mediator help sort it out rather than engaging dueling lawyers.
  • Paying Attorney Fees. If the matter lands in court, the prevailing party should be entitled to payment of attorney fees and legal costs.
  • While the fine print seems cumbersome and unnecessary, these clauses ensure either performance or consequences for failure to perform.

    For more innovative homeowner association management strategies, subscribe to www.Regenesis.net


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    6 Imperative Mistakes to Avoid When Decluttering Your Home

    If youre getting ready to move or sell your home, clutter is your worst enemy. It makes packing a nightmare, and finding the one item you need could take an extra 15 minutes to more than an hour. Decluttering is a great way to get rid of the things you dont need before moving or preparing your house for a walkthrough. But you need to avoid some of the common mistakes that come with this seemingly daunting job. Here are some of the roadblocks you could run into and how to handle them:

    1 Laziness or procrastination.

    If you dont feel like decluttering your house will achieve significant results or make your house feel cleaner, then youre not going to do it effectively. At the same time, if you drag your feet, it may take weeks to get the job done. Have a set goal in mind and stick to it when starting this project, especially if you plan to do the entire house. If you need someone to help or keep you on track, you can hire a home organizer to set a schedule and make the process more manageable.

    2 Tackling too much at once.

    You cant organize the entire house in a day. Its simply not doable. And it will sound far too overwhelming from the start, deterring you from ever finishing. Spend just a few hours each day decluttering, tackling one room at a time. If thats too much to do, start with one closet or a few drawers and work your way up. Remember, you will always have a bigger mess before you have something more manageable. If you make a mess of your entire house, you may never regain the energy or desire to go back to the project. For more tips on how to organize your home quickly and easily, check out this post from HuffPost Homes.

    3 Not having an organization plan.

    Once you start pulling items from your closets, drawers and other parts of your room, you need to have an organization plan in place. You dont want to throw everything into one big pile -- that creates another mess to sort through later. Instead, tackle it strategically by putting each item into a dedicated pile: donate, sell or throw away. That way, youll know where it goes and how to handle it once the room is completely decluttered.

    4 Letting emotions do the talking.

    You may be tempted to keep certain items because of their sentimental worth -- they were a present, belonged to a family member, have old memories attached, etc. -- but oftentimes the pieces we hold onto are of no use. You shouldnt keep pointless items just for emotions sake, unless the emotions are so overwhelming that you simply cant help yourself. Old toys, pieces of clothing, shoes -- these are better off at secondhand stores or in the trash. Yes, there will be pieces of jewelry or photos to keep, but be choosy.

    5 Getting rid of things.

    Once everything is organized and out of the room, take the next step. Dont let the garbage, donation items or garage sale pieces just sit around. You need to drive them down to the secondhand store or landfill. If you need to sell stuff, arrange a garage sale for the following weekend. Waiting until the opportune moment to finalize your decluttering could lead to more piles, which means more hassle for you.

    6 Waiting too long to declutter again.

    Once youve decluttered every room -- whether in preparation to move or sell your home -- dont get too >

    Andrea Davis is the editor for HomeAdvisor, which helps homeowners find home improvement professionals in their area at no charge to ensure the best service in the shortest amount of time.

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    Home Sellers Advice: List It or SIY?

    There are pros and cons to doing anything yourself. You weigh factors such as your expertise, the enjoyment of doing a certain task, and the cost savings of doing it yourself DIY vs. hiring a professional.

    Are for-sale-by-owners successful? The answers may lie in research from the National Association of REALTORS. According to the most recent Profile of Home Buyers and Sellers, the share of home sellers or SIYs who sold their home without the assistance of a real estate agent was only nine percent.

    Most SIY sellers dont do anything to market their homes, whereas most real estate professionals advertise listings on multiple listing services and through other means. This could be a real disadvantage for SIY sellers because 92 percent of buyers use the Internet to shop for a home and half use mobile applications on their phones to look at listings.

