Bad Credit Report from Prospective Tenants? Landlords Take Note

Here is the first in our new real estate law series "Tip of the Week" that you can look forward to every Wednesday. The Tip of the Week is brought to you by OnlyClosings.com

Did you know… If a landlord denies an application or requires a co-signer based on information obtained from a consumer credit report, the landlord must follow the rules of The Fair Credit Reporting Act (FCRA) and provide an “adverse action notice.”

This notice must include:
- the name, address and telephone number of the CRA that supplied the consumer report, including a toll-free telephone number for CRAs that maintain files nationwide;
- a statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give the specific reasons for it; and
- a notice of the individual's right to dispute the accuracy or completeness of any information the CRA furnished, and the consumer's right to a free report from the CRA upon request within 60 days.

To read the article by the Federal Trade Commission “Using Consumer Reports:  What Landlords Need to Know.” click here.

The weekly Tip-of-the-Week* is supplied by Only Closings --

a law firm devoted to real estate closings.

      - Our closing staff is made up of seasoned, experienced real estate attorneys.
      - Close where it is most convenient for the client (home, office, job or bank)
      - Very competitive closing fee and no hidden fees!
      - No fee consultations.
      - Personalized, responsive service from all of our attorneys and paralegals

To learn more about Only Closings and how they can help you quickly close a property transaction, call them at 203-563-9677 or visit them online at www.OnlyClosings.com

*The content within the "Tip-of-the-Week" is strictly for informational purposes and not intended to be interpreted and/or used as legal advice. Only Closings and OnlyClosings.com is a service provided by Tamara L. Peterson Attorney at Law LLC.

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What Happens To Your Deposit Money in CT if You Can't Get a Loan on Time?

When a Buyer makes an offer to purchase a home, the offer is accompanied by an earnest money check, also commonly known as a down payment. 

In the State of Connecticut, typically a Buyer provides the Seller with a check for ten percent (10%) with the signing of the Contract and provides the remaining Ten percent (10%) at closing. The numbers are not set in stone but the more money offered as a down payment the more likely the Seller will accept an offer and the easier it is to be approved by a Lender for a Mortgage. 

The down payment is held in trust in the Seller's attorney IOLTA ( Trust ) Account.  In the Connecticut, if agreed to by the parties, this down payment may be released to the Sellers once the Buyer has obtained his/her Mortgage Approval. 

However, in the last 8 to 10 years, most Connecticut Bar Associations have written into their rules that the down payment funds can not be released until the time of closing.  In the State of New York, it is illegal for an attorney to release the down payment funds before the closing.
 
A question arises as to what happens if the Buyer does not get his/her Mortgage by the deadline.  If the Buyer does not get his/her Mortgage by the date stated in the Contract of Sale, the Buyer's attorney should ask for an extension to obtain the Mortgage Approval.  If the Buyer's attorney does not request that extension in writing, the Seller could be  entitled to the down payment if the transaction does not go forward. 

Also, if the Buyer backs out after signing the Contract, the seller may be entitled to the down payment.  Most Contracts have a liquidated damages clause, which allows the Seller to keep the down payment if the Buyer defaults.  If the Buyer does not qualify for the Mortgage and advises the Sellers in a timely fashion, the down payment is returned to the Seller.
 
However, it is not that easy for the Sellers.  If the Buyer had an extenuating cirmcumstance, i.e. - a death in the family, lost a job after entering contract, etc., the courts will look to these cirmcumstances and not allow a windfall to the Seller. 

Most courts will allow the Seller to be able to keep the difference to make him whole.  He can not reap a benefit from the default.
 
Every circumstance is different.  Keep an  eye on the dates in the Contracts, do everything in your power to meet your deadlines and if you cannot, ALWAYS request an extension in writing.  As a common courtesy most attorneys will allow for a one week extension and in the current mortgage environment more.

Article Submitted by Attorney Felicia B. Watson

FeliciaWatson@sbcglobal.net

Buyers: Before you Buy - Are there Easements on that Connecticut Property?

Another informative article submitted by Felicia B. Watson Attorney at Law

When  I meet with my clients, I always ask them if the plan on building or adding on to the property they are considering to purchase.   This includes building a pool.  The size of the home , the size of the lot, wetlands, flood zones  and easements  can restrict a homeowners’s ability to build.  Also, each town has very specific zoning regulations regarding setbacks from  the neighbor’s property, the septic system or wetlands, if any exist on the property.

These restrictions usually effect building outside of the footprint of the home, not interior work.  Many Buyers have no intention of adding to the home.  But ask for a copy of your easements anyway.  The more knowledge you have of your property the better.  For those who even might build an addition, find out the necessary information before you sign the Contract.  Also, if you have any intention of  building a pool on your property, hire a company to establish the footprint before you sign.  An easement on the land records does not effect marketable title, so if you  don’t like the easement after you sign the contract you can not rescind the contract.

As a former member of the Town Plan and Zoning, I am acutely aware of the rules, regulations and guidelines for homeowners.  Understanding the potential  is just one more step in a successful real estate purchase.

FeliciaWatson@sbcglobal.net

Introducing Real Estate Attorney Guest Contributor, Felicia B.Watson

I would like to introduce veteran Real Estate Attorney Felicia B. Watson as a guest contributor on theCTrealtyBlog to update you on legal concerns as they pertain to your real estate purchase or sale.

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Usually, my Seller client does not telephone me until after he or she has received an offer to purchase.  Prior to meeting with me the Seller has already filled out his/her Residential Disclosure Form.  I would like to discuss a section that gets many people in trouble.  I have seen this particular problem arise on more than one occasion.  This is Section #17- Basement: Water/Seepage?Dampness?  Explain, amount, frequency and location.

If you have even one incident of water coming into the basement, report it.  Even if the electric was off, the sump pump not working, a leak in the roof, a 100 year flood, anything.  No harm can come if you report it.  If you don’t report it, it can come back to haunt you.  I have seen Buyers sue Sellers over one incident not being reported.  Even if you are in the right, the legal fees can be cost prohibitive forcing you to settle for several thousands of dollars.  If you report even the most minor incident, you won’t have a problem.  As Sellers, it always best to disclose, disclose, disclose!

About Felicia B. Watson

Felicia B. Watson is a highly skilled and experienced  attorney who has been practicing law for over 30 years, and specializes in Fairfield County Connecticut  Real Estate.

Felicia's law practice involves all aspects of residential real estate, commercial property, new construction and retail transactions, and she is involved in all aspects of real estate financing. She has been involved in thousands of transactions representing both Buyers and Sellers and, as she puts it, "purchasing a home is one of the monumental moments in a person's life".

Her services include contract preparation and review, lease agreements, planning and zoning concerns, building permits, wetland and conservation as well as probate issues.

In her own words, Felicia says "Real estate has been my passion for over thirty years", and it shows. Furthering her commitment to her clients, she is currently pursuing her Masters Degree in Real Estate Development at NYU. She has also served as an Assistant Attorney General, and as an Elected Official on the Planning and Zoning Commission.

Attorney Felicia B. Watson
FeliciaWatson@sbcglobal.net