Home Owners Archives
National REIA Applauds US District Court Ruling Upholding Fourth Amendment that Protects Property Owners from Unnecessary Gov’t Harassment
Cincinnati, Ohio) The National Real Estate Investors Association (National REIA) issued a statement today applauding the U.S. District Court’s (Southern Ohio) recent decision stating that the city of Portsmouth’s (Ohio) occupational licensing requirements, which are imposed upon landlords violates the Fourth Amendment to the United State Constitution.
Charles Tassell, Chief Operating Officer of National REIA said “Today’s ruling laid bare the excuses used by local governments to steal the freedoms of property owners.”
He further added that “The 4th Amendment is still alive and well, and citizens should NOT be forced to have their homes intrusively ‘inspected’ by warrantless searches. Every local government should take note that warrantless searches are STILL illegal and unconstitutional.”
Regarding the ruling itself, Tassell said “The ruling won by the 1851 Center For Constitutional Law was a victory for freedom against a tyranny with which the Founding Fathers were all too familiar. Citizens of the United States have an expectation to live without local, state or federal inspection of their home based on flimsy excuses disguised as law.”
Judge Susan Dlott, of the Western Division of the Southern District of Ohio, held as follows: “[T]he Court finds that the Portsmouth [Rental Dwelling Code] violates the Fourth Amendment insofar as it authorizes warrantless administrative inspections. It is undisputed that the [Rental Dwelling Code] affords no warrant procedure or other mechanism for precompliance review . . . the owners and/or tenants of rental properties in Portsmouth are thus faced with the choice of consenting to the warrantless inspection or facing criminal charges, a result the Supreme Court has expressly disavowed under the Fourth Amendment.”
For more information and to read a copy of the the Court’s ruling visit www.realestateinvestingtoday.
September 3, 2015 4:49PM
In total, Fannie Mae increased the maximum number of allowable days for a foreclosure sale for 33 states, effective for foreclosure sales on or after Aug. 1.
Fannie Mae made the announcement Thursday in an email to its servicers.
According to the announcement, Fannie Mae increased the maximum number of allowable days for the following jurisdictions: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Nevada, New Mexico, New Hampshire, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.
As part of its servicing guide, Fannie Mae establishes time frames under which it expects routine foreclosure proceedings to be completed.
According to Fannie Mae, the maximum number of allowable days takes represents the maximum allowable time lapse between the due date of the last paid installment and the completion of the foreclosure sale.
The allowable time frame also signifies the time typically required for what Fannie Mae calls a “routine, uncontested” foreclosure proceeding.
The allowable time frame reflects the legal requirements of the applicable jurisdiction, and takes into consideration delays that may occur outside of the control of the servicer, Fannie Mae said.
If the number of days to complete a foreclosure sale exceeds stated maximum number of allowable days and the servicer does not provide an adequate explanation to Fannie Mae as to the reasons for the delay, Fannie Mae requires the servicer to pay a “compensatory fee.”
According to Fannie Mae, the list of “reasonable explanations” includes:
- Military indulgence
- Contested foreclosure
- The mortgage loan is currently in review for HAMP
- The mortgage loan is in an active mortgage loan modification trial plan or unemployment forbearance
- Recent legislative, administrative, or judicial changes to existing state foreclosure laws, provided that the servicer is diligently working toward resolution of the delay to the extent feasible
Fannie Mae noted in its announcement that there is currently a compensatory fee moratorium for Washington D.C., Massachusetts, New York and New Jersey and stated that the moratorium will last, “at a minimum,” until Dec. 31.
PRIVITY OF CONTRACT:
Who Is Making Repairs For Your Buyer?
The #1 post closing question we get asked is this: “the sellers agreed to repair the (roof, electrical, plumbing, etc.) and now we’ve moved in and the (roof, electrical, plumbing, etc.) isn’t fixed. Can we go back to the seller and make them do the work properly?”
Under MOST situations, the answer is NO!!!
Huh? You mean it’s ok the seller didn’t have the work properly done as they agreed they would do? Yep, that’s exactly what we’re saying. And here’s why.
In Kentucky there’s a legal concept called “privity of contract.” Privity of contract says if I didn’t enter into a contract with a contractor directly, and if the contractor does a crummy job, the contractor is not liable to me.
Therefore, when a buyer requests a seller to make certain repairs after the home inspection, the way most agents handle the situation, there would NOT be privity of contract because the seller picks the contractor, not the buyer.
In addition, when a buyer allows the seller to pick the contractor, we know the seller will likely pick World’s Cheapest Contractor, LLC to do the work. This only increases the odds the buyer will have an issue after closing.
So, how do we fix this?
We’d love to say “insist on your buyer picking the contractor,” but we don’t think that’s realistic. Instead, as a selling agent, we’d suggest when you’re dealing with Big Ticket Items (roof, HVAC, basement, structural issues, electric, plumbing), you reach out to the listing agent BEFORE making a repair request and ask them who they are likely to use for this work. If you are comfortable the person doing the work is qualified, in the repair request specifically state the seller shall use [insert name of qualified contractor listing agent suggested] and state specifically “buyer’s name shall appear along side the seller’s name on the invoice.” If you are NOT comfortable with the contractor they suggest, you need to write in the repair request the contractor your buyer would like to use for the work. In this case, you will still need to add “buyer’s name shall appear along side the seller’s name on the invoice.”
When the buyer’s name appears on the invoice, we now have privity of contract.
If an issue pops up after closing, the buyer can now go back to the contractor to insist the contractor take care of the problem. And at the same time, we’re now using a contractor we feel good about.
Another alternative would be to have the seller give the money for all repairs directly to buyer, but this should NEVER happen without the buyer’s lender’s consent. Of course, in a cash closing, it’s fine to give money directly to the buyer, but not if there’s a lender involved.
We hope your summer has been fun and productive and we hope to see you soon at a closing table!
Since the early 1970s, our firm has practiced primarily in the field of real estate law. We represent banks and mortgage companies, real estate investors, builders and individual buyers and sellers in a variety of transactions related to residential and commercial real estate in Kentucky and Indiana. Our primary area of practice is real estate closings. However, our attorneys also practice in other areas of law as well.