    So where do SIYs get buyers? Not from testing the open market. Forty-four percent of FSBO sellers knew the buyer prior to home purchase, and about 15 percent of SIY sellers were approached directly by buyers.

    This results in a lower median selling price for FSBOs than listed homes, 208,700 compared to 235,000. That means the typical listed home -- a home listed professionally with a real estate agent - sells for 13 percent more than a FSBO.

    The number one reason why SIY sellers dont want to list their homes is real estate fees which can typically range from five to seven percent of the transaction. But, by not testing their homes in the open market theyre losing more money than the fees.

    Significantly, more buyers are using sales professionals to help them find and buy their homes. In 2001, 69 percent of buyers used the services of a real estate professional. By 2011, that number had risen to nine out of 10 and remains true today. So if youre planning to sell your home yourself, you may be dealing with a professional agent instead of the buyer across the table.

    As a seller you should realize that buyers have changed. Todays buyers are older, more savvy, and have better credit than in the past. The typical first-time buyer is 31 years of age, while repeat buyers are 53.

    They expect to occupy their homes for approximately 12 years, so they plan to buy very carefully. In fact, more than half of buyers said finding the right home was the most difficult part of buying a home. The fact that youre an experienced homeowner may not be as big an advantage as it once would have been.

    Last, SIY sellers miss the advantages of having their own agents. When you SIY, you have to do everything the real estate agent would do -- show the home, negotiate, advertise, and keep the transaction moving forward.

    Those are just a few things to consider as you decide whether to list it or SIY.


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    8 Overrated Interior Design Trends

    Trends come and go, and while everyone wants to be on the forefront, with a home that showcases the latest, greatest, hottest and chicest stuff, not all trends are created equal. And not all are meant for everyone.

    Get vertigo from busy patterns? Perhaps you want to stay away from that herringbone backsplash. And while were in the kitchen, lets talk about those counters

    1. Marble Counters

    Those Carrarra marble counters sure look purdy on TV. In real life, they dont look so hot with red wine rings and etched areas where the polish has worn off. Porous marble is notoriously hard to take care of, with staining and scratching a high probability unless your OCD is on constant high alert. A sealer can help, said Houzz, but it wont turn marble into easy-care quartz.

    "A sealer wont protect your marble completely, but it will buy you some time if youve left an acidic substance on your surface that wasnt wiped up right away," they said

    If you really want the look of marble but with a lower-maintenance material, try the aforementioned quartz. Its non porous, doesnt scratch, and there are versions that can get you close to the look of the real thing.


    Roomology

    2. Stainless steel apron-front sinks

    Farmhouse sinks continue to grace stylish kitchens, with stainless steel often the material of choice to continue a modern aesthetic. But stainless steel is easily smudged and scratched. If you have kids, dogs, or both, or are simply not looking forward to the care involved in keeping this looking good, perhaps a vertical slab of stainless steel in such a vulnerable spot isnt the right option for you.

    3. Wallpaper

    Ever helped someone scrape old wallpaper off the walls of their home? Even if youve only seen it on HGTV, you have an idea of how tedious it is. If youre planning to use a particularly bold or graphic print on your walls, take a step back and consider this: Do you want to be the guy on a ladder scraping off inches of wallpaper at a time from this room in a few years when you tire of this pattern you mistakenly covered every inch of this room in?


    Pinkbluebaby

    If the answer is no, perhaps a stencil, peel-and-stick wall covering, or a targeted area instead of a whole room is a better option.

    4. Dark wood floors

    Yes, they look sleek. But dark wood floors are the black cars of interior design. Ten seconds after youre done cleaning them, they look filthy again. Unless you have a home that self vacuums continuously, you might want to embrace a lighter shade. Might we recommend something that better resembles the color of your backyard dirt?

    5. White upholstery

    Dog hair. Fruit punch. Cocktail sauce. Muddy backyard. Bronzer. Crayon. Mustard. Those are just the first seven things that came to mind when we thought about what would end up all over our white couch.

