Legal Corner

<p> I had a situation arise last week where the buyers had requested a survey , and on closing day, their lawyer (buyers lawyer) brought to their attention the fact that no house nor garage etc. were on the survey, that it was an R-plan only. They were getting title insurance anyway, but they insisted that they get a brand new survey. Cost was going to be 1200 .00 - The seller and the listing and the selling agent all agreed to contribute 400.00 to cover cost for buyers of this survey. This cost was from a phone call to the surveyors , who as I found out today, got the subject property mixed up with another property down the road farther. The cost will now be around 900.00 . Secondly, the survey has not been ordered yet by the buyers lawyer., nor the buyers. Now that the 1200.00 has been deducted for the cost of this new survey, and it will be less, and also assuming that they may just pocket the $1200.00 and not get a survey. What re-course do we have in this case? Is this not fraud? I called the sellers lawyer. He said nothing was in writing, but that an :abatement&quot; was done. As real estate professionals, we have to have everything in writing, why do they not need to?? HELP?? </p>

<p> Happy Easter Sunday </p> <p> <img height="252" hspace="5" width="200" vspace="5" alt="" src="/members/john/files/bunnyJR(1).jpg" /> </p> <p> John and Sean (circa 1984) </p>

<p> Hi there, </p> <p> I am wondering, is NAR tracking the quadrenial training in such a way that those who need it are notified? </p> <p> As the Managing Broker I try to make Agents aware and responsible for their own CE etc but it seems hard for them to remember if they have or have not taken the course. The local Assoc records seem to be less than accurate. </p> <p> Thanks,Dana Thompson </p>

<div> <font size="2">I just did an audit of over 150 of our offices&#39; listings on Zillow.</font> </div> <div> </div> <div> <font size="2">About 15% of them were being marketed by other agents/offices and had bad information. Price did not reflect price decreases and sometimes even basic home info (bedrooms, sqft, etc) was incorrect.</font> </div> <div> </div> <div> <font size="2">Could a seller sue a broker if they think that their property did not sell because of bad data on Trulia/Zillow? Esp. if the seller notified the agent, and the agent never corrected it?</font> </div> <div> </div> <div> <font size="2">It seems to me that the brokers have a liability exposure in this area.</font> </div> <div> </div> <div> <font size="2">For example: A seller sees that Zillow has their house listed at $1.5m when they decreased it to $1.4m several months ago. The seller notifies their agent (who is not internet savvy) and the agent looks into it but quickly &#39;forgets&#39; about it. Another month goes by, the seller sees that the info is still wrong and says that it is partly to blame for their house not selling. So they sue the agent AND the broker.</font> </div> <div> </div> <div> <font size="2">What&#39;s your thought?</font> </div>

<p> Here are the key provisions in the NAR Code of Ethics that relate to electronic communications and the Internet. </p> <p> • Standard of Practice 9-2 </p> <p> When assisting or enabling a client or customer in establishing a contractual relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of the contractual relationship being established prior to it being agreed to by a contracting party. (Adopted 1/07) </p> <p> Article 12 </p> <p> REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional. (Amended 1/08) </p> <p> <br /> • Standard of Practice 12-8 </p> <p> The obligation to present a true picture in representations to the public includes information presented, provided, or displayed on REALTORS®&#39; websites. REALTORS® shall use reasonable efforts to ensure that information on their websites is current. When it becomes apparent that information on a REALTOR®&#39;s website is no longer current or accurate, REALTORS® shall promptly take corrective action. (Adopted 1/07) </p> <p> • Standard of Practice 12-9 </p> <p> REALTOR® firm websites shall disclose the firm&#39;s name and state(s) of licensure in a reasonable and readily apparent manner. </p> <p> Websites of REALTORS® and non-member licensees affiliated with a REALTOR® firm shall disclose the firm&#39;s name and that REALTOR®&#39;s or non-member licensee&#39;s state(s) of licensure in a reasonable and readily apparent manner. (Adopted 1/07) </p> <p> • Standard of Practice 12-10 </p> <p> REALTORS®&#39; obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits REALTORS® from: </p> <p> 1) engaging in deceptive or unauthorized framing of real estate brokerage websites; </p> <p> 2) manipulating (e.g., presenting content developed by others) listing content in any way that produces a deceptive or misleading result; or </p> <p> 3) deceptively using metatags, keywords or other devices/ methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers. (Adopted 1/07) </p> <p> • Standard of Practice 12-11 </p> <p> REALTORS® intending to share or sell consumer information gathered via the Internet shall disclose that possibility in a reasonable and readily apparent manner. (Adopted 1/07) </p> <p> • Standard of Practice 12-12 </p> <p> REALTORS® shall not:<br /> 1) use URLs or domain names that present less than a true picture, or<br /> 2) register URLs or domain names which, if used, would present less than a true picture. (Adopted 1/08) </p> <p> • Standard of Practice 12-13 </p> <p> The obligation to present a true picture in advertising, marketing, and representations allows REALTORS® to use and display only professional designations, certifications, and other credentials to which they are legitimately entitled. (Adopted 1/08) </p> <p> • Standard of Practice 15-2 </p> <p> The obligation to refrain from making false or misleading statements about competitors&#39; businesses and competitors&#39; business practices includes the duty to not knowingly or recklessly repeat, retransmit or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means. (Adopted 1/07) </p> <p> <br /> In addition, there are strict rules as to the use of the trademark REALTOR: </p> <p> <a href="http://www.realtor.org/letterlw.nsf/pages/trademarkmanual">http://www.realtor.org/letterlw.nsf/pages/trademarkmanual</a><br /> <a href="http://useofrealtorinadomain.realtown.com/">http://useofrealtorinadomain.realtown.com/</a> </p>

