Monthly Archives: June 2010

Massachusetts Condominiums Should have Websites–It outta be the Law

Condominiums in Boston, Massachusetts and surrounding towns come in all shapes and sizes. There are a plethora of 2 and 3 Unit condominiums, former personal properties where the owner usually lived in one of the apartments, and rented out the other apartments to family or third parties. These “Mom and Pop” building are NOT the subject of this post.

What I am addressing is Condominiums with four or more Units. These Units were either built as Condominiums, or have been converted from apartment buildings to condominiums. Some of these larger units are self-managed, but the great majority are managed by professional managers. These managers do not make things easy for the Unit Owners. There is almost always a charge for move-ins and move-outs and there is a charge for a 6(d) certificate, so-called, which indicates that there are no unpaid common area charges for a Unit which is being sold.

Condominium Documents, when available, are unsigned, and amendments thereto are not furnished. Floor plans are not readily available, especially now since Massachusetts condominium law has been amended so as not to require the recording of a certified floor plan at the  first-time sale of a Unit.

So, at least in Massachusetts condominiums, the law should be changed so that Condominiums with four or more Units, should be required to maintain a Website, which contains, at a minimum the following items:

     1. Floor Plans of each Unit

     2. A complete set of  recorded Condominium Documents, and amendments, with Registry information included.

     3. A form of a 6(d) Certificate which requires only “fill-ins” for completion.

     4. The names of the current, of record, Trustees.

     5. The name, telpehone, and email address of the individual who needs to be contacted to fill out Condominium Questionnaires as required by lender.

I would also suggest that Unit Owners have restricted access to minutes of the Trustees, so that Unit Owners can be kept up to date on proposed assessments and other matters affecting the Unit Owners. These can be distributed to prospective Buyers at the Sellers’ discretion, but I know that I always ask for them when I am representing a Massachusetts condominium Buyer, and they are often extremely helpful.

The cost to set up a webpage continues to go down. The need for an effective vehicle for Unit Owner and realtor communication is real. I would be interested in hearing your response to this initiative. In my mind as a Massachusetts title attorney with over 40 years of experience, this change in the Massachusetts condominium law is way overdue.

Alternatives to Adversarial Foreclosure–Ways that you can participate in the new wave of mortgage investors of distressed situations

Whether or not you are aware of it, there is a growing group on investors (mostly funds and committed individuals) who are purchasing mortgages, either in bulk or individually, and getting in front of these investors may mean new opportunities for you.  The investors see an opportunity to participate in a “win-win” situation. They purchase the mortgages for pennies on the dollar. Because they have purchased at the right price (usually less than the value of the underlying real estate) they can work out individual solutions with the distressed Borrowers, which sometimes permit the Borrower to stay in his or her home. If that result is not possible, a kinder, gentler exit strategy is developed with respect to permitting short sales to move through efficiently or to accept deeds in lieu of foreclosure, but still allow the Borrower to stay in the real estate until the end of the school year.

I am aware of at least two of these investors, and I would gladly furnish this information to you if you contact me. The beauty of this carrot, not stick, approach is that the real estate is often not destroyed by a vindictive Borrower before he or she leaves. There are ways to give incentives to Borrowers to  maintain the property before they leave, including cash payments and assistance in finding alternative shelter. The investors involved have developed a corps of people to contact the Borrowers and listen. Many Borrowers have fallen behind because they have lost their jobs, gotten sick or split up their marriage. They did not commit fraud when they purchased; they ran into some bad luck.

The new investors are people you should be speaking with. They have the efficiencies of a focused approach and a plan. There is no reason why each of you could not fit right in.

Working Unusual Hours–Turn Your Idiosyncracies Into a Marketing Plus

A while back, I noticed a clip in an online legal service I subscribe to which indicated that a real estate customer was suing her realtor for harassment because the realtor sent this client emails in the middle of the night. I never found out what the outcome of this litigation turned out to be. My only thought was that this suit was a perfect example of how deeply enmeshed our country is in litigating anything and everything. It is my fervent hope that this customer did not prevail in this lawsuit.

Like many Rainers, I work strange hours. I don’t sleep much, and when I wake up in the middle of the night, I am just as likely as not to go to my computer and fire off a few emails as to return to bed. I have some thoughts and solutions for some of my clients. Why shouldn’t I write them down and get them in front of the people I am trying to serve?

To me, the beauty of email is just what I described. I can write an email any time I please. My client can read it any time he or she pleases. For me, email has cut down my phone conversations considerably. More than that, it has permitted me to put down in writing often complicated solutions to questions, in print, so that my clients have a better chance of understanding what I mean because they see it in words rather than hearing it from me, and perhaps, not quite understanding everything I have said.

