Thursday, January 18, 2018

Can an agent be held liable if a mechanic's lien is found after closing?

No.  A mechanic's lien can be placed against a property well after closing (up to 89 days).  Thus, the title search would not have revealed because it didn't exist.  An agent can do all possible to assure the buyer that work has been paid for by the seller prior to closing.  But there is no guarantee that all were paid appropriately.

Wednesday, December 6, 2017

What is the distinguishing difference between void, valid, voidable and enforceable?

Enforceable means that the contract can be enforced by a court presiding.  For example, if the contract if for something that is illegal, a court of law cannot enforce the terms in the contract upon the parties.

Valid means that a contract has all of the required elements: consideration, assent (genuine and mutual), legal capacity and legal purpose.  As an example, consider a 30-year old homeowner of sound mind signed a contract with a contractor to do some work on their home.  The homeowner pays a deposit (consideration) and the contractor begins the work.  This example contains the four elements which makes it valid.

Void means that one of the elements of a contract is missing which means it is not a contract at all.  Consider that a buyer and seller enter into a purchase contract on the seller's home.  However, the legal description was completely wrong.  This means that there was "no meeting of the minds" (mutual assent), thus the contract is void.

Voidable means that the contract has all of the elements, but one or more of them can be removed.  The person who can remove the element or the injured person is the one who can void the contract.  If the injured party takes no action, then the contract is valid.  For instance, a buyer signed a contract when he was extremely intoxicated.  Because he did not had legal competence, he could choose to void the contract when he sobers up.  However, he may decide that he wants to go forward with the contract and do nothing.  In this case, the one who signed under the influence of alcohol (injured party) can void the contract.

What is the difference between a material fact and an adverse material fact?

A material fact is one that is used and/or relied upon to make a decision.  A material fact can be positive or negative.  For instance, being aware of the material fact that a large park and recreational facility will be built where a dump previously was is positive. 

An adverse material fact is one that negatively affects the property value whether real or perceived.  For instance, if one learned that a landfill was planned to be less than a mile away from the property, that would certainly decrease the value of what an appraiser would derived as well as how much the buyer would pay for the property.

Both types of facts are those that the buyer did not know and were not easy to discover.

Is FHA and VA separate from a conventional loan?

Yes.  A conventional loan is one where you put a considerable amount down and there are no special concessions made for your situation.  FHA and VA financing allow lower down payment and take into consideration special circumstances.

What are examples of a package mortgage?

A quick review of a package mortgage is one where the inventory or personal property carries a much higher value than the real property involved.

An example would be the store Tiffany's.  In this case the inventory - all of the jewels, gold, platinum and the such - is worth much more than the 1/4 acre the store sits on.  So it would be a "no-brainer" for a lender to lend money knowing that the personal property can be seized in the case of a default.

Another example would be a liquor store.  Consider the value of all of the international wines, the aged wines, the vodkas and so on.  As with Tiffany's, the products within the establishment would garner much more money than the improvement and land.

How/when/why would it come to pass that a buyer shall pay the difference in commission? In other words, why wouldn't seller pay full commission?

When negotiating the commission with in a buyer brokerage agreement, you will decide on a certain amount or percentage.  Now if the buyer decides that they really want a home that is being sold by the owner (FSBO) and the owner is not paying a commission, then the buyer would have to pay the commission as agreed upon in the buyer brokerage agreement.

Another circumstance could be that the seller agreed to a co-op fee that is lower than the commission agreed upon in the buyer brokerage agreement.  When this occurs, then the buyer could be responsible for paying the difference.  Remember that the seller has no obligation performing what is included in the buyer brokerage agreement.

Monday, November 20, 2017

What is the specific difference between an appurtenance, an attachment and a tenement?

Appurtenance - "runs with the land."  These are items and rights that belong to the land.  Example: when purchasing real property, there is no need to describe that the purchase includes the trees because they will be included unless the agreement indicates otherwise.

Attachment - generally thought of to be those items "attached" to the land such as fixtures.  Man-made attachments include buildings, fences, and walkways.  Natural attachments include trees, shrubs and perennial plants by people called fructus naturales.  Crops planted and cultivated by man are fructus industriales where the portion attached directly the land is real property and the crops produced are personal property.

Tenement - physical things affixed to the land such as trees, shrubbery, buildings, improvements and so on.  These items pass with the land when the real property is conveyed.  Tenements are attachments.

NOTE:  The other definition of "attachment" is a legal process where a person (defendant) is not allowed to transfer or do anything with their real or personal property while a lawsuit is in progress.  The purpose is to preserve items of value that can be liquidated once a suit is decided to cover the amount of a judgment.