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Mar 24

Salmon, Resale Inspections and the Ongoing Flood Insurance Conversation. MAR Monday Memo 03/24/14

By Legislation, Marin Association of Realtors, Marin Community News, Marin Real Estate News, Regulations

Good morning MAR members!

Spring is here, even though it’s felt like spring all winter.  I saw in the paper the other day that we just had the warmest winter on record for California…it really didn’t feel that way in December and January, when it was in the mid 20s every night at my house for about six weeks straight…no rain and frigid night temps killed much of my landscaping.  The citrus trees hated it.  That’s well behind us now, and the weather has been phenomenal for much of our winter.

Multiple offers all around.  Two offers, five offers, ten offers, more?  Every property of interest to my buyers is a brutal competition.  We seem to have more listings, and the data bears that out, but whether it’s in the flats or in the hills, it seems like every house on the market has plenty of buyers as long as it’s priced correctly.  Let’s get our sellers off the fence!

One final reminder for the Celebration of Catherine Munson’s life.  It will be held at the Marin Veteran’s Memorial Auditorium at the Marin Civic Center in San Rafael, this Thursday, March 27.  Doors will open at 1:00 pm, the service will begin at 2:00 pm, with music, food and joy to continue afterwards.  In lieu of flowers, the family prefers donations to Project Amigo, 14 Commercial Blvd., Suite 199, Novato, CA  94949.

This has been a truly amazing time to be the leader of MAR and to be able to witness firsthand the profound impact that Catherine has had on so many of our members and the community.  She touched so many in so many ways.  In meeting after meeting, people have shared heartfelt anecdotes about Catherine, and she will be missed very much.

On to what’s happening this week:

Salmon, resale inspections and the ongoing flood insurance conversation.

At my request, over the past couple of weeks, Donna Lahey of MAR staff performed a lot of due diligence with the county about where we sit right now in regards to the Marin County Streamside Conservation Ordinance.  As you may know, this is an ordinance that MAR opposed last year due to its vagueness, arbitrary rules, and compromise of private property rights throughout unincorporated Marin.

With all of that said, it was passed by the Board of Supervisors last year, and the Marin County Streamside Conservation Ordinance was the law of the land.  There have been several appeals, however, and two weeks ago the ordinance was sent back to the Board of Supervisors by the California Court of Appeal on the grounds that the Environmental Impact Report (EIR) was not thorough enough; the courts ruled that the impacts of long-term development on the salmon populations was not taken into enough consideration.  So the courts sent it back to redo the EIR.  The Court of Appeals also ruled that the prior building moratorium in the San Geronimo Valley was not valid either, and so no more building moratorium.  That is great news, and it looks like the building moratorium won’t come back around.

The upshot of this is that the 2007 Marin County General Plan, of which the Streamside Conservation Ordinance is a part, has been blown up as it relates to the San Geronimo Valley.  Rather than the 2007 General Plan, now the 1994 General Plan is the law of the land in the San Geronimo Valley.

Stay with me here.

As best as we can verify at the County, the building guidelines of the 1994 General Plan are in effect in the San Geronimo Valley.  Curiously, the guidelines of the 2007 General Plan are in effect for the rest of unincorporated Marin County.  The Streamside Conservation Ordinance has been declared invalid.  And the San Geronimo Valley building moratorium was declared invalid and thus no more building moratorium.

What I’ve been trying to get at is, “How in the world do we advise our clients and property owners?”  I had a camo this week in the San Geronimo Valley, and a couple of the top agents in the Valley told me that “No one knows what’s going on.”  You think?

The question that I had…which is still not answered by the county:  Let’s say I have a house in the Valley.  Let’s say I want to do something (repair my deck, add some space, rebuild my driveway, etc).  What rules am I operating under?  According to the County’s press release (click here to read:  http://www.marincounty.org/main/newsroom/press-releases/2014/eir-ruling), it’s the 1994 planning guidelines.