My clients often say to me “Don’t you ever sleep? What are you doing sending me an email at 3:45 AM? I usually respond that I was thinking about a solution for their situation, and I thought it made sense t get it down in writing so they could have an opportunity to review what I was thinking. My sense is that, deep down, there is recognition of effort and commitment on my part, and these two qualities can only enhance my standing with clients.

I can’t really control how much I sleep. Fortunately, none of my clients have sued me for sending emails in the middle of the night. My sense is that my sleep deprivation syndrome may be a marketing plus. I would be interested in hearing your reaction to this analysis, and whether, you, too, use middle of the night emails.

–Demonstrate your commitment to your customers–An “E” for effort matters!!!!

A while back, when I was just starting my practice, I read an article about a survey done in Missouri (not my home state) concerning impressions that clients had of attorneys whom they had previously retained. The point of the article was that most respondents said that their attorneys were competent; they knew the law. What made most people decide whether an attorney was good or bad, at least for them, was the clients perception of the amount of effort that their attorney was devoting to their matter. Did the attorney specifically ask his secretary to “hold all calls” during our first meeting? Did the attorney make a phone call or phone calls while the client was in the office after a first meeting to demonstrate that this is an important enough matter for him or her to get started on, right away? Did the attorney send copies of ALL correspondence to the client, so the client was kept informed on progress on his or her matter?

We now have tools which speed up communication. it is easier to keep clients informed with emails and cell phones. But, have these means of communication really assisted us in communicating? The answer to that question depends on the professional. We can do a better job of communicating now, and show the effort that sets us above the ordinary, if we are not lazy or hesitant. People use our services because we are experts. The way we show this is by representing them imaginatively and consistently. It doesn’t help if we have a cell phone if we don’t return calls. What good are unresponded emails?

After more than 40 years of practicing law, I am just beginning to get it. Your clients and customers want to feel important. They want to feel cared for. You have the tools; you need to apply them and let your clients understand just how very talented you are and why they are so lucky to have you on their side.

Make it Harder to Get Married; Easier to get Divorced—Off Topic, but Relevant

In his “Your Money” segment in the New York TIMES (Saturday, October 24, 2009 edition) Ron Lieber discussed “Four Talks About Money to Have Before Marriage”. His point was that a couple’s ancestry, credit, control and affluence have an impact on the future success of their marriage. The more their prior experiences in these areas deviate, the better chance there is that they will not be a successful married couple, and will eventually split up and divorce.

My belief is that “talks” are not enough. I have seen marriages crack at the seems when one spouse finds out that the other has $60,000 of credit card debt, which the newly married person is assuming to pay, one way or another. Perhaps, if that spouse had known about the debts, he or she would have said, “you know, before we try to buy a home, we should get these old debts paid”. Perhaps, her or she would have taken even a tougher approach. “let’s not marry until we are on a strong financial footing, and you have addressed this problem.

Indirectly, or directly, the financial problems of a married couple affect our industry. If discovery of hidden financial problems shows up when the couple is trying to get a mortgage, the deal may not go through. On the other hand, it may go through, but only with the use of one spouse’s credit score, and this type of leverage can lead to lasting resentments on a going forward basis. There are myriad circumstances where newly discovered financial problems are the cause of a couple’s falling behind on their mortgage, and eventually facing foreclosure.

My solution to this problem is straightforward. Do not permit a couple to marry until each spouse has submitted a current financial statement, which is sworn to under the pains and penalties of perjury. If there is fraud in this document, the innocent spouse should be able to get out of the marriage and not be required to pay alimony. The non-offending spouse should be able to keep what he or she brought into the marriage, no questions asked. There should be a three year period where this situation obtains. After that, both spouses will, or should, know what their financial situation truly is.

Sick kids at college or working away from home–Protection you can still Offer when they need help!!!

Among the learning experiences for parents with children away at college is the fact that having reached the age of 18, your child is no longer your ward, and you are no longer your child’s legal guardian.  That doesn’t mean that cannot pick up the tab for tuition, room and board, but you are not, as of right, entitled to see your child’s grades, and you are not, as of right, entitled to be informed of health issues confronting your child or to make medical decisions for your child.