    There are, apparently, people who love their white upholstery and who will put that giant alabaster sectional right in the middle of the living room or flank their dining room table with six snow-colored captain chairs, and to them, we ask: You dont really let anyone sit there, right?

    6. Pergolas

    What is the point of a patio cover? To be covered, right? Unless you can somehow figure out a way to position your face under one of the narrow slats that comprise a pergola, youre not going to get much shade. If you really want some shelter, go for a gazebo or fully roofed patio cover instead.


    TnT Builders

    7. Rain showerhead

    While rain showerheads may seem romantic visions of tropical getaways, anyone?, only part of the population believes that. Women dont like rain showerheads, and you want to know why? Our hair. And our face.

    That means:

  • The expensive blowout we just got was a huge waste of money;
  • We now have to spend more time blow-drying our hair because it got soaked;
  • Getting ready from here on out will take considerably longer because theres no longer such a thing as a quick rinse;
  • We will emerge from the shower looking like a raccoon and we will need extra time to remedy that situation.
  • Hundreds of gallons of water pouring down directly on our head is not >

    8. Getting rid of the bathtub

    Theres a growing trend among bathroom remodelers, many of whom are opting to ditch the bathtub and go with a large walk-in shower if space is an issue. Removing a bathtub when its the only one in the house or on the floor is not recommendedespecially if you have kids or are in a neighborhood filled with young families. It could not only have a negative impact on your life>
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    Why Your Gutters Deserve Some TLC

    Gutters should be an important consideration when it comes to purchasing a new home because of the expense it can cost you down the line, however, the function of gutters is often overlooked.

    Gutters serve two main purposes: to make sure water does not gather on your roof and to make sure water is diverted away from your home. Disregarding the importance of gutters and gutter maintenance can lead to serious and costly damages. See what type of home issues arise when you neglect your gutter system:

    Foundation Damage: When water accumulates at the base of your home, it can cause foundation and structural damage that can be serious. As water runs against your foundation for long periods of time, cracks will begin to form and, more seriously, your foundation may begin to crumble. Additionally, your basement will begin to flood as cracks allow water to seep into your home. Foundation issues are not only serious, but costly, as homeowners most likely have to pay thousands of dollars in damage.

    Roof Repairs: When gutters are clogged with debris, water has nowhere to go, and it will begin to accumulate on your roof. When neglected long enough, water accumulation can contribute to surface decay and fungi. Traces of algae can weaken the shingles of your roof, causing leaks that range from minor to serious. You may be able to remove algae with an afternoon of low-pressure washing, however, extensive buildup of fungi will most likely require a professional roofing team to clean it. Dismissing clogged gutters may lead to the purchase of a new roof, which can easily cost thousands of dollars.

    Mold Growth: Clogged gutters will not only contribute to mold and algae growth on the exterior of your home, but the interior, too As water seeps into the inside of your home, mold can develop, raising health concerns for you and your family. Harmful micro-organisms can cause serious damage and lead to a variety of health symptoms such as throat irritation, nasal congestion, eye complications, coughing, and skin conditions. Mold is difficult to deal with and depending on your situation, a professional may need to take care of it.

    Landscape Erosion: Clogged gutters will lead to overflowing water which will land on flower beds, small trees, and shrubs, ruining all of your landscaping efforts. This type of water runoff creates pools and puddles of stagnant water that will attract mosquitoes and other wildlife. Additionally, stagnant water around your foundation will cause your landscape to erode.

    Soffit and Fascia Rotting: Your soffits and fascia are the closest part of your home to your gutters. When gutters are clogged, water will collect in your gutters and seep into your soffit and fascia board. With nowhere to go, the water will begin to rot out your fascia and soffit, causing your gutters to pull away from your home and eventually fall.

    Guarding your Gutter

    Gutter cleaning is still a temporary solution to a recurring problem. As an alternative solution to gutter cleaning, gutter guards are a worthy home investment since they prevent costly damages that are associated with clogged gutters.