So let’s say I start a permitting process in the Valley under the 1994 guidelines, and before I’m done, this all gets resolved…do I get to finish my project under the 1994 guidelines?  Or will it be the 2007 guidelines?  Or will there be new guidelines?  I still cannot answer that question.  MAR’s Donna Lahey was interacting with Brent Ainsworth, the County’s Public Information Officer.  His response to this question was: “We’re still working on an answer to that other question. The court ruling is so fresh, the answer is being hashed out among our attorneys and community planners. We’ll try to get back to you soon.”

Again, as I understand it, other unincorporated areas like Sleepy Hollow, Marinwood, Kentfield, Tam Valley, etc, are still under the 2007 General Plan…minus the Streamside Conservation Ordinance.

Confused?  So am I.  Sorry for the incomplete info, but I think we need to be talking and thinking about all of this.  I think it’s best to advise our clients that there are a lot of moving pieces that will hopefully become clearer in the coming weeks and months.

More on resale inspections

Lots of feedback from members on my comments a couple of weeks ago about one of our large municipalities that is busy “cleaning up past mistakes” and engaging in “double jeopardy.”  The staff in this town seems to be admitting as much:  “we made mistakes in the past, now we’re trying to correct those mistakes.”  Thank you to Matt MacPhee for coming to MAR’s Government Affairs Committee meeting last week during “open forum” time to detail the challenges he is having with this building department.

This kind of feedback is essential to MAR, and best delivered in person during “open forum”, which we have at 9:00 AM before both the monthly Government Affairs Committee meeting and also before the monthly Board of Directors meeting.  This is YOUR association, and we welcome and encourage you to come in and tell us what’s going on.  About anything.  PLEASE take advantage of this, emails are great, but there is no substitute for the color and detail that our members can provide during this open time, and it allows for valuable Q&A.

MAR is focused on ensuring that the building officials and elected officials in our Marin municipalities know the value of our Fair Principles of Resale Inspections.  We are working on getting the leadership of this municipality in question to come in and tell us what they are doing and why they think it’s ok.

Flood Insurance Update

Good news!  According to NAR, last Friday, President Obama signed the “Homeowner Flood Insurance Affordability Act” into law.  This law repeals FEMA’s authority to increase premium rates at time of sale or new flood map, and refunds the excessive premium to those who bought a property before FEMA warned them of the rate increase.  The bill limits premium increases to 18 percent annually on newer properties and 25 percent for some older ones.  Additionally, the bill adds a small assessment on policies until everyone is paying full cost for flood insurance.

That’s it for now.

I wish you a safe and prosperous week!

Blaine

Feb 22

Short Sale Auctions, SB-407 Water Conserving Fixtures Update – Blaine Morris’ 2014 President of Marin Association of Realtors 02/17/14 Monday Memo

By Legislation, Marin Association of Realtors, Marin Real Estate News, Regulations

Good morning MAR members!

Happy President’s Day…which in Marin means Happy Ski Week!  Everybody sure seemed to be going somewhere last Thursday night, as I was trying to get to a dinner meeting in downtown San Rafael (well after rush hour) and it was absolute gridlock with people trying to get on 101 North…so I hope those of you on your way to a family ski vacation are having a fantastic time!

For those of us still here this week, another week in Marin, another week of low inventory.  Buyers are out there, as we all know.  Increased inventory will be good for everyone, so let’s get our sellers off the fence!

My weekly SB-407 water conserving retrofit update is below, lots of new info, and some qualified good news.  This week, I’ve put it down at the end of the memo so people don’t think that’s all I talk about every week…

AUCTIONS

Oh my goodness, lots of feedback on auctions.  Several weeks ago, I shared that CAR is going to “SPONSOR” legislation to require an auction company to indemnify or “hold harmless” the listing broker in a transaction against liability that results from the auction company’s actions in a short sale transaction.

