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Professional Standards: Avoid Deception When Altering Photos

Posted by Taylor Thompson in Blog, News, Uncategorized | 0 comments

This is t the latest is a series of occasional articles on “Professional Standards”  from Rick Snyder, NSDCAR Professional Standards Committee 2018 chairman.

By Rick Snyder

Technology is more important than ever in our real estate sales business. In our digital age, high-quality photos can help consumers personally tailor their home search. Indeed, listing photographs can be the most important part of the home sale listing. It’s true that buyers are relying increasingly on images of listed properties to make informed decisions and determine whether they are really interested in the home. Plus, photos can help REALTORS® save time so they give more attention to only their most serious buyers.

However, with a variety of today’s sophisticated photo-editing and enhancing software on the market today, ranging from the popular Adobe Photoshop to such others as Phase One Capture One, Serif Affinity, Cyberlink PhotoDirector and MacPhun Luminar, photos can be easily altered to portray a property as more attractive than it actually is. Retouching may seem innocent, but it can have a profound effect on the real estate business. REALTORS® should be warned that problems exist when you try to remove a tree, cracks on walls, utility lines, fire hydrants and satellite dishes that exist on the property, as well as enhance the landscaping.

This practice of REALTORS® altering photographs of properties with post-production techniques must be undertaken with care. There’s a difference between enhancing the quality of the visual images of the properties and altering the photographs that may result in a misrepresentation of the condition of the property. Photographs should accurately represent a property’s condition. The condition of the property is a material fact that affects the value and desirability of the property. The concept of misrepresentation must be understood and recognized by REALTORS® in the presentation of information relating to the listed property.

In fact, doctoring photos may be a violation of the National Association of REALTORS® (NAR) Standard of Practice. Using Photoshop software can land you in hot water with an ethics violation on your record.

I recently attended a NAR Professional Standards Committee meeting. We approved amendments to strengthen Article 12-10 utilizing the following language:

REALTORS’ obligation to present a true picture in their advertising and representations to the public includes Internet content, images, and the URLs and domain names they use, and prohibits REALTORS® from:

1) engaging in deceptive or unauthorized framing of real estate brokerage websites;

2) manipulating (e.g., presenting content developed by others) listing and other content in any way that produces a deceptive or misleading result;

3) deceptively using metatags, keywords or other devices/methods to direct, drive, or divert Internet traffic; or

4) presenting content developed by others without either attribution or without permission, or

5) otherwise misleading consumers, including use of misleading images.

Photo altering not only misleads consumers who rely on photos in the MSL or on websites, but damages the credibility and integrity of REALTORS® and our industry. REALTORS® have an obligation to present a true picture of the condition of property in their advertising and representations to the public. If the public loses confidence in the ability of real estate photos to tell the truth of a listing in an honest, straight-forward way, then we’re all discredited.

2018 Housing Forecast: Be Prepared and You Will Rock

Posted by Taylor Thompson in Blog, News | 0 comments

This year could be your best career year ever in real estate. That’s the message from an economist with the California Association of REALTORS® (C.A.R.). C.A.R.’s Jordan Levine recently delivered a “2018 Housing Market Outlook” presentation to Association members.

 “The economy is strong, unemployment is low, home prices are up and demand is still high as people still want to own their home,” said Levine. “We’re seeing demand from a variety of clients, ranging from millennials, babyboomers and immigrants to foreign investors and even gen Xers who want a bigger house. There are still many challenges and headwinds, but there’s still no reason why 2018 can’t be the best year ever for REALTORS®. Be prepared and you will rock.”

Levine noted that California’s unemployment rate of 4.1 percent in December was the lowest in more than 40 years. Also in year-over-year comparisons between December 2017 and December 2016, job growth increased 1.4 percent. The growth for specific industries included: Construction, 7.1 percent; Educational Services, 5.3 percent; Leisure/Hospitality, 3.8 percent; Healthcare, 2.8 percent; Management, 2.0 percent. “We’ve seen job creation reflect a good mixture of both high- and low-wage jobs. California is firing on most cylinders,” said Levine.

President Trump’s tax reform is expected to have its biggest affect on higher-end properties, said Levine. The reform caps mortgage interest deductions for primary and secondary residences at $750,000 (down from $1 million), while capping state and local tax deductions (SALT) at $10,000 (previously, there was no cap). Also, the corporate tax rate was lowered from 35% to 21%. Individual tax rates also are now lower at 0%, 12%, 22%, 24%, 32%, 35% and 37%. The standard deduction was doubled, to $12,000 and $24,000 for individuals and married couples, respectively.  The child tax credit also was doubled $2,000, with up to $1,400 being refundable, which means people could get money back if the credit exceeds what they pay in taxes. “With a much higher standard deduction, there’s less incentive for renters to own,” Levine said.

Regarding housing market trends, Levine said, “A tale of two markets continues to be the theme of California’s housing market with the lower end of the market bearing the brunt of the housing shortage. At the other end of the spectrum where inventory is less constrained, homes priced $1 million and higher are posting solid sales gains, especially in the $1.5 million-to-$2 million range. Also, prices have almost doubled since 2012, but active listings are down, continuing a four-year trend. Still, there’s been lots of action in the starter home market.”

In 2018, Levine said housing availability will remain a challenge. “Supply takes the blame, we’re dealing with a supply and demand mismatch,” he said. “Existing homeowners aren’t moving. We ended 2017 at the lowest level since June 2004. In 2018, shrinking inventory will continue to be a major factor shaping the 2018 housing market.”

Demand is expected to continue because clients will still be eager to buy real estate because home prices are appreciating and it’s a safe investment over the long haul. Other causes for demand including millennials need a home to raise their families, households formation is rising, flips of older properties will continue to provide returns and foreigners are still eager to own U.S. property. Plus, the economy is expected to steadily improve under the Trump administration. In January 2018, the median number of days a home in San Diego remained unsold on the market was 21 days, compared to 18 days in December 2017 and 25 days in January 2017.

Also in 2018, mortgage rates are expected to remain affordable, Levine said. “The 30-year mortgage rate may inch up to between 4.3 and 4.5 percent for a standard, 30-year loan in 2018, which is still affordable for many buyers,” he said. “The combination of higher home prices and higher interest rates means mortgage payments will be higher in 2018 for the same home, which means a decline in affordability. Rising rates will hurt and eventually hit, probably due to volatility in the stock market. Still, perspective is everything. When my dad bought a home in 1981, the interest rate was 15 percent.”

Levine said it’s important for REALTORS® to get involved in their local communities, especially with planning and land use groups. “We don’t build enough homes in California and planning groups need to realize this,” he said. “We need to play catch-up. We could use another 100,000 new units annually.”

Offer Presentations: Are you in Compliance?