    It is important to take into consideration that not all gutter guards are created equal. Some gutter covers, like reverse curve gutter guards, feature a large opening on the front side of the gutter. This allows smaller debris to enter and clog your gutters. In fact, homeowners will most likely need to remove a reverse curve gutter guard system in order to clean their gutters twice a year.

    Alternatively, a micromesh gutter protection system, like LeafFilter, features small openings that prevents all types of debris like pine needles, seed pods, and helicopters from entering gutters. Additionally, when shopping, it is also important to read gutter guard reviews and understand the companys warranty before installation.

    The addition of a gutter protection system can eliminate gutter cleaning from your home maintenance checklist and prevent damages that are caused by clogged gutters.

    Article contributed by LeafFilter. LeafFilter is a micro mesh gutter guard that attaches to your existing gutters and provides you with clog free gutters for the life of your home.

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    Five Ways Bargain-hunting Can Backfire On Home Buyers

    Its natural to want to save money when youre making a purchase as large as a home. You want to buy the best home in the best neighborhood at the best price, and you may think the only way to accomplish your goals is to look for bargains. So instead of hiring a real estate agent, you scour the market for FSBOs, short sales, foreclosures, or homes that have been on the Internet too long.

    While youre bargain-hunting, here are five things you should keep in mind:

    Lowballing sellers doesnt work.

    They dont waste time with low-ball offers that they find insulting. Just as you want the home you buy to appreciate in value, sellers purchased their homes as investments, too. They want to net as much as possible, because they took a financial risk and had the foresight to buy the home they chose.

    This sense of entitlement -- that homes should only be sold at a profit - may cause them to overprice their homes or be less willing to negotiate. Youll feel the same way when it comes time for you to sell your home, so make your offer reasonably and respectfully. Show the comparables that led you to make the offer. Be open to compromise.

    Other buyers are getting professional help.

    Ninety percent of buyers use a real estate agent while youre spinning your wheels driving around neighborhoods and calling FSBO sellers who arent home to take your call. Soon, youll notice that the homes youre watching are going under contract with other buyers.

    True bargains are rare.

    Sometimes a distressed home will impact the prices of the other homes because they typically sell at a discount of 17 percent, according to the National Association of Realtors. The other sellers may discount their homes somewhat, but if theyre not in distress, dont expect them to negotiate as if they are. A bank foreclosure or bank-approved short sale could take months to close.

    If a home has been on the market for a long time without a price reduction, theres usually a good reason. You have an unmotivated, unrealistic, or upside-down seller, any of which could waste your time without resulting in a purchase. Move on to a deal that you can actually make.

    The home needs work.

    Sometimes a home will be marketed "as is," which suggests that it needs a lot of work. Or, a home may be well maintained, but its so out of date it looks like a vintage sit-com set. You could be looking at a money pit.

    Are you willing to perform the work or pay someone else to do the work? Before you buy, get a home inspection and then get bids from contractors who can help you bring the home up to todays standards. If the purchase price and repairs come to approximately the same price as an updated home in the same area, then go for it.

    Its not a bargain if it doesnt suit your needs.

    A home is a good buy only if it suits your familys needs for space, features, comfort, and function. If you buy a home without enough bedrooms or baths, youll pay more in transaction costs to sell the home and buy another thats more suitable. Choose wisely in the first place because it takes time to build equity. Your home should meet your needs for a long time.


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    Are Backyard Chickens Legal in Canadian Cities?

    Calgarys city council just voted to ban them. Toronto doesnt allow them either, forcing some homeowners to hide them in basements and garages and hope their neighbors dont turn them in. But in Vancouver, Montreal, Victoria, Kingston, Ont. and many other communities, they are welcomed and hailed as a way to contribute to a sustainable and healthy food system.

    Were talking about chickens coming home to roost in Canadas urban areas.

