Author: ft Editorial Staff

Agency confirmation provision

This article examines the use of the agency confirmation provision. The mandated agency confirmation provision Confirmation of agency by brokers and their agents is required to be made to all parties involved in a real estate transaction on one-to-four unit residential property, including sales, exchanges and leases of more than one year.   The agency confirmation by brokers is first made as part of the purchase offer. The agency confirmation by all brokers involved is first made as part of the purchase agreement offer, typically signed first by the buyer and then submitted to the seller. In practice, the agency confirmation provision exists in only one format: A pre-printed provision included in every purchase agreement form used in real estate transactions on one-to-four unit residential properties. [Calif. Civil Code §2079.17; See first tuesday Form 150, accompanying this chapter] The agency confirmation provision discloses the existence or nonexistence of each broker’s agency with the different parties to the transaction. The determination and declaration of the actual agency resulting from a broker’s conduct is made by each broker involved. Each broker states for which party he is acting as an agent for in the transaction. Thus, one broker need not disclose the agency relationship of any other broker involved in the transaction. For example, the buyer’s selling broker need not include the agency of the seller’s listing broker when he fills...

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Halloween safety guidelines

The following list of dos and don’ts for Halloween fun and safety was condensed from the information provided by the Los Angeles Fire Department (www.lafd.org/hween.htm) and www.halloween-safety.com.   For a more extensive review of how to ensure a festive but safe holiday for everybody, feel free to visit the above websites. Happy Halloween from all of us at first tuesday! Decorating and Activities Children may clean out the seeds from a pumpkin and draw on a face, but only adults should be in charge of carving, preferably with the aid of a pumpkin carving kit. Use battery-powered lights or chemical lightsticks inside of Jack o’ Lanterns or other decorations. When decorating the outside of your house, make sure that all walkways are clear. Also place Jack o’ Lanterns or any fire-lit decorations far from areas where children may be walking, to avoid any tripping or costumes catching on fire. Do not overload electrical outlets with decorative lights, and do not block any exit doors. Costume preparation Costumes should be bright or reflective. Consider putting reflective tape on dark-colored costumes and trick-or-treat bags to make them more visible at night. Make sure costumes are not made of flammable material. Eye holes in masks or in general should be large enough to allow good peripheral vision. Costumes and footwear should fit well enough to avoid tripping. Consider securing emergency information, such as...

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Hazard disclosures by the broker

This article discusses the use of the Natural Hazard Disclosure Statement. A unified disclosure for all sales In transactions involving the sale of any type of real estate, the seller’s listing broker owes a duty to a prospective buyer to disclose, along with any other facts that have a significant impact on a property’s value and desirability: the broker’s actual knowledge of any natural hazards affecting the value of the property; and information contained in public records concerning natural hazards. [Calif. Civil Code §1103(c)] If the seller has not listed the property with a broker, the seller must disclose any natural hazards known to him or contained in public records. The seller must disclose his knowledge of the natural hazards of his property’s location by use of a statutorily mandated form. Natural hazards come with the location of a parcel of real estate, not with its physical, environmental, title or use conditions. Natural hazards include: special flood hazard areas – a federal designation; potential flooding and inundation areas; very high fire hazard severity zones; wildland fire areas; earthquake fault zones; and seismic hazard zones. The existence of a hazard at the location of a property affects its value and desirability to prospective buyers since the hazard limits the buyer’s ability to develop, obtain insurance or receive disaster relief. In 1998, the California legislature created a form entitled the Natural...

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Arbitration: the independent beast

This article presents the adverse impacts created by agreeing to a binding arbitration clause in a real estate purchase agreement. Lost rights to a fair and final decision The trend since 1978, encouraged by trade unions, has been to agree to solve real estate contract disputes through arbitration, rather than litigation. The wisdom of this trend in real estate-related contracts is now under increasing attack. Many preprinted brokerage and purchase agreements include an arbitration clause. The arbitration clause is an agreement with an arbitrator, separate from the contract in which it is contained. [Prima Paint Corporation v. Flood & Conklin Mfg. Co. (1967) 388 US 395] To become part of the agreement, the arbitration provision must be separately initialed in the purchase agreement on the sale of a one-to-four unit residential property. However, the arbitration provision is enforceable against any individual who initials the provision even if the individual is the only party to initial it, and the provision does not become part of the final agreement. [Grubb & Ellis Company v. Bello (1993) 19 CA4th 231]   Arbitration does not often live up to its reputation for being inexpensive or expedient. Editor’s note – first tuesday’s purchase agreements and addenda do not contain either an arbitration clause or an attorney fees provision as a policy to reduce disputes by making them less economically feasible. An arbitration clause in...

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Trust funds overview

This article presents an insight into trust funds and their treatment. Identification of trust funds Brokers, while acting in their capacity as agents in real estate transactions, receive funds to be held in trust. These funds, called trust funds, include: deposits on offers to purchase and applications to rent or borrow; fees advanced for any brokerage services to be provided in the future; funds from sellers, borrowers and landlords as reserves to cover future costs; rental income and tenant security deposits; funding for a loan or the purchase of real estate; and proceeds from a sale or financing. Trust funds are received by a broker, or by an employee acting on behalf of the broker, as part of a transaction in which the broker is acting as an agent. Employees acting on behalf of a broker include sales agents, associated brokers, resident property managers and office personnel. Trust funds include any item or evidence of value handed to the broker or the broker’s employee while acting as an agent in a real estate transaction. Trust funds include any item or evidence of value handed to the broker in a real estate transaction. For example, a buyer enters into a purchase agreement. The buyer’s good faith deposit is in the form of a bag of gems which is handed to the broker. The dollar value of the gems will apply...

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