Posted by Taylor Thompson in Blog, News | 0 comments

There has been a fluctuation of phone calls relating to the presentation of offers.  Selling Agents are calling to inquire about what can be done to confirm that their offer has been presented.  Does the Listing Agent have an obligation to prove that the offer was presented to the Seller?  The Code of Ethics does not require that the Listing Agent provide proof that the offer was presented.  Although the Code of Ethics doesn’t require the Listing Agent to provide proof  that the offer was presented, there is an obligation to present the offer to the Seller objectively and as quickly as possible.  This obligation is addressed in Article 1, Standard of Practices 6 and 7.   Article 1 When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve Realtors® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, Realtors® remain obligated to treat all parties honestly. (Amended 1/01). Standard of Practice 1-6 Realtors® shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95) Standard of Practice 1-7 When acting as listing brokers, Realtors® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. Realtors® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. Realtors® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease. (Amended 1/93)   To learn more about Article 1 and the REALTOR® Code of Ethics, click here

Housing Affording Slightly Improving

Posted by Taylor Thompson in Blog, News | 0 comments

Is housing affordability improving? What’s the overall affect after months of severe housing inventory shortages? According to the California Association of REALTORS®’ (C.A.R.) “Housing Affordability Index” (HAI), home affordability statewide improved only slightly in the fourth quarter 2017. In the fourth quarter of last year, C.A.R. said only 29 percent of California households could afford the state’s $550,990 median-priced single family home, up slightly from 28 percent in the third quarter 2017 but down from 31 percent in fourth quarter 2016. In San Diego County, only 26 percent of households could afford to purchase a median-priced home in the fourth quarter, which remained unchanged from the previous quarter. C.A.R. said it was the 19th consecutive quarter for its HAI index to be below 40 percent. Home affordability statewide in the 3rdQ 2017 dropped to its lowest level in a decade. California's housing affordability index hit a peak of 56 percent in the 1stQ of 2012. C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. The index is considered the most fundamental measure of housing well-being for homebuyers in the state. To afford the statewide median-priced single family home of $550,990, a household would need to earn $111,260 annually to make the necessary $2,780 monthly payments, according to C.A.R. The payment includes principal, interest, and taxes on a 30-year, fixed-rate mortgage with a 20 percent down payment and an effective composite interest rate of 4.17 percent. The effective interest rate in the 3rdQ 2017 was 4.16 percent and 3.91 percent in the 4thQ 2016. C.A.R. also said that the affordability of condominiums and townhomes also dipped slightly in the 4thQ. C.A.R. said 37 percent of California households earn the minimum income to qualify for the purchase of a $449,720 median-priced condominium or townhome, down from 38 percent of households who could afford to purchase the $446,800 priced condo or townhome in the 3rdQ. In the 4thQ, an annual income of $90,810 would be required to make monthly payments of $2,270. Meanwhile, on Friday morning, Feb. 16, C.A.R. released its January homes sales and price report. C.A.R. said January’s statewide median home price was $527,800, down 4.0 percent from December and up 7.3 percent from January 2017. In San Diego County, the median sole price of an existing single-family home was $590,000 in January, 2.5 percent lower than the $605,000 sales price figure for December 2017 and $550,000 in January 2017. In San Diego, the median number of days a home remained unsold on the market was 21 days in January 2018, compared to 18 days in December 2017 and 25 days in January 2017. C.A.R. said single-family home sales statewide in January 2018 totaled 388,000 on a seasonally adjusted annualized rate, down 7.6 percent from December (420,960 homes) and down 2.9 percent from January 2017 (400,580 homes). The month-to-month decline was the largest in more than two years. The 388,000 total marked the first time in nearly two years for California’s housing market to drop below the 400,000 level. In March 2016, the statewide sales figured dropped below 400,000. “A persistent shortage of housing inventory and continued affordability crunch is beginning to eat away at the market as buyers struggle to find available homes for sale,” said C.A.R. President Steve White. “A tale of two markets continues to be the theme of California’s housing market with the lower end of the market bearing the brunt of the housing shortage as sales of homes priced under $300,000 declined by 17.2 percent from a year ago,” said C.A.R. Senior Vice President and Chief Economist Leslie-Appleton-Young. “At the other end of the spectrum where inventory is less constrained, homes priced $1 million and higher posted solid annual sales gains, especially in the $1.5 million-$2 million range, which jumped 24 percent.” C.A.R.’s statewide home sales totals are based on information collected from more than 90 local REALTOR® associations and MLSs. In other recent real estate news, some housing analysts expressed a more positive outlook on the market, according to news reports. “If you look back at 2017, it was a robust year,” said Mark Goldman, finance and real estate lecturer at San Diego State University. “Interest rates were quite good, the economy was continuing to barrel ahead, wages were strong, employment was strong and millennials were aging into the homebuying market.” “The economy is solid, unemployment is low,” said Alan Gin, economist at University of San Diego’s Burnham-Moores Center for Real Estate. “People hear that housing prices are going up and they want to jump in before it gets out of hand even more.” Also, California was home to 13 of the nation’s 20 “hottest” housing markets in January, with San Diego ranking sixth, according to Realtor.com., the officials website of the National Association of REALTORS®. Realtor.com said the typical home was on the market just 46 days in San Diego, compared to 89 days nationally. In San Jose, the center of Silicon Valley, the market moved even faster with homes selling in 33 days.

Negotiation Tips: “That’s right” is better than “yes.”

Posted by Taylor Thompson in Blog, News | 0 comments

 By Chris Voss 

Everything in life is a negotiation. Sometimes, the stakes are quite low. Other time, people can feel like they have life and death on the line. During my 24 years with the FBI Crisis Negotiation Unit as lead international kidnapping interrogator, I used many different techniques in life-and-death negotiation situations. Let me share a couple of important words that REALTORS® can use when negotiating a transaction.

First, a common misconception is to want to hear the word “yes.” Our culture seems to have an addiction to hearing “yes.” However, if you want to be a great negotiator, stop your desperation for   “yes.” The problem with “yes” is that your client may think that you’re trying to get them to agree and they perceive it as a trap.

Instead of “yes,” let me emphasize the power of empathy, or what I call “tactical empathy.” Whether you’re dealing with threats to company assets, people or general business dealings, empathy is one of the most powerful tools. Listening for insight into your counterpart’s point of view can give you an opportunity to connect with them and change their mindset.

So, rather than “yes,” your goal should be to hear, “That’s right.” Those are magic words. When someone believes what you have said is the unequivocal truth,  their reply will be, “That’s right.” And they are confirming they feel empathy from you. It's the confirmation that you've met the objective Stephen Covey set out for us: “Seek first to understand, then be understood.”

If you can understand someone’s perspective so well that you can summarize it back to them to the point where they say “that’s right,” then you’ve laid a foundation for trust-based influence and a successful negotiation. Practice getting those two words in your conversations and I think you’ll be pleased with the results. For example, we used this technique during hostage negotiations with a terrorist in the Philippines. When the negotiator demonstrated his complete understanding of the other’s perspective, it entirely changed the terrorist’s mindset so dramatically that we were in a completely different negotiation.

