Combs Law Group » Real Estate Law

Can a Real Estate Agent’s Error Void a Contract?

Chris Combs — Thu, 26 Jan 2012 20:39:20 +0000

Question: After being shown several lots in the Wickenburg area, we decided to buy one of the lots. We signed the contract drafted by our real estate agent. A few days after escrow was opened, we contacted the homebuilder to set up a time to meet at the lot, but after some confusion, he said that we bought the wrong lot.

The mistake occurred because our real estate agent had used the legal description of another lot in drafting the contract. The seller refuses to cancel the contract, however, because the seller says that any mistake was not his mistake. According to the Arizona Real Estate Law, can the seller enforce the contract against us?

Answer: No. Our legal system is based not only on statutes and rules but on judicial decisions, including early English judicial decisions known as common law.

One early English decision was the 1864 Peerless case. In the Peerless case, the buyer agreed to buy cotton arriving on the ship Peerless leaving from Bombay, India. In fact, however, there were two ships named Peerless leaving from Bombay, India: one ship leaving in October and the other ship leaving in December.

The buyer meant the ship Peerless that was leaving in October, and the seller meant the ship Peerless that was leaving in December. The buyer refused to pay for the cotton, which arrived later than the buyer expected on the ship Peerless that left in December, and the seller sued the buyer.

2012 Legislative Bills Regarding Short Sale and Foreclosures

Chris Combs — Tue, 24 Jan 2012 20:06:10 +0000

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.

If you would like more information regarding deficiency lawsuits, short sales, loan modifications, bankruptcy, HOA issues or other real estate related matters, please call our office at 602.957.9810 and arrange for an initial consultation with one of our attorneys.

by: Adam D. Martinez, Esq.

Must Keep Common Fence

Chris Combs — Wed, 04 Jan 2012 15:29:07 +0000

Question: We live in a rural area in west Phoenix. There is a chain-link fence on the property line between our backyard and our neighbor’s backyard. Our neighbor has built block walls on the sides of his home and now wants to enclose his backyard with a block wall replacing the chain-link fence between our backyards.

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

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

New HOA Fees Law Effective December 31, 2011

Chris Combs — Thu, 22 Dec 2011 18:12:07 +0000

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.

If you would like more information regarding HOA issues, deficiency lawsuits, short sales, loan modifications, bankruptcy or other real estate related issues, please call our office at 602.957.9810 and arrange for an initial consultation with one of the Combs Law Group attorneys.

Short Sale Contract May Be Cancelled by Buyer Prior to Approval by Lender

Chris Combs — Tue, 20 Dec 2011 15:51:05 +0000

Question: After signing the purchase contract for the short sale of our home, the closing was scheduled thirty days after approval of the short sale by our lender. The lender approved our short sale with one requirement, namely, that the closing occur within fourteen days. The buyer was concerned, however, about qualifying for a new loan within fourteen days and cancelled the purchase contract. Did the buyer have the right to cancel the purchase contract?

Answer: Yes. The buyer can generally cancel a short sale contract without any reason at any time prior to the receipt of the approval of the short sale contract by the seller’s lender. If there is any condition in the approval received from the seller’s lender, however, such as a shorter closing date or a higher purchase price, the buyer can cancel the short sale contract at that time.

Note: All purchase contracts have contingencies such as home inspection, termite inspection, approval of title report, and the approval of the buyer’s lender for a new loan. A short sale contract simply has one additional contingency, namely, approval of the seller’s lender.

Adverse Possession Rights In Fence Disagreement

Chris Combs — Mon, 05 Dec 2011 17:14:40 +0000

Question: My backyard fence is 8 feet over into my neighbor’s property and my neighbor wants me to move it.

Since I have only owned my home for six years, my neighbor says that I have no adverse possession rights to the 8 feet, although my home is more than 20 years old. The fence looks more than 20 years old however I am not sure when the fence was built.

According to Arizona real estate law, do I have to tear down this fence?

Answer: Probably not. By “tacking on” the adverse possession years of the prior owners of your home, the requirement of 10 years for adverse possession can be met.

Therefore, you should initially try to contact the individual who sold you the home, look at any old photographs or aerial maps of the property, and talk to neighbors in your area to determine when the fence was built. You should also contact the city for the date of any building permit for the fence.

