Posts Tagged ‘Arizona real estate lawyer’

2012 Legislative Bills Regarding Short Sale and Foreclosures

February 3, 2012

Three bills have already been introduced in the 2012 Arizona legislative session regarding short sales and foreclosures. All three bills are pro-borrower, and attempt to reduce or eliminate a borrower’s liability for a deficiency after a short sale or foreclosure.

The first two bills attempt to change the deficiency calculation as it relates to foreclosures of a mortgage loan by a lender that purchased the mortgage loan from the original lender. These two bills require that the starting point for calculating a deficiency is the amount paid to the original lender for the mortgage loan. For example, if a $100,000 mortgage loan on a vacant lot was purchased from the original lender for $40,000, and the vacant lot is now worth only $30,000, the deficiency after foreclosure under these two bills would only be $10,000, not $70,000.

Finally, following in the footsteps of a 2011 California law, the last bill attempts to eliminate any liability of the seller to the lender for a deficiency after a short sale.

Combs Law Group will continue to keep your advised of any new legislation in the areas of short sales, foreclosures and Arizona real estate laws.

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Inheritance Issues Can Play Role in Real Estate Title

February 3, 2012

A couple both have children from previous marriages. When they signed a contract to purchase a Tempe home, their real estate agent said that most spouses at the closing will take title to a home as “community property with right of survivorship.”

Do they need to take title in that manner if they want their children from prior marriages to get the home after they both die?

No. The term “with right of survivorship” used in community property with right of survivorship is a term of art meaning that the surviving spouse acquires the deceased spouse’s one-half interest in the property.Upon the subsequent death of the surviving spouse, only the children of the surviving spouse would have an interest in the home.

In this situation they would not want to hold title to the Tempe home as community property with right of survivorship. An Arizona real estate lawyer would suggest that the couple hold title to their home simply as “community property.” In that event, after the death of the first spouse, the children of the first spouse would own 50 percent of the home, and the surviving spouse would own the other 50 percent.

Furthermore, if they both want the surviving spouse to be able to live in the home during their lifetime after the first spouse’s death, they both should provide that in a revocable living trust or other estate plan that the surviving spouse would have a life-estate interest in the home.

After the surviving spouse dies, the proceeds from the sale of the home can be divided 50/50 among the children of the prior marriages.

Neighbors Must Keep Common Fence

February 3, 2012

There is a chain-link fence on the property line between two backyards in rural west Phoenix. The neighbor built block walls on the sides of their home and now wants to enclose the backyard with a block wall replacing the chain-link fence between the backyards.

The other neighbor is opposed to the block wall because the chain-link fence is in good condition, and the block walls give the feeling of being in a prison. The neighbor said that he would pay for the cost of tearing down the chain-link fence and building the block wall. Not being familiar with Arizona real estate laws, can the neighbors object to the building of this block wall?

The chain-link fence on the property line is a common wall. Both of people are responsible for the maintenance and repair of the chain-link fence. If the chain-link fence is in good condition, neither has the right to tear down the chain-link fence. Therefore, if the neighbor wants to build a block wall to enclose their back yard, they will have to build the block wall inside their property line.

New HOA Fees Law Effective December 31, 2011

February 3, 2012

Under this new Arizona real estate law HOAs may charge a homeowner no more than $400.00 as a fee for preparing documents related to the disclosures an HOA must deliver during the sale of a home. Additionally, the HOA may not collect this fee earlier than the close of escrow and may only charge the fee once to a homeowner for a transaction. A.R.S.§ 33-1260 (C, D); A.R.S.§ 33-1806 (C, D); SB1149.

There has been some confusion regarding whether this new law applies to transfer fees charged by an HOA on the sale of a home. Transfer fees can be thousands of dollars, and are frequently a percentage of the sales price of the home. Transfer fees are authorized by A.R.S.§ 33-442, which does not impose a limit on transfer fees.

The new law only specifically limits fees for HOA disclosure documents. Therefore, there is still no limitation on the amount of transfer fees.