Another word that can powerfully change negotiations is “fair.” It’s so powerful that I call it the “F-word.” As human beings, we’re swayed by how much we feel we’re being respected. Human beings need to feel they’re being treated fairly. People will sign the agreement if they feel they’ve been treated fairly, but they will lash out if they don’t.

A decade of brain-imaging studies has shown that human neural activity, particularly in the emotion-regulating insular cortex, reflects a degree of unfairness in social interactions. Even non-human primates are hardwired to reject unfairness. In one famous study, two capuchin monkeys were set to perform the same task, but one was rewarded with sweet grapes while the other received cucumbers. In response to such blatant unfairness, the cucumber-fed monkey literally went bananas.

However, be careful when you use the word “fair.” One of the most destructive ways to use the word is to say, “I only want what’s fair” or “we just want what’s fair.” It’s a judo-like defensive move that will destabilize the other side and break rapport. It is a harmful form of manipulation. For example, think back to the last time someone made this implicit accusation of unfairness to you, and I bet you will admit that it triggered feelings of defensiveness and discomfort. These feelings are often subconscious and can often lead to anger.

Another way not to use “ fair” is to say, “this is a fair offer” or, “we’ve given you a fair offer.” When someone says this, it’s basically accusing someone of being dense or dishonest. It’s a jab that distracts your attention and manipulates in ways that end up being harmful to the relationship.

If you find yourself in this situation, the best reaction is to simply mirror the “F” that has just been lobbed at you. “Fair?” you’d respond, pausing to let the word’s power do to them as it was intended to do to you. Follow that with a label: “It seems like you’re ready to provide the evidence that supports that,” which alludes to opening their books or otherwise handing over information that will either contradict their claim to fairness or give you more data to work with than you had previously. Right away, you have declawed the attack.

The best way to use the word “fair” is by saying, “stop me if any of this sounds unfair.” This way is positive and constructive. It sets the stage for honest and empathetic negotiation.

Here’s how I use it: Early on in a negotiation, I will say, “I want you to feel like you are being treated fairly at all times. So please stop me at any time if you feel I’m being unfair, and we’ll address it.” It’s simple, clear and sets me up as an honest dealer. With that statement, I am letting people know it is okay to use that word with me if they use it honestly. As a negotiator, you should strive for a reputation of being fair. Your reputation precedes you. Let it precede you in a way that paves success.

 Chris Voss is the founder and CEO of the Black Swan Group and author of “Never Split the Difference: Negotiating As If Your Life Depended on It.”

2018 C.A.R. Reports

Posted by Taylor Thompson in Blog, News, Uncategorized | 0 comments


C.A.R. Business Meeting Report

Monterey, January 2018 The California Association of REALTORS winter meeting was held in Monterey.  Sixteen NSDCAR members represented you in the CAR decision making process.  Raylene Brundage of Pacific Sothby's, serves as the Region 29 Chair heading your NSDCAR contingent, and David Cabot of Cabot & Cabot Consulting, LLC, serves as Assistant Chair.  The C.A.R. Directors are contributing their time on your behalf to attend the C.A.R. business meetings.  Their reports follow, along with the name of the committee member and his or her e-mail address.  Please feel free to contact any of these members for additional information, CEO Rich D’Ascoli (Rich@nsdcar.com), or Government Affairs Director Ernie Cowan (ernie@nsdcar.com) - or phone us at the Association’s Administrative Office (760) 734-3971.


