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Archive for July, 2009

"AS-IS" IS "AS-IS" For Termites

[. . . All clauses in this Contract pertaining to Property condition, termites or compliance with city, state or county regulations are hereby deleted from this Contract. . . .] – AS-IS para. #3, Addendum of Clauses, GCAAR Regional Sales Contract
Yes, it means what it says. Read it, live it, and breathe it when you set out to present your next “As-Is” sales contract.
  • It means that if the purchaser discovers infestation and structural damage resulting from wood destroying insects – tough luck – purchaser pays for the treatment and repairs.
  • It means para.#16 of the Regional Sales Contract, “Termite Inspection” is DELETED – POOF! GONE!

Caveat: A seller cannot hang his/her hat on the “As-Is” clause if the seller intentionally or negligently misrepresented a material condition or fact; or if the seller fraudulently concealed a material condition or fact; or if the seller made a false promise of a character likely to influence, persuade, or induce.

Location Survey – WHY?

July 15, 2009 1 comment

The GCAAR Regional Sales Contract makes only one reference to the survey and is found in para.#19 as follows: “The title report and survey, if required, will be ordered promptly . . . .” Note the key phrase “IF REQUIRED.” What does that mean?

“IF REQUIRED” means if required by the purchaser’s lender. Nearly all mortgage lender underwriting will require the title insurer to issue a lender’s title insurance commitment without exception to survey matters. In other words, a lender will not accept a title insurance policy without coverage for survey matters.

Taking Advantage of your Tax Appeal

The decrease in home prices does have some advantages, one of which is the opportunity to challenge property tax assessments. Often I find myself seated at closing with a homebuyer who has purchased a property for far less than the county or city assessed value. While challenging a tax assessment after closing may not be the most exciting way to spend your time, it does have the potential to save you thousands of dollars.

In Maryland, if a property is purchased between January 1 and June 30, the new homeowner has 60 days from the settlement date to file an appeal. If the homeowner misses this 60 day window, there are two more options: an appeal within 45 days of receiving an assessment notice (typically every three years) or a “Petition for Review” by January 1 of any year. The initial review will take place at the Supervisor’s Level, which is typically an informal, 15 minute meeting. If the homeowner disagrees with the decision, an appeal can be made to the Property Tax Assessment Appeal Board. If still dissatisfied, a further appeal can be made to the Maryland Tax Court. Here is the link to the Maryland Department of Assessments and Taxation, http://www.dat.state.md.us/.

In the District of Columbia, an appeal must be filed within 30 days of the date of the assessment notice (taxes are assessed annually) and it must be received no later than April 1. A new owner may file a petition for administrative review. The initial appeal can be conducted in person, in writing, or by telephone. If the disputed assessment can not be resolved, the homeowner can appeal for a Board level review, and if the homeowner is still not satisfied, a final appeal can be made to the Superior Court of the District of Columbia. Here is the link to the DC Office of Tax and Revenue appeals page, http://otr.cfo.dc.gov/otr/cwp/view,a,1330,q,594359.asp.

You should be prepared to provide comparables or other data to prove that the property assessment is too high. When appealing after a purchase transaction, a HUD-1 Settlement Statement or an appraisal may be helpful. Every property owner is entitled to obtain, free of charge, their property worksheet and a sales list for the area where the property is located. Most importantly, during the appeal, focus on the points that specifically affect the property value – do not argue about percentage increases, past values, or values of properties in other jurisdictions

Don’t be intimidated by the tax appeal process; typically at the first appeal level you will meet one on one with an appraiser in a non-adversarial setting. Also, most appeals are resolved at the first appeal, especially if you have done your research, therefore appealing to a review board or the tax court is not generally needed. So use your right to Tax Appeal, it’s not as difficult as it seems and the reward will be worth it.