<p> The United States Tax Court has affirmed an IRS decision that the taxpayer<br /> owed taxes for the amount of debt discharged by a lender from a short sale of real estate. <strong>Stevens v. Commissioner.</strong> </p> <p> George Stevens (&quot;Taxpayer&quot;) and his then-wife, Sharon Stevens (&quot;Spouse&quot;), purchased a residential property for investment purposes for $256,000. The property needed work, and so the plan was for the Stevens to put some money into the property and then either sell or rent it. The purchase was financed with a mortgage from Homecomings Financial (&quot;Lender&quot;). </p> <p> Shortly after purchasing the property, the Stevens were unable to make a mortgage payment. In order to avoid foreclosure, the Stevens entered into a short sale agreement with a third party, with the approval of the Lender. A &quot;short sale&quot; occurs when the lender agrees to accept a sale price lower than the value of the loans secured by the property. The Lender imposed a number of conditions on the short sale, including limiting the amount of commissions and closing costs. The sale generated $181,461.31 in proceeds for the Lender. </p> <p> Following the sale, the Lender sent the Taxpayer a Form 1099-C stating that it had canceled $74,494.96 in debt. A duplicate form was also sent to the Spouse (the couple had separated by this time). Neither the Spouse or the Taxpayer reported the discharged debt or property sale on their tax returns. </p> <p> The Internal Revenue Service (&quot;IRS&quot;) found that the Taxpayer&#39;s 2003 tax return had a deficiency of $21,323 and imposed penalties of $4,264 for the Taxpayer&#39;s filing of an inaccurate return. The Taxpayer challenged this determination. </p> <p> The United States Tax Court affirmed the IRS&#39;s decision regarding the Taxpayer. In general, a taxpayer is required to include within his or her income all discharges from indebtedness. A sale of a property with a mortgage is generally treated as a sale upon which a gain or loss is realized. There are exceptions to this rule, such as when the sale resulting in the discharge of indebtedness is part of a bankruptcy case, or if the taxpayer is insolvent, or if the indebtedness is a qualified farm or business real estate debt. </p> <p> While the Stevens claimed the property was for investment purposes, there was insufficient evidence for the court to evaluate whether the Taxpayer qualified for the business real estate exception. There also was insufficient evidence to determine whether the Lender intended to make a gift to the Taxpayer by forgiving the delinquency. Therefore, the court agreed that the difference between the short sale price and the loan amount, or $74,494.60, should be treated as ordinary income to both the Taxpayer and the Spouse as a discharge of indebtedness. Thus, the court upheld the IRS&#39;s determination that the Taxpayer owed taxes on the discharge of indebtedness. </p> <p> </p>

<p>Would you like to compare the various state laws on Agency, Rebates, license reciprocity, Seller Disclosure?</p> <p>The NAR State Issues Tracker is a fabulous&nbsp;research tool available to members of NAR.&nbsp; The NAR State Issues Tracker can be accessed by going to <a href="http://www.realtor.org/stateissues">http://www.realtor.org/stateissues</a></p>

<p> With the recent announcment of this long running lawsuit (and various posturing prior to this summer&#39;s pending litigation) how do you think the &quot;typical&quot; Realtor firm (not just the online group) fared? I am still amazed that this Administration&#39;s DOJ kept after this, given their political bent. </p>

<p> Anyone out there think you will ever be sued by your sellers for posting the DOM- Days on Market? Does it interfer with your Fiduciary duties to your sellers, in regards to your local state laws? </p>

<p> New regulations take effect in fall 2008 that will affect NAR members that have affiliated businesses and those that deal with credit reports. </p> <p> <a href="http://www.realtor.org/government_affairs/factact_affiliate">http://www.realtor.org/government_affairs/factact_affiliate</a><br /> <a href="http://www.realtor.org/government_affairs/factact">http://www.realtor.org/government_affairs/factact</a> </p> <p> The mandatory compliance date for the Affiliate Marketing Rules is October 1, 2008. The rule generally prohibits a person from using information received from an affiliate to make a solicitation for marketing purposes to a consumer, unless the consumer is given notice and a reasonable opportunity and a reasonable and simple method to opt out of the making of such solicitations. </p> <p> FACT Act: Affiliate Marketing Regulations </p> <p> FACT is the Fair and Accurate Credit Transactions Act<br /> The Affiliate Marketing Regulations, issued by the Federal Trade Commission (FTC) and the Federal banking agencies, generally require a company to provide a notice to consumers and an opportunity to opt out before an affiliated company can use certain information for marketing purposes. The affiliate marketing notice is in addition to the privacy notices already mandated, and would be a second required notice and opt out opportunity. </p>

<p> I have searched many Ohio websites for a basic power of attorney form that my clients can fill out so that the one spouse can sign the closing paperwork for both. Many states have them on their websites, but I can&#39;t find one for Ohio. Has any one or their client used one for Ohio? </p>

<p> I have a buyer who closed on several units over 60 days ago and the work that was supposed to be done on the punch list has still not been taken care of. In the contract, it says the developer has 60 days. What is the next course of action? </p>

<p>An excellent resource for legal issues is the Article area of RealTown.com&nbsp;&nbsp; Click on the Articles tab and then click on the Real Estate Law Category under Article Content</p>

<p> The San Diego Ummels lost their lawsuit against their Realtor for breach of fiduciary duty and non-disclosure of lesser priced homes.<br /> <a href="http://www.signonsandiego.com/news/business/20080411-9999-1b11trial.html">http://www.signonsandiego.com/news/business/20080411-9999-1b11trial.html</a> </p>