CalDRE FORUM FEDERAL ISSUES FORUM ON FORMS GLOBAL REAL ESTATE FORUM HOUSING AFFORDABILITY HOUSING COMMITTEE – Home Ownership INVESTMENT HOUSING LAND USE & ENVIRONMENT COMMITTEE LEGAL ACTION FUND LEGISLATIVE COMMITTEE LOCAL GOVERNMENT RELATIONS MEMBERSHIP COMMITTEE MLS POLICY PROFESSIONAL STANDARDS REALTOR® ACTION FUND RISK MANAGEMENT AND CONSUMER PROTECTION STRATEGIC PLANNING AND FINANCE COMMITTEE TAXATION & GOVERNMENT FINANCE TRANSACTION & REGULATORY OTHER INFORMATION OF INTEREST     Section 1 CalDRE FORUM Marie Jebavy, The Real Estate Consultants (760) 212-9193 marie@mariejebavy.com Where agents get caught! Rick Long, Enforcement for the DRE, presented the top problems: Negligence, Misrepresentation, Trust Fund (you can’t use a debit card), and Advertising, Did you know an unlicensed assistant cannot give out price or anything that requires a license? Using an unlicensed assistant improperly is another big problem area. Below is the link to the guidelines that you as the agent, or Broker are held too. These are the updated guidelines for 2018. Don’t take a chance and know what you are supposed to do. http://www.dre.ca.gov/files/pdf/adv/Guidelines%20for%20Unlicensed%20Assistants%20-%20Up dated%202018.pdf The link below is to slideshow with information regarding number of licensees, legal, changes to the name BRE now DRE as of July 1st, 2018 don’t worry that don’t care if you have BRE, CalBre, Cal# or license #, just as long as your license number is on everything that has your name on it. That includes, For Sale Signs, Open House Signs, business cards, text, emails any kind of advertising. http://www.calbre.ca.gov/files/ppt/BRE_Forum_January_2018_Monterey.pptx Top Section 2 FEDERAL ISSUES Chris Osteen, Cal West Management (760) 519-2609 Chris@CalWestrmgmt.com The Federal Committee met on Wednesday, January 17th from 4:00 PM to approximately 5:00 PM. Candidly we spent most of the meeting discussing Tax Reform, however Investment Housing did bring us a motion to establish an educational program to educate our membership on the Costa-Hawkins Rental Housing Act. There were concerns in Investment Housing  that many REALTORS® may not know what the Costa-Hawkins Rental Housing Act actually does. The Act, which was passed in 1995, exempts new construction and single family dwellings from local rent control and prohibits vacancy control (AKA “strict rent control”). We were recently successful in defeating AB 1506 in committee. AB 1506 would have repealed the Costa-Hawkins Rental Housing Act. Unfortunately the story doesn’t end there. A proposed statewide ballot initiative is attempting to gather signatures to qualify the issue for the November 6, 2018 ballot. TAX REFORM First a couple of important links: www.carorg/riskmanagement/tools Look for Tax Cuts & Jobs Act. www.nar/realtor/tax-reform/the-tax-cuts-and-jobs-act In a nutshell here are some key provisions of the Tax Cuts & Jobs Act.
  • Mortgage interest deductions (after 12-14-2017) are capped at $ 750,000.00.
  • Home Equity Loan interest is no longer deductible unless used to improve the property.
  • State & Local tax deductions are capped at $ 10,000.00.
  • Standardized deduction is increased to $ 24,000.00 per couple.
  • Capital Gains for housing exclusions were largely maintained if you lived in property two out of the last five years.
  • $ 4,150.00 deduction for dependents is gone.
  • Commercial Real Estate
Section 175 deductions are increased to $ 1,000,000.00 from $ 500,000 and the definition of qualified expenses was expanded. 2018 appears to be a very heavy legislative issues year. I also serve on Local Government Forum and the Investment Housing Committee and the number of challenges to the real estate industry is significant. Stay tuned and be involved. Top   Section 3 FORUM ON FORMS Chris Hasvold, Coldwell Banker Village Properties (760)728-8000 chris@cbvillage.com Members were reminded of the new and revised forms that were published on December 15, 2017. While all members should already be aware of these forms I have provided a list for your review. Details and explanations of each can be found on CAR’s website at – https://www.car.org/zipform/standard-forms/summary-forms-releases-chart/December-2017-Forms-Release. New Forms • AEA – Amendment of Existing Agreement Terms   • PIA –  Property Images Agreement   • TEAM – Team Agreement    Revised Forms • BRE – Buyer Representation Agreement – Exclusive • BRNE – Buyer Representation Agreement – Non-Exclusive • BUO – Back-Up Offer Addendum • COP – Contingency for Sale of Buyer’s Property • HOA2 - Charges for Required Documents  • MHPA – Manufactured Home Purchase Agreement and Joint Escrow Instructions • NBP – Notice to Buyer to Perform • PSD - Parking and Storage Disclosure • RFR – Receipt for Reports • SIP – Seller License to Remain in Possession Addendum • SPRP – Seller’s Purchase of Replacement Property • SWPI – Septic Inspection, Well Inspection, Property Monument and Allocation of Cost Addendum • WFA – Wire Fraud and Electronic Funds Transfer Advisory There was also mention of three new forms slated for the June 2018 release: POSA – Storage of personal property before COE SEIQ – Like the SPPQ but for common interest developments BHHA – Like the SBSA but only related to HOA’s Top   Section 4 GLOBAL REAL ESTATE FORUM Lisa Fore, Barbara McLain Properties (760) 434-6161 lfore@barbaramclain.com Would you be surprised to know that there was a total of $153 billion dollars in real estate sold to foreign buyers in 2017?  While that may or may not seem like a large number to you, it may be more surprising to know that number represents a 49% increase in real estate sold to foreign buyers from 2016 to 2017. One out of every 20 transactions is a foreign buyer. Nearly half are using it as a primary residence and 18% as an investment property.  They are contributing the increase of foreign buyers to the strong currency in our dollar.  Below are some statistics to help you understand the global real estate market within the US. So, which are the top states seeing the most foreign buyer?
  1. Florida, at about 22% of all foreign buyer purchases is by far the most popular
  2. Texas and California, both at about 12%
  3. New Jersey and Arizona, both at about 4%
  4. Illinois, Georgia, and North Carolina, all at about 3%
Where are most of the foreign buyers coming from?
  1. China (the number of Chinese buyers has doubled in the past 10 years)
  2. Canada
  3. UK
  4. Mexico
  5. India
Median Sale Price by Country of Residence:
  1. China (over twice the price of the typical American buyer)
  2. India
  3. UK
  4. Canada
  5. Mexico
You may or may not have had the opportunity to work with a foreign buyer, but given the fact we have seen a 49% increase in the last year of foreign buyer transactions means that it is only a matter of time before you do.  In an effort to help you bring value to your clients you should know that many of these foreign buyers can pay a premium of up to 10% in foreign exchange fees on top of what they are already paying for a property, and that the transfer of their funds can often times take a minimum of 5 days. We had a representative from a company called Money Corp stating that not only are they able to facilitate more expedited transfers, they only charge 1% or less in exchange fees saving your clients both time and money. Top   Section 5 HOUSING AFFORDABILITY Elyse Dittrich, Nancarrow Realty Group (760) 505-3740 elysedittrich@gmail.com Housing Affordability Fund Report Key Takeaways:
  • What do we do at the Housing Affordability Fund?
  • Find out about a grant funded in January to help the fire victims of the Cascade Fire.
  • Why it benefits your clients and your business if you donate to HAF.
Have you ever heard of the Housing Affordability Fund (HAF)? Here is our mission statement: The CALIFORNIA ASSOCIATION OF REALTORS® Housing Affordability Fund plays an active role in addressing the ongoing housing affordability crisis facing our state. H.A.F. will raise and distribute funds in partnership with local associations and other groups to promote housing and homeownership. You may have previously heard about the California statewide grant program, which assisted first time homebuyers with up to $2,500 towards their HOA dues. It was a huge success! Our HAF committee collaborates all year, and we work together to fundraise money, come up with grants, and approve grant applications from local associations that can be used to help the people of CA. In Monterey this we were excited to approve a grant for Yuba County, which was effected by the Cascade Fire in October of 2016. The beneficiaries of the program are those fire victims that owned their land and have lost their homes in the fire with little or no insurance. The grant will be awarded up to $3,000 per application, which would assist in permit fees and mandatory water tanks, which are now required before re-building a new home. We’re excited for the success stories! HAF needs your donations to keep these programs going. HAF programs are meant to help our clients make home ownership a possibility and/or ease the financial burden of buying a home. The more money HAF has/is donated, the more programs we can sustain, the more clients we can help, and the more business we’ll do! It’s a win/win all around. At NSDCAR we make it easy to donate! Every time you pay your dues there’s a line item (option) where you can contribute to the HAF. As a committee we also have two fundraiser events a year and CAR has been really supportive as well. We’re looking forward to our Casino-Karaoke event in Sacramento in a few months! Top Section 6 HOUSING COMMITTEE – Home Ownership Raylene Brundage, Pacific Sotheby’s 858-735-8787 – RayleneBrundage@gmail.com The overall message and emphasis of The Home Ownership Committee continues to be unaffordable housing and potential solutions.  C.A.R. is looking for every opportunity to have an impact on this problem.  There was one action item the committee passed by the general Director body:   That C.A.R. “SPONSOR” legislation to expand the Housing Accountability Act to include accessory dwelling units and that the Department of Housing and Community Development be reimbursed by local governments for the costs associated with enforcing state law. This proposal is intended to overcome the objections (not legally grounded) that have been utilized to deny accessory dwelling units such as granny flats, etc., which are a solution for some housing shortage situations. Click Here for more information from C.A.R. on the initiative. Top Section 7 INVESTMENT HOUSING Lisa Fore, Barbara McLain Properties (760) 434-6161 lfore@barbaramclain.com This winter’s meeting has opened eyes and brought forth a fear that rent control could soon be a reality across our entire state.  Currently there are only 15 cities in California with rent control; however, with a state that is fast approaching a tenant majority and heavily funded tenant advocacy groups you are likely to see more local municipalities adopting rent control ordinances. Rent control restrictions are created by local jurisdictions; however, the restrictions brought forth by city governments are limited by what’s called the Costa-Hawkins Rental Housing Act, which was enacted in 1995.  There are two main provisions:
