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Real Estate laws: weird or true?

Laws are always evolving and changing. Some changes are fairly significant, like the child support guidelines taking effect next month, but others are slight clarifications of existing laws, like the one that we recently posted on Facebook regarding easements in condominiums; however, some just don’t make sense, like these real estate ones:

https://www.redfin.com/blog/2016/12/6-weird-real-estate-laws-that-are-actually-on-the-books.html

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“Can I Ask You A Question?”

Have you ever noticed that when a doctor walks into a room, everyone suddenly has medical ailments? The question usually starts with, “I hate to ask you this when you’re not at work, BUT….”

We have a sweet as pie cousin who happens to be a pediatrician. We try not to ask her questions, but, inevitably, small talk among parents often leads into something medical. As we kick ourselves for letting the words escape our lips, she is very always gracious to share her opinion and experience as a parent, family member, and (yes) pediatrician.

The same thing happens regardless of what you do for work. Everyone has a situation that they want to discuss or question that they want to ask. Like our cousin, we are always happy to help and share our knowledge and experience. So, before you ask, we will share the answers to our most often asked real estate questions:

“I heard that mortgage rates have gone up lately. Should I wait to buy or refinance a house until the interest rates drop?”

It is still a great time to buy a new home or refinance your current home. Yes, rates have increased very slightly over the last few months, but they are still really low at this point. We have all been really spoiled with the ridiculously low mortgage rates for the last few years. Have you ever asked your parents or grandparents about when they purchased their home?  They probably told you that their house cost $26,000.00, but also that their interest rate was 17-20%. With mortgage rates still so slow and such a variety of lending programs available, it is definitely worth exploring whether it makes financial sense to buy or refinance now, before the rates rise.

“Should I have an attorney review my Purchase and Sales (“P&S”)?

In a profession where our answer is frequently “it depends,” our answer to this question is it is very wise to do so. The most important reason is that, once it is signed, you have committed to the terms and cannot change them.

Most real estate agents use a standard form created by REBA, the Real Estate Bar Association of Massachusetts. Are the forms any good? Yes, but our experience guides anticipation all of the legal problems that might arise during your transaction and which cannot be added to the document by an agent. We attach addendum which offer important, additional protections, related to condition of the premises, delivery of Deed, survey review, potential defects to title, ability to obtain property and Title Insurance, damage to the property, deposits, contingencies for mortgage or sale of other property, and other important aspects of the home.

“Do I need Title Insurance?”
We often get this question at the closing table. Lenders typically require a policy for the loan and which is paid by the buyer.  An Owner’s title policy is optional; however, it’s one of the smartest investments that you can make in your home and it is reasonably priced, especially when compared to the cost of fixing issues that might arise later.

For purchases, we look at a 50 year history of the premises. Even the most meticulous search may not unveil hidden risks with your “title (aka ownership),” because those risks have not yet become evident by the time of closing. Some specific hidden risks that can be protected by Title Insurance are:

* forgery;
* fraud or mis-representation in connection to the execution of the documents;
* undue pressure on the seller or personal representative of an estate;
* false impersonation by people claiming to own the property;
* incorrect statement about the marital status of a Seller (which is more likely if the premises is being sold during a divorce);
* issues related to a seller who has passed away, including disclosed or missing heirs, birth of additional potential heirs after the creation of the will, misinterpretation of a will or trust, and estates which were not properly probated;
* inadequate survey;
* incorrect legal description;
* non-delivery of deeds;
* claims or liens not yet on record;
* confusion regarding similar or incorrect names;
* delivery of deeds after the death of a grantor;
* incorrect indexing at the Registry of Deeds;
* unrecorded easements; and
* zoning violations.

As always, please call or email us if you have any questions regarding this or anything else.

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The Room Where it Happened

“No one really knows how the
Parties get to yessssss
The pieces that are sacrificed in
Ev’ry game of chessssss
We just assume that it happens
But no one else is in
The room where it happens.”

-Lin Manuel Miranda

I have a friend who lives in a charming town located a couple of hours outside of London, England.  She lived in the United States for some time and still has an acute interest in what happens here. I recently asked her about how her local friends, family and colleagues perceived our President- Elect, Donald Trump.  Part of her response included this inquiry, “Giving some states more votes doesn’t seem fair. Surely one person, one vote works best?”

Electoral and popular votes usually point in the same direction, but not always.   Regardless of whether you favor it, the process was established by the Founding Fathers many, many years ago. We have journals and drafts which documented their process, but nobody knows for sure what fully happened in the negotiating sessions. There are two primary theories to why the Electoral College was created:

The most known theory is that it was developed to balance the influence of the small states with the larger ones.  Current sub-beliefs are that that the process was developed to account for the slave population in the South. Although slaves were unable to vote, inclusion of them greatly increased a state’s population (even though they were only counted as 3/5 of a person), the state’s representation in Congress and their number of electoral votes.

An alternative theory, and the one recognized by the National Achieves and Records Administration, is that the Founding Fathers created the Electoral College as part of the Constitution as a compromise. Many historians believe that there were heated arguments about how a President should be selected. The exclusive group, which included Alexander Hamilton, George Washington, Thomas Jefferson, and James Madison, argued whether Congress should appoint a President or qualified citizens should be allowed to vote.