    "Did you know that eggs from hens raised on pasture compared to factory-farmed hens contain more of the good stuff and less of the bad stuff?" says the owner of TorontoChickens.com , who says she must remain anonymous because she is keeping backyard chickens illegally. She cites a much-quoted Mother Earth News study that says eggs from hens raised on the pasture have one-third less cholesterol, one-quarter less saturated fat, two-thirds more vitamin A, twice as much omega-3 fatty acids and three times more vitamin E than factory-farmed eggs.

    Proponents say that having backyard hens also reduces municipal solid waste because hens eat table scraps, and that the hens will also eat weeds and bugs. "Hens are people-friendly, nonaggressive and always entertaining to watch," says Urban Agriculture Kingston, which successfully lobbied to bring backyard hens to their community.

    Kingstons regulations for backyard chicken coops are typical of what most hen-loving municipalities allow. A maximum of six hens are permitted just four in Vancouver and all hens must be at least four months old. Roosters are prohibited.

    Applicants in Kingston must tell their neighbors about their plans to obtain a hen coop and then apply for a permit. There are regulations that determine the size and placement of coops, and they are not allowed in front or side yards or within 7.5 metres of a church or business or within 15 metres of a school.

    Hens must be in their coops from 9 pm to 6 am and kept in an enclosed hen run when not in the coops.

    If the idea of planning and building a chicken coop is a bit overwhelming for would-be city farmers, some companies offer rental hens. In Guelph, Ont. a firm called Backyard Bok Boks will rent you three laying hens, a waterproof chicken coop, wood-chip bedding, a predator-proof electric fence and local delivery and pick-up for 349 on a two-week rental package.

    A U.S.-based franchise called Rent the Chicken now has now expanded to Freetown, P.E.I. and the Toronto area. Rent the Chickens standard package runs from June until October, providing two hens, a chicken coop, all the information you need to take care of your chickens and more for 375.

    "Due to local chicken owning laws, renters are actually purchasing the hens," says the Rent the Chicken Toronto website. At the end of the season the hens will be bought back for 1, or you can adopt them.

    Not everyone is on board with the idea of backyard chickens, including some animal welfare advocates. They say that once the novelty wears off, some amateur farmers dont care for their chickens properly. In the U.S., some animal shelters report that rescue calls for chickens increased when backyard coops became more popular.

    Theres also the matter of what happens to the hen once it stops laying eggs. The hens lay about one egg a day until they are about 18 months old and then production slows down and eventually stops. But chickens can live to be about 15 years old.

    Many urban farmers treat their chickens like pets and dont want to see them on the dinner table, but having unproductive hens cuts down on your egg supply. Many municipalities do not allow hens to be slaughtered in backyards.


    http://www.thehappychickencoop.com

    One of the main concerns that cities have with chicken coops is how well they will be maintained to avoid bad smells and unwanted rodents. While advocates say regular cleaning and maintenance and careful handling of the food should eliminate these issues, not all chicken coop owners may stay as committed to cleanliness as they should.

    "Chicken coops smell disgustingly vile," Toronto City Councillor Glenn De Baeremaeker told the Toronto Sun. "The noise that may occur, the slaughter that may occur when people want a fresh chicken in the pot. As much as I love chickens, they belong on a farm, not in your backyard."

    There has also been concern about avian influenza, or bird flu.

    In its 2010 report, Kingston Backyard Hens: An Eggcellent Idea Whose Time Has Come, http://uakingston.webs.com/backyardhens.htm, Urban Agriculture Kingston says, "The type of avian influenza that is contagious to humans has not been found in North America. Bird flu is spread by contact with the contaminated feces of wild migratory waterfowl. So the key issues are sanitation and contact with wild birds. Unlike rural farm birds which might co-mingle with migratory birds or drink from a shared pond, backyard hens are contained in an enclosure and watered inside this enclosure."

    A U.S. site, My Pet Chicken says that if you keep chickens, you probably dont need to worry too much about avian influenza but you should be informed about it. Another good site for information on the topic is The HappyChickenCoop.com.