  1. It exempts single family dwellings, and new construction     
  2. It prohibits vacancy control, also known as “strict” rent control
Costa-Hawkins does not affect caps on annual rent increases; this is left to the local municipality. It was primarily enacted to rein in the rent control ordinances that were implemented in a handful of California’s major cities.  Those cities had what’s called vacancy control.  This is when the local municipality restricted the owner’s right to raise the rent to market rate on a unit once a tenant voluntarily moved out, or is vacant by just cause eviction. AB 1506, a proposed statewide ballot initiative that would repeal the Costa-Hawkins Rental Housing Act, was cleared for circulation by the Secretary of State’s office, and proponents have now begun the petition to qualify the initiative for the November 6, 2018 ballot. In 1980 San Diego voters rejected proposed rent control initiatives.  As California’s housing shortage becomes an increasing issue, and we are fast becoming a tenant majority state, legislators are finding it easier to look towards rent control as being a solution for our housing issues, as well as a way to appease the masses. While rent control in theory may seem like a solution it creates a stagnant market place where renters become less likely to move because they do not want to walk away from below market rent, property owners stop putting money into their properties, and investors don’t see the value in California’s real estate.  This ultimately puts an even higher premium on available housing.  For the small percentage of disadvantaged people rent control helps, there is a much larger percentage of people that are taking advantage of these laws. It would seem there may be a better solution in a tax credit, and/or more funding for housing assistance to disadvantaged families.  One example brought forth in our meeting was the niece of one of our committee members living in a beachfront apartment under rent control, paying about $500/month.  A person making $300,000 a year who could afford to buy a home, and/or pay much more in rent, has a hard time giving up their apartment because they are saving so much money each year. There are many reasons to be concerned if Costa-Hawkins is repealed.  This could worsen our statewide housing shortage and scare off developers who already face extensive time delays and heavy fees on already expensive land.  A developer in California can easily sit on a piece of land for 10 years before they can break ground while navigating their way through every requirement that a local municipality can place on their ability to build, as local legislator’s attempt to appeal to voters.  These same developers can go to states like Colorado and break ground in about 2 years.  Our state is only building about 100,000 homes each year, compared to 300,000 homes 10 years ago, and we are growing at twice the previous rate.  A 2016 report from the Legislative Analyst’s office found that expanding rent control “likely would discourage new construction” by limiting the profitability of new rental housing. C.A.R. is moving forward with a state education campaign that directs local Associations of REALTORS® to proactively inform and engage REALTORS® and their residents, constituents, and property owners on rent control and the Costa-Hawkins Rental Housing Act.  Please be on the lookout and help use C.A.R.’s campaign to educate those around you. Top Section 8 LAND USE & ENVIRONMENT COMMITTEE Ron Romanowich, Heritage Realty & Financial (760) 644-2575 – ronroman007@earthlink.net The Committee reviewed a number of current and revisited Assembly and Senate Bills that have a significant impact on current and future Homeowners, Builders and Developers, but also how Californians Bundle of Rights are affected by the passage of these Proposed and Passed Bills. PROPOSITION PENDING: SB 5(Chapter 852, Statutes of 2017)- De Leon. California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access for All Act of 2018.   This ballot proposition was passed by the Legislature in fall of 2017 to qualify for the November 8, 2018 General Election Ballot. The measure authorizes $4 billion in general obligation bonds to fund a variety of items, including water projects, combating climate change, expansion of outdoor activities for disadvantaged communities, flood control and coastal protection projects in various areas of the state. It also redirects $100 million in previously authorized funds for unissued water quality, supply and infrastructure bonds related to Proposition 40 (2002), Proposition 84 (2006), and Proposition 1 (2014). The Committee had serious discussions about how in some cases Bond Funds have not been allocated to the projects or uses that they were intended to have been used for and the importance of the Public being aware of how the $4 Billion is going to be allocated if the of this Bill is passed in the November Election. AB 1156 (Tiny) Planning and zoning: housing element.  This bill expands the current requirement that local governments include in their housing element analysis, and its’ documentation of the household characteristics including documentation of the percentage of residents who pay more than 30% and 50% of their income towards the cost of housing.  The progress in meeting regional housing needs, the number of housing units at each income level remaining to be accommodated within the planning period, and an update to the inventory of land suitable for residential development. C.A.R. Supports this Bill. Sea Level Rise Guidance Document - Currently, the Coastal Commission's Sea Level Rise Policy Guidance Document is being updated specifically to address housing. The Draft Residential Adaptation Policy Guidance document was open for comments from July 28 through September 15, 2017. C.A.R. submitted comments regarding new definitions, mapping and zoning, real estate marketing and disclosures, assumption of risk and liability, remodels and repairs, shoreline protective devices, and numerous onerous new requirements to redesign and/or remove homes along the coastline. The document will be before the Coastal Commission for adoption in early 2018. C.A.R. Is Opposed to this Bill Unless it is Amended. National Flood Insurance Update -The National Flood Insurance Program (NFIP) requires Congressional authorization. The House recently passed "The 21st Century Flood Reform Act to reauthorize and reform the National Flood Insurance Program," which reauthorizes the NFIP for 5 years and makes several changes to the existing program. C.A.R  Is in Support, however the House has passed its Flood Reform Bill, but the Senate has yet to take action AB 1117 (Fong) California Environmental Quality Act.   This bill is a comprehensive CEQA reform proposal that is aimed at minimizing litigation abuse by increasing transparency and  closing loopholes that allow document dumping, extending relief mechanisms that are provided to sports stadiums, and to all other projects, and requiring courts to consider whether a lead agency made a good faith effort to comply with CEQA and otherwise substantially complied with the law. C.A.R  Supports this Bill SB 697 (Stone) regarding  Land Use Development Fees, this Bill would Forfeit the legal right of a local government to collect development and impact fees if the local government fails to comply with annual reporting requirements for more than two consecutive years. This Bill would ensure that failure of local government compliance would not result in a Building Moratorium. Both of these Bills would help alleviate the roadblocks that anyone attempting to Build, Remodel or Reconstruct are encountering. AB 1383 (Fong) California  Global Warming Solutions Act of 2006. Regulations - Greenhouse gas (GhG) reduction targets can pose significant burdens on critical industries, families, small businesses and local economies in this state. This bill will ensure that the California Air Resources Board work with the regulated community to identify and address  technical, market, regulatory and other challenges and barriers in implementing regulations to reduce GH Gases. Top Section 9 LEGAL ACTION FUND Carolyn  D’Agosta, Carolyn D’Agosta & Associates (760) 839-0480 cdagosta1@aol.com These are the most recent Legal Action Fund Trustees approved filing amicus briefs since the May 2017 meetings. The First Case: Laymon vs.J. Rockcliff, Inc.. A California Court of Appeal compelled arbitration against a seller who sought disgorgement of commission paid to a broker. The case involved the interpreted arbitration clauses in a prior C.A.R. Residential Listing Agreement and RPA agreements of, 2007and 2010. C.A.R. requested the publication of this case since it favored enforceability of arbitration clauses and reinforced the public policy supporting such broad interpretations. The Court granted the petition to publish the case. Second Case:  Jacques Jacobs et al. vs. Coldwell Banker Residential Brokerage Co. A potential buyer was viewing a property that had multiple warnings posted about an empty swimming pool. The plaintiff fell into the empty swimming pool after standing on a defective diving board to look over the fence. The injured plaintiff sued the listing agent. After review of the matter the Court of Appeal ruled in favor of the listing agent, who had posted multiple warnings about the potentially dangerous condition. The Court reasoned the action of the plaintiff and risks were not foreseeable. C.A.R. requested publication of the case, which was granted. Third Case:  Citizens for Enforcement of Parkland Covenants vs. City of Palos Verdes Estates. The City held property in a uniquely structured homeowner association. Its' Board of Directors decided to sell land to a private party contrary to the CC&Rs. C.A.R. filed an amicus brief supporting the enforcement of the CC & R's, which required processes and voting before selling the land. Fourth Case:  Carol Gilbert, Inc. vs. City of San Francisco Ellis-0'Farrell Parking. This case involved the enforceability of a commission when a final agreement was not entered into but where a tenant that was ready, willing; and able to complete the lease. The court held the commission agreement was enforceable and, if published, this case could have provided guidance after the 2012 RealPro case, which held that the sales price specified in the listing agreement was merely an invitation to submit offers, and a broker who brought the seller a full price offer, was not entitled to commission. C.A.R. wrote a letter brief requesting publication, but the Court declined to publish this case. Fifth Case: Surfrider Foundation vs. Martins Beach.  