As I said, this was the big story that everyone at last month’s CAR meeting was talking about.

Here is the genesis of this issue:  it is becoming an increasing practice that as part of a short sale approval, some banks/servicers are requiring that before an approval is granted, the property needs to be put out on an auction site to “verify” the price.  There is one servicer in particular who is doing this a lot.  As part of this process, the original listing broker is asked (required?) to abrogate the listing agreement to the auction company…then the auction company runs with the auction and essentially the listing.

But the original listing broker still has agency with the seller, and also has an agency disclosure with the buyer.  What happens if, as part of all of this, mistakes are made by the auction company during the transaction?  I know of one of these auction companies that is legitimately licensed with the State of California as a licensed broker, and I’m sure there are more.  If something goes wrong, who is then liable?  Whose E&O pays?  This is the root of the above “SPONSOR” position on legislation to get indemnification of the original listing broker by the auction company.

But wait, there’s more.  What does all of this say about a broker’s legitimate listing contract with a seller?  Does the bank have the authority to demand that a listing broker abrogate its legitimate contract with a seller to proceed with this deal?  It becomes a larger question about the overall legitimacy of our listing contract.  CAR is looking into this as well, and I must say it’s a hot potato issue.

CAR is looking for specific anecdotes…war stories.  Here is what they are looking for:

“We are looking for any anecdotes where a licensee may have been sued due to the negligence of an auction company. We are also looking for stories, where to avoid legal action, a licensee has taken financial responsibility for the error of an auction company. And finally, we are looking for any instances where licensees have been informed by their E & O carrier that if an auction company were to make an error and the REALTOR® was held responsible for it, that the event wouldn’t be covered under the policy. It would also be helpful to know which E & O carrier was involved.”

Can any of you help with this?  If you have any of these stories personally, or if you know of someone else who does, please contact me here [mailto link].  It’s important that we communicate what is happening on the ground here in Marin to our statewide association.

SB-407 WATER CONSERVING FIXTURES UPDATE

I recently directed MAR staff to survey the various Marin municipalities about each town’s plan for implementation of SB-407.  The question is whether our building departments are planning to follow the California Building Officials (“CALBO”) recommendation that permits for repairs and maintenance of homes are EXEMPT from the retrofit requirements.  After surveying most of our towns, it does seem that they are going to follow that recommendation.  Here is a link to CALBO’s position (see second page):  http://www.calbo.org/uploads/NoCal%20Policy%20Memo%20SB%20407%20%28Dec%202013%29.pdf

In addition, another concern is whether unclosed permits from prior years will require a retrofit when they are closed after the fact…sometimes years later…often as part of a real estate transaction.  To my great relief, those that we have spoken with have said “no”, old unclosed permits should not trigger a retrofit requirement since the permit was pulled prior to the new code.

Each town kept pointing to a meeting this week among the building officials, the Code Advisory Board meeting.  Their plan is to coordinate a uniform policy county-wide.  There are some minor differences around the edges, but let’s await the results of this group’s meeting to confirm that those differences are smoothed out

The current RETDS does have some brief language mentioning this new code, but I’ve received a number of comments that this language is inadequate.  CAR is working on it, and MAR is monitoring the situation closely with our General Council to make sure that we can advise our clients correctly.

As I keep saying, stay tuned.

I wish you a safe and prosperous week ahead!

Blaine

 

Feb 17

SB407 and CAR Meeting Update – Blaine Morris’ 2014 President of Marin Association of Realtors 02/03/14 Monday Memo

By California Association of Realtors, Marin Association of Realtors, Regulations

Good morning MAR members!

Last week’s memo on SB-407, the new statewide water retrofit regulation, generated a huge amount of response.  Marin officials are still formulating their oversight plan, and MAR will get clarity on the changes. We will be doing so ASAP to determine the local criteria to trigger a need to retrofit based upon permit issuance.