    At least two Canadian municipalities, Kitchener, Ont. and Edmonton, embarked on long-term studies of the issue in 2015. Even places like Calgary that recently rejected the idea have probably not heard the last of it. As Mayor Naheed Nenshi told the Calgary Herald, "Once every five years we talk about this stuff."


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    California Legislation Addresses The Use Of Team Names in Real Estate. Again

    If recently-approved legislation has its intended effects, clarity will have finally been achieved regarding the rules for the use of team names by California real estate licensees. Whether there will be compliance with those rules may be another matter altogether.

    The legislation, Senate Bill 146 Galgiani, was approved by the Governor July 16. It is the culmination of efforts initiated by the Real Estate Commissioner in early 2013. The problem was, and in many instances still is, that consumers were frequently unable to determine the identity of the agents or responsible party behind a team name. For example, if a consumer had a problem with something that was being done by the Surfs-Up Team, he might have had no way of connecting that team to a particular brokerage or office. Nor would the Bureau of Real Estate BRE.

    The BREs initial solution was to require that team names be registered with the county as a fictitious business name FBN, often referred to as a DBA for "doing business as". The FBN would be owned by the broker, but could, by contract, be used by a particular agent or agents. This, however, proved more than a little cumbersome. Ensuing legislation AB 2018 sought to make matters more workable by stipulating that the most common types of team names -- those containing the surname of a team member -- did not have to be registered as an FBN.

    Because of continuing unclarity, however, this years SB 146 was introduced. Now that it has passed there should be a set of rules that are clear and workable.

    Here is a summary:

    As before, an agent may file a team name as an FBN of the broker, and may use that team name with the consent of the broker.

    A team name is not considered a fictitious business name and does not require an FBN filing, if the following three conditions apply.

    A The name is used by two or more real estate licensees who work together to provide licensed real estate services, or who represent themselves to the public as being a part of a team, group, or association to provide those services.

    B The name includes the surname of at least one of the licensee members of the team, group, or association in conjunction with the term associates, group, or team.

    C The name does not include any term or terms, such as real estate broker, real estate brokerage, broker, or brokerage or any other term that would lead a member of the public to believe that the team is offering real estate brokerage services, that imply or suggest the existence of a real estate entity independent of a responsible broker."

    For example, the team name "The Surfs-Up Team" would not be exempt from the requirement to file an FBN, because it does not meet condition B above. It doesnt contain the name of a team member. On the other hand, "The Bob Hunt Team" would be a name that would not require being filed as a fictitious business name.

    So far, so good. No one should have any trouble figuring out whether or not a fictitious business name filing is required for a particular team name. So where is the potential compliance problem? Advertising.

    The rules in this regard cover "Advertising and solicitation materials, including business cards, print or electronic media and for sale signage" If the team name is a fictitious business name, it must include the name and license number of the salesperson who is using the fictitious business name. If the team name is not considered an FBN, the ad must include "the name and license number of at least one of the licensed members of the team." This would not appear to be a problem.

    The troublesome part is that, in either case -- fictitious business name or not the responsible brokers identity name and license number must be displayed in all advertising in a manner that is "equally as prominent" as the team name.

    Pick up a paper or magazine that contains real estate ads. Try to find one that has a team name with the brokers name equally prominent. Usually, its harder than finding Waldo.

    To be sure, the legislation doesnt define "equally as prominent" or "as prominently and conspicuously" as the team name. One would expect that font size will be an important consideration. Placement and color contrast might also play a role dont put the brokers name in dark grey on a black background. In the end, it may be like "I know it when I see it." Or perhaps, "Ill know if I dont see it." In any event, it will take a monumental change in habits and attitude for teams to start displaying their brokers name as prominently as the team name.

    When SB 146 became law, it became effective immediately. This is because the act was considered "an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the [state] Constitution" Some of us might think that a bit of a stretch. Nonetheless, the important point is that it is effective NOW.

    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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    Updated: Thursday, August 27, 2015

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