C.A.R. had previously joined an amicus brief submitted by Pacific Legal Foundation in a case in which the California Coastal Commission determined that putting a gate on a beach access path requires a development permit.  The public had been using the path for beach access.  The Appellate Court ruled that locking a gate and removing signs about the hours a private road is open, requires a permit as a "develoment", under the Coastal Commission Act.  The Trustees authorized joining the Pacific Legal Foundation's Brief or filing their own letter of support of the Martin's Beach's petition to obtain a hearing before the California Supreme Court. Top Section 10 LEGISLATIVE COMMITTEE Bob Pahlke, Berkshire Hathaway Home Services (760) 846-2400 Bob@BobPahlke.com This committee heard from several lead committees on pending bills and initiatives for California. One of the biggest issues was the impending initiative to repeal Costa Hawkins, the law preventing extreme rent control rules from municipalities. The repeal failed in committee so the legislature has started an initiative to be placed on the November ballot this year. CAR feels that they will get the required signatures and it will be on the ballot. If this initiative qualifies for the ballot CAR will fight it vigorously. There is also an initiative being proposed to bring split roll to November’s ballot. Creating a split roll property tax system would put costly burdens on commercial properties by reassessing commercial sales at a much higher rate. This in turn would cost Californians and visitors dearly with everything they purchase as commercial rents would increase greatly. Business owners would have to pass costs along to the consumer or possibly fail and close. This will be a challenge if it qualifies and CAR will fight this hard as well. Top Section 11 LOCAL GOVERNMENT RELATIONS Bob Pahlke, Berkshire Hathaway Home Services (760) 846-2400 Bob@BobPahlke.com The CAR sponsored Tax Portability initiative to expand Prop 60 has gathered over 260,000 signatures so far. If passed it would give property owners over 55 the ability to transfer their property tax basis to any county in California. It would also permit an owner to buy a higher priced property and use the exemption as many times as needed. This is a win/win for 55 and older homeowners and cities and would create approximately 41,000 more real estate transactions statewide. Even though cities would make more revenue from increased re-sales and prices, the objections will still come from the public service sector so CAR will try to educate as much as possible. Some of the additional challenges CAR faces include rent control ballot measures in Long Beach, Pasadena and Santa Barbara. In Monterey an active citizens group, CAVE, which we think stands for Citizens Against Virtually Everything, have managed to convince the city to put a moratorium on water meters thus halting all construction. Santa Barbara and Pasadena face point of sale county property inspections to make sure sellers have the correct permits in order to transfer the property. The local real estate associations have filed lawsuits against the cities for violating the 4th amendment- unlawful search and seizure. Stay tuned!! And in the tiny community of Pacifica, the city and coastal commission have proposed that beachfront homeowners should pay for sand replenishment of the beaches after erosion occurs. BTW- all coastal commission members live inland!! You can’t make this stuff up folks!! Top Section 12 MEMBERSHIP COMMITTEE Nancy Layne, Windermere Homes and Estates (858) 361-8713  nancylayne59@gmail.com How can the membership committee change to help you better? The Membership committee sunsets this year but may come back with a new name and mission: how to better serve our members and get information to them. Did you know there are 182 Member Benefits – what are they? Beyond just free education and lots of discounts and widgets, C.A.R. is focused on helping its members stay top of mind and prove their value. For example: Learning how to deal with Zillow, Redfin and others. Facebook just changed their algorithm, which will change the way we interact on that site – How C.A.R. can help with RPR, training, all sorts of benefits which can improve our business. Check out member benefits at C.A.R. to see for yourself! Go to www.car.org and see the drop-down arrow at "Your CAR", click on "Member Benefits" and explore away!   Top Section 13 MLS POLICY Chris Hasvold, Coldwell Banker Village Properties (760)728-8000 chris@cbvillage.com IDX Rules re: sold data That, upon final approval by NAR, the C.A.R. Model MLS Rules be revised to adopt NAR’s mandate to expand brokers’ entitlement to the amount of sold information they can get from IDX (from current 3 years to all sold data from 2012 to present). This motion was approved. Remote Orientation The motion requires that any mandatory MLS orientation class must be offered remotely (webinar, recorded or live) rather than exclusively live classes. This motion was also approved. Non-Action Item While this next topic was not an action item, and may not be for some time given the complexity of the topic, there was ample, intelligent discussion on the pros and cons of allowing submission of comp-only listings. These are listings that were not originally submitted to the MLS (FSBO, pocket, etc.) but would be submitted as closed sales for comp purposes only. Below is an abbreviated list of the pros and cons that were mentioned: Pros: The more robust the data in the MLS the more it empowers participants and subscribers. If our goal is to truly offer the most complete data set in the industry we should want to include these sales. Cons: There is a risk that allowing such an opening for reporting non- MLS transactions my dilute the value of MLS submission. Example - participant-subscriber sells a FSBO Point 1- if you allow this type of entry do we need to make sure we get enough data to make it a real comp, otherwise it’s just an agent bragging about his/her numbers. Just entering 3 bed 2 bath sold for $800,000 does not help without including pictures and a description of the property to ascertain the condition of the property. And in doing so, how much information would be required? Point 2- if agent sells an off-market property, does that agent need to get permission from the new owner to put in the MLS since there was no listing agreement authorizing the agent to input that information. A CAR attorney thinks we need to get written permission from the new owner. What if the new owner won’t allow all the information we would require? Point 3- some participant agents are currently removing most of the pertinent information but one picture when their listing sells so there would need to be changes made to rules now to prevent that to be consistent with point 1. Top Section 14 PROFESSIONAL STANDARDS Rick Snyder, R.A. Snyder Properties 619-793-4002 Rick@rasnyder.com There was considerable discussion and concern expressed regarding digitally altered photographs of listings in the MLS, not accurately representing the property.   There was one action item the committee passed by the general Director body:
    1. That C.A.R. make a formal request to N.A.R. to revise the Code of Ethics so that REALTORS® acting as listing brokers, upon the request of a cooperating broker, will be required to submit written verification to the cooperating broker that an offer has been presented to the seller or written verification that the seller has waived the obligation to have offers presented
Top Section 15 REALTOR® ACTION FUND Nancy Layne, Windermere Homes and Estates (858) 361-8713  nancylayne59@gmail.com The Realtor Action Fund should really wear a superhero cape. This little-understood giant has been a force for good for generations, and it’s time it gets recognition. Whenever someone says “We ought to do something…” the Realtor Action Fund is who they’re talking about. All of those fights over sign regulations, rent control, and other issues which affect the Realtor community rely on the Realtor Action Fund to help our voices, and those of our clients, be heard - and heeded.  As an example, we’re already over 30% of the signatures needed to get the Tax Portability issue on the ballot, and if it passes, that will be a help to many property owners throughout the state.  Your donations to this amazing fund help protect our business and property rights, and we’re even putting the FUN in fundraising!  This year’s contest deadline is Sept 7th. There is a Realtor Action Fund team at each local Association of REALTORS® and we want to be the best! We are aiming for 20% Voluntary REALTOR® Action Fund participation -  The current contests are Battle of the Associations, Highest participation and Highest per contributor while reaching an additional 2% REALTOR®  Action Fund contribution over 2017. Why is this important? Because 30% of the money raised by REALTOR®  Action Funds stay local at each association and can be utilized for local concerns and political action. Let’s grow this!  Top Section 16 RISK MANAGEMENT AND CONSUMER PROTECTION David Cabot, Cabot & Cabot Consulting, LLC (858) 245-2929 dmcabot@icloud.com We had an excellent and detailed presentation by Shannon B. Jones, a noted real estate attorney in Southern California. Disclosure Issues
  1. Granny Flats: This new legislation signed by Governor Brown is designed to encourage the construction of “mother in law” units on existing properties in the hopes of increasing affordable housing options in California.  However, some cities are charging enormous fees and thus discouraging homeowners from taking advantage of the law.  The disclosure issue for the units is primarily concerned with having adequate permits and inspections of the units.
  1. Creeks: Be aware that there are often restrictions on any updates or changes to properties that have a creek on or near it.  In addition there are always the concerns of flooding risks.  
  1. Water Intrusion and Drainage Issues: This is always a disclosure issue and home inspectors often call it out.  Be sure your clients (buyers) read the “Buyers Advisory” concerning this.
  1. Roots: Older properties tend to have an issue with roots impacting the sewer systems.  In particular this can be an issue for Septic Systems.  Always advise you client in writing to have a septic inspection.