If the fence was built more than 10 years ago, you own the 8 feet by adverse possession and are not required to tear down the fence.

Updating Your Estate Plan After Changes

Chris Combs — Thu, 01 Dec 2011 16:47:01 +0000

by: Adam D. Martinez

While you cannot know what changes the future will bring in your life, you can be certain that change will come. Some of the most common changes in life include the acquisition of money and property, marriage and divorce, the birth of children, and death. An effective estate plan can provide for most of the important decisions related to each of these changes. Even if you already have an estate plan, these changes often necessitate updating your estate plan. Updating your estate plan may include changing how your property will be allocated among your heirs or beneficiaries, changing your personal representative or power of attorney, and selecting or changing a guardian to care for your children in the event of your death. Updating your estate plan can help you effectively address these changes.

In addition to a will and possibly a revocable living trust, a basic estate plan should include a living will, a health care power of attorney, and a financial power of attorney, all of which help you plan for events in which you may still be alive, but not conscious or capable of making decisions. Consideration should also be given to beneficiary deeds and payable on death (P.O.D.) accounts, both of which allow you to transfer property upon death outside of probate.

The Combs Law Group can help you create an estate plan, and can also help you update your existing estate plan to help you plan for the expected and unexpected changes that the future holds. We look forward to meeting your estate planning needs.

Combs Law Group Seeks Associate

Chris Combs — Wed, 23 Nov 2011 18:30:06 +0000

Combs LawGroup PC is currently seeking a highly motivated Real Estate Associate with 2-4years experience in residential/commercial transactions and litigation. Candidates must have exceptional academic credentials along with strong oral,written and computer skills. The firm offers a competitive salary and acomplete benefit package.

Qualified candidates should e-mail their resumein confidence to jerri@combslawgroup.com.

Smokers Not Covered Under Fair-Housing Laws

Chris Combs — Tue, 15 Nov 2011 17:04:11 +0000

Question: My husband will be teaching as a visiting professor at Cambridge University in England next year. Our plan is to return to Arizona after one year so we will be renting our home in Chandler. We do not want to rent to smokers because we do not want the smell of smoke in our home when we return. A potential renter, whose brother is an attorney says that we must rent to her even though she is a smoker because smokers have equal housing rights. What are the Arizona landlord tenant laws regarding smoker’s rights?

Answer: No. When I’m asked about the rights of smokers, I am reminded of Ted Danson’s line in the movie Body Heat when, after everyone else in a conference room lights up a cigarette and he is offered one, he says, “No, thanks. I’ll just breathe the air!” Smokers are not a protected class such as race, sex, or familial status under the Fair Housing laws, and you are entitled to refuse to rent to smokers. Likewise, landlords can discriminate against college students, unrelated single adults, and illegal aliens, provided that the real reason for the discrimination is not based on the prospective tenant being a member of a protected class such as race or religion.

Single Asset Limited Liability Companies Recommended for Investment Properties

Chris Combs — Tue, 08 Nov 2011 18:45:14 +0000

Question: I would like to use most of the money that I inherited from my grandmother to buy investment homes at foreclosure sales. Recently, I bought my first investment home at a foreclosure sale. I then decided to form a limited liability company (“LLC”), and I transferred the title to this investment home into the LLC to avoid personal liability. In the next month I plan on purchasing three more investment homes. Should I then transfer the title to these three investment homes into the already established LLC, or should I have a separate LLC for each investment home?

Answer: You should have a separate “single asset” LLC for each investment home. The reason for this is that, if one of the investment homes turns into a “rotten apple” the other investment homes will not be affected. Take for example, if one of the the investment homes has mold, and the tenant and the tenant’s family are severely injured by this mold, many insurance companies will not cover, or will severely restrict, mold claims. The cost of forming an LLC is minimal in comparison to the potential liability, and, unlike corporations, after formation of the LLC there is generally no government involvement. In another good example, a developer owned twenty buildable lots, and the developer placed each of these lots in a “single asset” LLC. After building and selling homes on each of these twenty lots, one of the lots had a severe soil settling problem. Although the LLC that owned that particular lot had significant liability, none of the LLCs that owned the other nineteen lots were affected.