More likely than not, the reasoning of the Founding Fathers was a combination of both reasons. We will probably never know the full story, because none of us were in the room where it happened.
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The Official WJS Endorsement for the 2016 Elections

We were hoping that you would ask who we are voting for in 2016.  We thought that you might. Since you didn’t ask, we will just tell you.
For the last few months, the news has been dominated by scandals. Instead of focusing on imperfect people, our focus should be on who is more likely to conduct the country’s business successfully, especially the nomination of United States Supreme Court Justices.

 

Only a few month ago, everyone was talking the importance of nominating the next Supreme Court Justice. As you may remember, we blogged about it soon after Scalia’s death at https://wjslegal.com/blog/page/3/

 

Very little time has been spent since Scalia’s death discussing the Supreme Court. Given this election cycle, it’s not a total surprise despite the number of seats on the Court which may become empty within the next four or eight years. Depending who makes and confirms the nomination, the Court may look very different in the next decade.

 

During the 2016-2017 term, the Court will hear a variety of cases related to gun ownership, freedom of religion, voting rights, the death penalty, and equal protection. One of the cases likely to draw the most interest is one involving the bathroom use of transgender high school student.

 

Do you have an opinion about any of these matters? If so, then it matters to you who becomes President and which of the down ballot candidates will be confirming the President’s nominations. Each vote has the potential to change our country.

 

So, for the first time ever, the Law Office of Weiner Jackson & Simmons is making an endorsement: we are voting for the Supreme Court. You heard it here first.

 

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Why an Owner’s Title Policy?

Great information from Old Republic Title Group, who we proudly represent:

Mr. Seller and (presumably) Mrs. Seller arrived at settlement to execute the deed to Mr. & Mrs. Buyer. A while later, the real Mrs. Seller’s attorney mails a letter to Mr. & Mrs. Buyer claiming the property still belongs to Mrs. Seller, who had been separated at the time of the purported sale and unaware of the perfidy of Mr. Seller.

Joe Frazier, after his annuity income stops, decides your property is still his, 14 years after he signed a deed. Sounds crazy, but he still sues you and you need a good title attorney, NOW.

Your legal description recites a boundary along a roadway. Your seller says he uses the dirt roadway to get out to the main roadway. The searcher just assumes there is legal access to a public road because of the way the legal description reads. When the property owner over which you must travel to reach the main highway sells, the new owner decides to block off the dirt road. Now you are landlocked. You may or may not be able to require this neighbor to open the roadway again without purchasing an easement from him, but you have to go to court and pay a lawyer and the court expenses.

A new regime takes over the local municipal government determined to save the taxpayer’s money and get re-elected again and again. The “newly elected” tackle their new job with vigor that would surpass the “white tornado” in that old commercial for a newer, stronger, more disinfectant cleaner. They are determined to “clean house.” To their delight they discover that their campaign rhetoric was absolutely true. The last members of the municipal board had never gone after the scofflaws of the township to get them to pay their water/sewer line tap-in fees, or their street improvement assessments, or any of the other myriad township assessments and fees imposed on the upstanding property owners as a privilege to live in “Camelot” township. Now is the time to collect on the old municipal liens. But now you are the owner of the property. It was your seller who was the “scofflaw.”

When you purchased your property, the settlement clerk paid off the seller’s mortgages. You thought your troubles were over. Later when you went to refinance your mortgage for a lower interest rate, the searcher finds old open mortgages still against your property. The settlement clerk had obtained a letter of indemnification from the seller’s title insurance underwriter (because the seller had an Owner’s Title Policy) in order to insure over these old mortgages. Later the clerk failed, for whatever reason, to obtain releases from the mortgage companies to clear the courthouse records. If you did not purchase an Owner’s Title Policy insuring you against such liens, you cannot obtain a letter of indemnification, as did the seller when you purchased, because you did not purchase the Owner’s Title Policy to protect yourself.

However, you were advised by a trusted and competent advisor that you do not need an owner’s title policy. “Once they search the title to protect the lender, you know your chain is good. So why pay the extra money for an owner’s policy.” Good advice? Not when that claim comes in.

A Lender’s Title Policy insures only the lender. And the Lender’s policy insures that the mortgage is a first lien. The lender, of course, would be concerned if you lost your title to the property but only when you lost your title to the property. The lender would be concerned if they found out there is a judgment or municipal lien ahead of their mortgage in lien priority; but only when the mortgage is in foreclosure. The lender gets concerned once the tragedy has already happened. An owner is concerned before it gets that far. And, without an Owner’s Policy, you are not covered and you must pay someone else’s debt.

Because the title policy is an indemnity contract for losses, the mortgage company must suffer a loss before they actually have a claim under the Lender’s Title Policy. Therefore, they must proceed to foreclosure, sell the property and obtain less than the debt due on the loan. By that time the owner has been ejected from the property.

For just a little more money over the lender’s-only policy you can get an Owner’s and Lender’s policy combination that protects your ownership interest. In addition, should you die, the ownership interests of you heirs or devisees are also protected under this same policy. You pay a premium only once and the policy continues in force until you sell to a third party. Don’t let anyone convince you that the lenders coverage accrues to your benefit.

Reprinted from the December 1999 issue of the Old Republic National Title Insurance Company newsletter, Title Talk, Pennsylvania Edition

For more information or with specific questions, please feel free to contact us at (508)319-1529.

 

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