  1. Flipping:  Investors often do cosmetic work on a property they have purchased for a quick resale.  The issues usually revolve around the lack of permits and much of the work being done by a handyman in excess of $500, which is a violation of state law.  
  1. Buyer Material Issues:  This is a standard CAR form that you should always use to insure that everything that is important to your client (buyer) is provided to them prior to the close of escrow.  
Agent Trouble Area
  1. Buyers Purchasing a Property Sight Unseen:  Clearly this can be a significant problem and lead to litigation.   It is not a good practice even though we are seeing more and more of this.  
  2. Deposit Disputes: This should be between the buyer and the seller.  Agents should not get involved in these.
  1. Verifying Buyer’s Ability to Purchase: Tools to do this are in the RPA and should always be used.
  1. Parties Signing for Each Other:  Occasionally you may have clients in which one client will sign for their partner or spouse who may be unavailable at that moment.  This should never occur.  Be sure that your clients, when there is more than one, have separate email accounts so that each of them will get the documents that need to be signed, independent of one another.
  1. Transmitting Key Document by DocuSign:  This is a convenient way to get your clients initials and signatures on documents when you are not physically present with them.  The concern and danger is that they will not read what they are initially or signing.  A good practice would be to send them the entire document for their review prior to sending it for initially or signing.
  1. Handling of Emails and Texts: Anything that relates to a transaction should be retained and in the Broker File.
  1. Burglaries During a Showing: This is becoming more and more common so the best practice is to have a second agent with you whenever you are showing a property.
  1. Social Media:  Use your discretion when posting or commenting on anything in social media.  It lives forever and reflects on you and your company even when you think it is private.
  1. Security Cameras: These are more and more popular and since many of them have audio as well, you should caution the client(s) who are viewing the property to express their thoughts about the property after they are no longer inside.  Additionally, it is illegal to record someone (audio) without their permission so if you seller wants to have audio and visual recording of everyone that sees the property they must display several signs in the property notifying anyone who enters that they are being recorded.
    1. Fire Coverage:  At the outset of any transaction, have your buyer confirm that they able to get adequate fire insurance for the property.  Do not wait under escrow is ready to close to confirm this.
Top Section 17 STRATEGIC PLANNING AND FINANCE COMMITTEE Kim Murphy, Murphy & Murphy SoCal Realty (760) 415-9292 kim@murphy-realty.com How much privacy are people willing to give up in the name of health, safety and security? How much and in what areas of people's lives are they willing to give up personal service and attention in the name of efficiency? These are just two of the questions that we need to consider as we look at the future of California real estate. The mission statement of Strategic Planning and Finance is defined below: The committee coordinates the planning and budgeting activities of the Association.   It is responsible for setting the long term direction for the association by identifying critical issues of importance to REALTORS® based on an analysis of member needs and driving forces affecting the evolution of the real estate market and brokerage industry. The committee also works to ensure the financial viability of the Association. It reviews financial statements, recommends policy changes and reviews and approves proposed expenditures recommended by other committees that are not part of the current budget. It is responsible for developing the annual program objectives and budget which is then presented to the Board of Directors for their approval. \ With this in mind, we read a lot of books and materials, that inspire us to contemplate, especially technology, and how it will impact our business. We read two books prior to our meeting in Monterey: “The Truth About Your Future,” by Ric Edelman and “How To Go Big, Create Wealth and Impact the World,” by Peter Diamandis and Steven Kotler. The books address how exponentially technology is changing, beyond and faster than we can imagine. So there are two BIG questions that stand out: How much privacy are people willing to give up in the name of health, safety and security? How much and in what areas of people's lives are they willing to give up personal service and attention in the name of efficiency? As Smart Home Technology becomes state of the art and Google Home becomes commonplace, does anyone contemplate how vulnerable they become in the hands of a predator? How about clothing or accessories that read your body's temperature, heart rate and stress level? Your Fitbit sends you messages, but who has access to all that personal data of yours? How long until Block Chain technology replaces escrow and title and ultimately lets the Seller transact the sale of their home directly with the Buyer? So, ask yourself, is your business model strong enough to stand in the face of all the technology that wants to eliminate you? If you think you are going to retain your position by using better technology than the "big guns" out there, think again. What is the one thing you have that they cannot duplicate.... you, uniquely, personal you. Find your greatest value and make it greater. If you're just surviving, then give it up. You need to be the best you, you can be and then you will thrive. Top Section 18 TAXATION & GOVERNMENT FINANCE Sandi Adelson, Homeland Properties Real Estate 760-591-3090 x104 thegotoagent@gmail.com Is a split roll like sharing a bagel? Not if you’re talking property taxes. A discussion has been going on for years about whether commercial property owners are using a loophole in Proposition 13 and putting an undue burden on residential property owners. Rather than transfer ownership of a property by selling it, corporations are putting the ownership of the property into a corporation and “selling” the corporation or substituting the existing Board of Director members of that corporation with new directors. The Taxation Committee took a position that if 90% or more of the entity’s ownership transferred by any means, a reassessment would be triggered on any property held by that entity, excluded would be the heirs to an estate. C.A.R. leadership wanted to know of that was still our position. A poll of the committee showed it was. Could your clients use a little extra money or a place for family to stay without sleeping on the sofa? Accessory Dwelling Units (ADU), better known as granny flats or mother-in-law units, could be the answer. Setting aside the issues of dealing with the cities’ and/or counties’ permit processes, financing them is a major hurdle. Unless the property is refinanced, a home improvement loan is obtained or a line of credit is gotten and the funds used to build the unit, what can you do. Last meeting we discussed “SPONSORING” a bill to have a Revolving Bond be put on the ballot for voter approval. The process would work much like Cal-Vet loans (anybody remember those). A briefing paper was provided to us but the committee felt that we really needed to have more depth into the workings of the proposal. Staff will create a more detailed report for our meeting in May. Are you a nerd? Crazy about details and numbers? Go to C.A.R.’s website, sign in and enter https://www.car.org/meetings/carmeetings/committee-materials-archive/2018winter/Taxation-and-Government-Finance-Committee for information on all of the issues discussed in Monterey.   Top Section 19 TRANSACTION & REGULATORY Marie Jebavy, The Real Estate Consultants (760) 212-9193 marie@mariejebavy.com Why did my client pay $75 plus for documents being recorded during escrow? New real estate recording fees will rise from $75 to $225 as of Jan. 1, under a new state law. The total is expected to generate as much as $300 million statewide to aid homeless, produce more affordable housing and support local planning changes. The bill, SB2 by state Sen. Toni Atkins, D-San Diego, applies to a long list of real estate-related documents but exempts those involving transfer taxes on sales of commercial and residential real estate. Also exempt are real estate transfers of owner-occupied homes, such as from a deceased relative. Examples of documents that will be subject to the fee include mechanics’ liens involving property construction projects, quitclaim deeds and affidavits of death related to real estate. The base increase is $75 per document on top of the regular recording fee of $12 to $18. If more than three documents are being recorded at the same time, there is a $225 cap on the increase. County Assessor-Recorder-Clerk Ernest Dronenburg Jr. estimated about 40 percent of his 900,000 recordings a year will be subject to the fee. At $75 per item, that would work out to $27 million generated locally, before factoring in the multiple recordings that might occur on one property. The state allows the county to deduct administrative costs for processing the new fees. Dronenburg currently estimates those costs at about 10 percent. When the state Assembly passed the bill in September, Atkins said the new fee was needed to address what she termed a “crisis” in housing. FHA Refuses PACE loans On December 7, the Department of Housing and Urban Development issued Mortgage Letter 2017-18 which states properties with PACE loans in senior position will no longer be eligible for FHA-insured mortgages. Mortgages that want to refinance into FHA loans must also pay-off any outstanding PACE loan. This is a reverse of HUD’s policy from a year ago that allowed the FHA to finance mortgages on the homes with outstanding PACE liens. Top Section 20 OTHER INFORMATION OF INTEREST Richard D’Ascoli, CEO (760) 734-3971 ext 222 Rich@nsdcar.com A C.A.R Director from your area will be making live reports on key topics following each of the state C.A.R. meetings. Watch for an announcement from your Coordinating Committee or local Marketing Session regarding date, location and time.  Plan to attend to hear the latest developments affecting real estate. Please take a moment to thank the NSDCAR Realtors who devote huge amounts of time to serving as your delegates to the California Association of Realtors. They are part of the leadership that monitors and identifies critical issues to the industry, participate in the discussion process at C.A.R., and bring back valuable information to you.  