In Chapter 13 Bankruptcy, Second Mortgage Can Be Removed

August 27, 2010

With record high home foreclosures and a slumping economy, homeowners are concerned about losing their homes and searching for options to keep from losing their home. Many people are being faced with the reality that their home has depreciated to the point that it is worth substantially less –in some cases half what they owe. Some cannot afford their mortgage, and others, when faced with the difficulty of continuing to pay on a home that is upside down, decide to walk away from the house.

Instead of just walking away from your home, a Chapter 13 Bankruptcy can keep you in your home, and, if you are paying on a second mortgage, can significantly reduce the amount you actually pay for your home. The Ninth Circuit Court of Appeals has held that the bankruptcy code allows, in situations where the value of the home is less than the amount owed on the first mortgage, the second mortgage can be “stripped” off, leaving only the first mortgage to pay. For example, if your first mortgage is $200,000, and you also have a second mortgage of $50,000, but your home is worth only $185,000, in a Chapter 13 Bankruptcy the $50,000 second mortgage can be stripped off, leaving only the first mortgage on the property.

In a Chapter 13 Bankruptcy you can also stay in your home and be given significant time (3-5 years) to get caught up on any payments you may be in arrears. In short, a Chapter 13 Bankruptcy can be a valuable tool in navigating these troubled financial times, especially in the area of residential real property and second mortgages. The Combs Law Group offers a free 30 minute consultation for bankruptcies.

Commercial Lease Might Not End With Foreclosure Sale

August 27, 2010

It was recently stated that a commercial property lease is terminated after foreclosure by the lender. A small real estate brokerage firm has two years remaining on their lease in a Tempe office building. As a result of the real estate slowdown, they wanted to move into smaller space. After the commercial property’s foreclosure sale by the lender they believed that their lease had been terminated. However the lender’s property manager disagreed and said that were now required to make lease payments to the lender as the new owner of the office building. The real estate brokerage firm’s attorney reviewed their commercial lease terms, and also said the language in the lease requires them to make lease payments for the next two years to the lender as the new owner of the office building. How can the lender as the new owner of the office building enforce language in a lease after the foreclosure sale terminated the lease?

In general, the rule in an office lease, residential lease, or any other lease, similar to other junior liens, is terminated at the time of the foreclosure sale by the lender. However, in many commercial projects, a lender will require language in the lease, or in a separate agreement, that the lease will be enforceable after the foreclosure sale, and that the tenant will then make the lease payments to the lender or other purchaser at the foreclosure sale. Similarly, a major tenant like Albertson’s or Home Depot that has a favorable lease because of their anchor tenant’s status will want similar language in the lease or in a separate agreement. These types of commercial lease provisions are generally enforced by the courts on the theory that the lender or other purchaser at the foreclosure sale is a third-party beneficiary of the language in the commercial lease.

Note: Since the May, 2009, federal law, residential tenants after a foreclosure sale are generally entitled to stay in the home through the end of the lease term, provided that the lease payments are made to the new owner. The residential tenant, however, is not required to stay in the home, and can move out after the foreclosure sale.

Enact a Power of Attorney for Selling an Arizona Home?

August 27, 2010

A pilot at Luke Air Force Base is being transferred to the Far East for at least a year. His family listed their Arizona home listed for sale, but the pilots wife is concerned that they will get a good offer on their home and her husband will be difficult to contact. It was suggested to the pilot’s wife that before her husband leaves to contact an Arizona real estate lawyer and execute a power of attorney to her so that she would have the authority to sign the deed to sell the home. What type of language is necessary in a power of attorney to give a wife the authority from her husband to sign the deed to sell the home?

Inasmuch as a title company will only record the deed to the buyer if the title company approves of the form of the power of attorney. The pilot’s wife should have their listing broker contact a title company for their approved form of a power of attorney. For example, a title company may require language in the power of attorney that the power of attorney can only be terminated by a recorded notice of termination by the husband. In any event, if her husband signs the power of attorney of the title company, there should be no problem in recording the deed to the buyer at closing.

Note: The power of attorney from her husband may be more important in accepting offers on homes as prospective buyers usually want quick responses to purchase offers. The power of attorney to sign closing documents like the deed, however, is not as important because closing documents can be sent by over-night delivery a few days before closing.