Again, it is not a current point-of-sale requirement.  It is triggered by the pulling of permits for other things, starting this month.  However, starting January 1, 2017 (three years from now) every homeowner in the state will be required to retrofit their homes built before 1/1/1994, regardless of point-of-sale or permits… even if it’s not part of a sale.  Thus, it will become a point of sale requirement on January 1, 2017 for homes built before 1/1/1994.  Much like the recent rollout of required carbon monoxide detectors in all homes.

Some of you asked about disclosure requirements.  The Real Estate Transfer Disclosure Statement was revised over a year ago to reflect this new law.  On page 2 of the RETDS, the document specifically discloses much of this, but is brief in the description.  There looks to be an upcoming “Water Conserving Fixtures Disclosure (SB407)”, and I’m seeking clarity on when this form will be available.

MAR will continue to pass along info.

I promised to report back on the developments at last week’s CAR meetings in San Diego.  The other members of our CAR team will be reporting to back to me, and I will forward other relevant items as I learn about them.

So, in no particular order:

Transaction and Regulatory

I sit on this committee.  We voted on the following action items, and we later voted as the CAR Board to approve these action items. These are NOT new regulations; CAR is simply starting the process:

  • That CAR “SPONSOR” legislation to clarify the rules for the CalBRE to regulate the use of “Team” names by licensees.  This was an extremely busy conversation, as this subject is getting a lot of attention at the CalBRE.  Currently, brokers are supposed to file a DBA to cover team names working for their brokerages…and the broker officially owns those team name DBAs.  This policy needs clarification, and an update is planned for the May meetings.
  • That CAR “SPONSOR” legislation to require an auction company to indemnify or “hold harmless” the listing broker in a transaction against liability that results from the auction company’s actions in a short sale transaction.  This was THE big issue that everyone was talking about the whole week.  There is too much on this subject for this memo, I’ll be writing more on this soon.  Also, at the CAR Board of Directors meeting, the floor voted to direct CAR legal staff to look into the whole validity of our listing agreement, as some banks are now requiring short sale transactions to go out to auction after a purchase agreement is executed…effectively ordering the listing broker to abrogate a valid contract and turn the listing over to the auction company.  Everyone is very interested in this subject, stay tuned.
  •  That CAR “SPONSOR” legislation to prohibit short-lived communications like tweets or text messages from being considered “transactional documents” that must be retained in a broker’s file.  This will be an ongoing conversation, but for now your text messages are supposed to be retained.

Taxation and Government Finance Committee

We voted to “SUPPORT” legislation to study the revenue impact of allowing homeowners to transfer their property tax basis to a home anywhere in the state.  This relates to Propositions 60 and 90, where over-age-50 homeowners can transfer their tax basis once per lifetime.  Right now, this is governed on a county-by-county basis, and Marin does not allow a new homeowner from outside the county to transfer his or her tax basis into Marin (though an intra-Marin transfer is allowed).  I tried to discern the political will for this, and the answer was “stay tuned.”

Public Policy Forum–General Home Inspectors

This forum was packed.  Believe it or not, there is no current statewide licensing requirement for general home inspectors.  We use these valued professionals in many of our transactions, and there are current industry standards in their trade associations.  But no statewide oversight.  Pest inspectors, engineers, electricians and plumbers all have a licensing requirement, and there is a discussion of creating such a licensing requirement for general home inspectors.  We voted on the Transaction and Regulatory Committee to establish a working group to explore this subject, and also to “explore options related to home inspectors contractual limitation of liability provisions…”   More on this later in the year.

Standard Forms Advisory Committee

The other big news from CAR is that there is a substantial revision of the Residential Purchase Agreement in the works.  The current draft will be available here http://on.car.org/rpa2014 until 2/14/2014, and there will be more revisions going forward.  Take a look, and we’d love to be able to pass along any feedback.

I wish you a safe and prosperous week ahead!

Blaine

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