Legal Affairs

Sandi Adelson, Homeland Properties Real Estate 760-591-3090 x104 


Property Managers…you just moved a tenant in with 3 kids and now you find they have 2 huge dogs, a python and an iguana they didn’t tell you about. Sound familiar?

OK so maybe there was no python, but you tell them the animals have to go, the lease says no pets. Tenant says, “Sorry, these are companion/therapy animals for me and my kids…we have a letter from Yourestuck Therapy and Treatment Center in Whoknowswhere, Idaho. Can you tell them that because they withheld the information the animals have to go? According to the Fair Housing attorney who made a presentation on Fair Housing for Property Management, no. A landlord cannot take any action to prevent the tenant from having the animals.

Do I have to honour the certification that the tenant probably got on a website, maybe a phone call and a credit card?

This attorney says yes. But, he says, try calling the provider of the certification and ask if they are prepared to testify as to this person’s disability.” The attorney says his experience is that the certification is canceled within a short amount of time. (You should always consult with your office managers, brokers, legal counsel and any other sources of information/advice.)

Can tenants possibly find any other ways to work the system and fight unlawful detainers?

If you haven’t experience it yet, get ready. Using habitability and fair housing violations, tenants are becoming more creative. Also, there are attorneys who now search the court records for filings of unlawful detainers and then contact the tenants to offer their services...perfect!

Do tattoos fall under protected classification in California?

Maybe. There is an actual case where a person with a large number of tattoos did not get a rental and it was deemed that there was discrimination under the “Arbitrary Characteristics” classification.

Sarah just moved into a lovely one bedroom apartment you had for rent. Now she’s advertising her new daycare services, can she do that? Notwithstanding local governmental restrictions for licensing, a landlord cannot limit her ability to have that daycare in her cute little apartment. There are mandates to be followed, but if she provides all the necessary proof and information, she’s in business.

I have permission from the author to share the copies of the slides used in his presentation and would be happy to if you simply send me an email with “LA -FAIR HOUSING FOR PROP MAN” in the subject line to


I will be happy to share it with you


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