The grade issue can be circumvented by interaction with your child. The health considerations are a little bit more complicated and require some forethought.  The three  documents that will assist you in being in position to help your child in medical emergencies, or even routine medical decisions, are a Health Care Proxy (which gives you the right to make “informed consent” decisions for your child),  the FICCA form (which gives you access to your child’s medical records) and Durable Powers of Attorney (which gives to the right to sign documents and take other actions on behalf of your child, when he or she is unable to do so).  These documents are part of our standard Estate Planning package when we assist our clients with their own issues. We are now suggesting that the appropriate execution of these forms become part of your checklist for sending your child away to college and, realistically, when they start a new job or position in a remote location

Wherever you are located, we, at Topkins & Bevans, can either prepare these forms for you, and supervise their proper execution or locate someone in your state to do same, all for a minimal fee. With the reticence that many medical and educational institutions have developed to release information and records, the Health Care Proxy, HIPPA Form and Durable Powers of Attorney have become “don’t leave home without it” items. Don’t wait until you have a frantic child on the phone that you really cannot help at all without the expense and frustration of climbing into a plane or your car to be there, in person!!!

I would be interested in feedback from the ActiveRain community whether they feel that this projection is important and what type of price-points would make you want to have the documents in place, or encourage your friends and business acquaintances to do so. Thanks for a comment, if you find the time.

The pampered Buyer–Things we can still do to get the deal done

With all the commotion about the First Time Buyer Tax Credit, and doom and gloom news from our newspapers and TV stations, it is no wonder that the Buyer now believes he or she is in the driver’s seat. No request is unreasonable; after all, most of the Sellers are on the brink of foreclosure, and they will do anything to make the deal.

We all know that, if anything, the real estate market is firming up, and in some places starting to percolate. I am aware of competitive bids for properties in some locations in Massachusetts. So, Buyer beware!!!  You are not as much in control as you think. That being said, I suggest the following tactics for Buyer’s agents and attorneys for the Buyer:

    1. Work on educating your consumer. Tell your Buyers that it is a strong market, but unless they exercise some degree of reason, they will continue to lose out on properties which they want but feel compelled to exact too many price, and other concessions. It probably would not hurt to let your Buyer know that interest rates are at historic lows. If they delay their purchase indefinitely, the home they can afford today may be out of their financial reach tomorrow.

    2. Have a good handle on values.  Most of you, and I, are not professional appraisers. On the other hand,it behooves all of us to know the real value of the property we are involved with and giving that information to the potential Buyer. Sometimes, this valuation can straighten an aggressive Buyer out. If he or she bargains to hard, or too long, he or she will lose a property at an advantageous price. Knowing real values is an important part of our professiona, and that knowledge can really assist you when your Buyer “acts up”.

Shut Out by the Restrictive FNMA/FNMLC Condo Financings Rules–Another Option you Can explore

In the course of representing a developer of a 6 Unit Condominium in Boston, I may have uncovered some information that can be helpful to the ActiveRain community. There is a lender out there who will make FNMA type loans (not portfolio) on projects which the lender, itself, certifies to its own satisfaction. This lender does its own “due diligence” and decides whether the project is acceptable.  There are some conditions (of course), the most important of which is that the certification must be while the project is in a “pre-sale” mode.

That means that this lender will not certify older, existing condominiums where the owner-occupancy standards are not met, only newly marketed units. Nonetheless, having a financing source for the many still unsold projects which are really not “saleable” may be worth your while to explore.

For obvious reasons, I prefer not to broadcast the lender in question. If any of my New England readers want to get more details, contact me at etopkins@topbev.com. I am glad to give out the referral; I just am not authorized to broadcast it.

Elliott Topkins

www.topkinsandbevans.com

The $8,000 First Time Home Buyer Credit–If Your Clients Have Already Closed on their Purchase, They Can Get the Credit Back from Uncle Sam Right Away

For all of you who have clients who qualify for the First Time Home Buyer Credit, there is great news from the IRS. According to IRS Commissioner Doug Shulman, “this special tax feature can put money in their  (the “Buyers”) pockets right now rather than waiting another year to claim the tax credit. This important change gives qualifying homeowners cash they do not have to pay back.”

The amount of the credit will “phase out” to taxpayers whose adjusted gross income is more than $75,000 or $150,000 for joint filers. This still leaves a large universe of eligible people who can get cash back as soon as their amended 2008 return is processed.

For those readers of this post in Massachusetts, please be aware that I have located a reliable Massachusetts-based tax accountant who will prepare an amended 2008 Tax retrurn for eligible individuals on favorable payment terms. Contact me if you wish, and I will put you in touch.

This immediate opportunity for your Buyers to get cash right away seems like a great chance for you to re-connect and give your Buyers the good news. We always say we will do this, but this is a golden opportunity that should not be overlooked.