New Law Commencing July 1st on Non-Residential Buildings

Energy Use Disclosure Requirements

More than five years following the enactment of the governing legislation, the first phase of the Energy Use Disclosure Requirements will commence July 1, 2013. Assembly Bills 1103 and 531 require owners of nonresidential buildings located in California to disclose energy usage of such buildings in advance of any sale, lease, or financing of the entire building. In December 2012, the California Energy Commission adopted regulations implementing Assembly Bills 1103 and 531, and requiring compliance on the following schedule:

• On and after July 1, 2013, for buildings with a total gross floor area of more than 50,000 square feet;
• On and after January 1, 2014, for buildings with a total gross floor area between 10,000 square feet and 50,000 square feet; and
• On and after July 1, 2014, for buildings with a total gross floor area between 5,000 square feet 10,000 square feet.

'New Policy' Offers Relief to Underwater Borrowers & CA Homeowner Bill of Rights

2 of 3 Deficiency Judgements and California Law

This second email unpacks deficiency judgments and California law and does a very thorough job explaining purchase money ("non-recourse debt") and non-purchase money such as cash-out refinancing ("recourse debt") as they pertain to both owner occupied borrowers and investors.

Again, please print and review.

Thanks!


Patrick

Taxation of Foreclosures and Short Sales

Dear Associates,

This email on Taxation of Foreclosures and Short Sales, is one in a series of three that I am sending you (with attachments) that pertain to this topic as well as an overview of the new 3.8% tax.

Please print each of these, read them and ask your manager any questions that you might have.  As these will also be subjects (some of them for a second time) in upcoming sales meetings it will also help to have read them.

One very important reminder (and the thought that encouraged us to send these emails/attachments out) is that we have to be exceptionally careful to never give our clients inaccurate or misleading (ignorance will not be an excuse) information.  For example, although the Federal decision to extend the Mortgage Debt Relief Act has been announced, California (to date) has not yet agreed to do the same - and may not!  Therefore, if a client asks if they are liable for taxes on their short sale (if the forgiven debt was purchase money or "non-course debt"), the correct answer is although they may not have a federal tax liability, unless California decides to follow suit with the Federal guidelines, they currently will have a state liability for ordinary income tax on the forgiven amount.  Part two of our response is that "We are not tax or legal advisors and I must advise you to seek appropriate guidance from a tax professional such as an accountant or attorney to discuss potential tax liability and any other consequences".

This attachment also covers the fact that sellers are still responsible for paying capital gains even in the event of a deed-in-lieu, short sale, or foreclosure of their property!!

Again, please take the time to read the enclosed and the other emails to follow.  Doing a great job for our clients means happier clients and more business!

Good luck!



Patrick

Don't Let Your House Sale Fall Through!

Please read the attached WSJ article – it has some good reminders to help close more deals.  Here are a few additional thoughts.

1.       Remember what a huge advantage Royal Charter Mortgage offers you.  Financing problems are to blame for 40% of escrows falling out.  Use Royal Charter and you’ll close more deals!

 2.       Prepare for the appraisal and meet the appraiser at the property!  The article suggests that you may want to add a contingency to the contract laying out how the sides will re-negotiate if the homes appraisal value is lower than the sales price.  This is tricky and not good advice.  If your client ever requests this only do it after you’ve obtained verbiage from your Sales Manager.

 3.       Great suggestion to always get inspections and the preliminary title report done immediately!

 4.       Remember, time kills all deals.  Shorten up time frames where possible and if the seller needs to stay in the property for a period of time, close early and have the seller rent back (see your Manager!)

 

 Good luck!  Continue to enjoy the holidays, but don’t forget to work and prospect for new business!!

Lead Base Paint....EPA

As discussed at our recent sales meetings, please open this Wall Street Journal article as further information on the new laws regarding Lead Base Paint imposed by the EPA.

http://online.wsj.com/article/SB10001424052748703460404575244812466388810.html?KEYWORDS=NEW+LEAD+PAINT+LAW#printMode

Also, you have a new General Contract Addendum (paragraph Z2) as of today to help protect you and your clients.

Have a wonderful day!

"Short Sale Coordinators"

Dear Associates,
As mentioned at the Sales Meeting this week, we cannot work with any 3^rd party "Short Sale Coordinators". If you have any questions, please see your Manager.
Attached is a recent email that is a perfect example of a 3^rd party Short Sale Negotiator who makes all kinds of promises. BUT bottom line is their activities range from unethical and unconscionable to illegal. We have been informed by the DRE that several of these companies are being prosecuted in California and that Associates who have worked with them have lost their Real Estate licenses and are also being prosecuted.
Short Sales are a great source of business in our markets, however, they should be managed directly by the Sales Associate.
Again, see your Manager with any questions and thanks for your vigilance. We’re trying to look out for your and the clients best interest.