Arnold CA Blog – Real Estate Advice & Editorials

Misinformation has been spreading around the Internet regarding H.R. 2454, the “American Clean Energy and Security Act”.  HR 2454 would impose the following:  

* No mandatory retrofit requirements!  Retrofits are incentivized through financial programs but are not mandatory.  Because these programs are subsidized with taxpayer money, should a homeowner choose to do a retrofit and take advantage of the taxpayer subsidized program, then they would have to do an inspection before and after the improvement to ensure the taxpayers are getting their money’s worth.  Again, this is optional and is not mandatory.
*The labeling program is only for NEW properties.  Existing properties will [...]

Misinformation has been spreading around the Internet that the Obama Administration will finance the new health care legislation with a tax on real estate.  C.A.R. would like to clarify.  The new law imposes a 3.8% tax for households in the top tax brackets on “unearned income.”  This includes capital gains.  However, this will not impact the exclusion on capital gains earned from the sale of a primary residence up to $250,000 for individuals and up to $500,000 for married couples.  The 3.8% tax will only apply to capital gains above the normal exclusion.

Starting today, renovations that disturb lead-based paint in older residential dwellings and child-occupied facilities must generally comply with the Lead-Based Paint Renovation Rule of the Environmental Protection Agency (EPA).  REALTORS® acting as listing agents or property managers who advise their clients to perform renovations, repairs, or painting projects for such properties may, as a matter of prudence, also want to inform them about these lead renovation requirements.  One common example is when a listing agent recommends that a seller has a home painted to improve its marketability.

Under the newly implemented rule, renovators of target housing built before 1978 must now [...]

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification.  Enacted into law yesterday, Senate Bill 401 generally aligns California’s tax treatment of mortgage debt relief income with federal law.  For debt forgiven on a loan secured by a “qualified principal residence,” borrowers will now be exempt from both federal and state income tax consequences.  The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

“Qualified principal residence” indebtedness is defined as [...]

As I’m sure many of you are aware, the State of California is in the middle of a desperate Budget Crisis. They are implementing some unusual and harsh new requirements such as withholding an additional 10% of gross pay from all wage/salary employees in California. There are now additional ‘collections’ being required from out of state rental owners.

As of January 1, 2010, the State of California will be requiring all Property Managers to withhold 7% of your collected rents each month. These ‘withholdings’ will then be sent (along with a reporting form) to the California Franchise Tax Board on a [...]

Many of you reading this will react the same way I did asking, ‘Why was this not already against the Law’? While there is current federal law addressing this issue and federally insured lenders, it is finally being addressed at the state level.

 As of January 1, 2010, anyone who deliberately makes any misrepresentation or omission during the mortgage lending process with the intent of influencing that process will be guilty of mortgage fraud under California law.  A violation of this law is a crime punishable by one-year imprisonment.  Under existing federal law, loan fraud against a federally-insured lender is a crime [...]

Current law requires a 60 day notice to terminate to a month to month rental agreement. This 60 day notice requirement was scheduled to expire at the end of this year. With the passage of Senate Bill 290, the 60 day notice to tenants has been permanently extended. You may still use a 30 day notice to terminate if the tenant has lived in the property less than one year, or if the landlord has sold the property as long as certain requirements have been met. The 60 day notice requirement does not apply to ‘fixed term’ leases, only month [...]

Effective January 1, 2010, the homestead exemption protecting a homeowner’s equity from judgment creditors has been increased by $25,000 across the board to $75,000 for individuals, $100,000 for married couples or family units as specified, and $175,000 for persons over 65 years, disabled, or over 55 years with limited income as specified.

Thanks to the passage of Senate Bill 237, the Office of Real Estate Appraisers (OREA) will have regulatory oversight of appraisal management companies, which gained prominence after Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC).  Starting January 1, 2010, the OREA must implement a registration system for appraisal management companies, including fingerprinting and background checks for persons with operational authority as defined.  On a separate note, this law clarifies what conduct constitutes improperly influencing the appraisal process by anyone with an interest in a real estate transaction.  Such prohibited conduct includes withholding or threatening to [...]

Recently enacted Senate Bill 306 does not require lenders to review short sale requests from sellers and their agents within 21 days.  The new California law, which addresses certain escrow procedures, has been mischaracterized by some practitioners as landmark legislation calling for a 21-day turnaround for short sale approvals.

The new law inserts a short payoff amount request into the existing payoff demand law which generally requires a lender to respond to a request for a payoff demand statement within 21 days from when it is requested, typically by escrow.  The new law essentially requires, after a short sale has already [...]