| Legal Ideas and Information - October 2003 |
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How To Own Residential Property With a Friend . . . Do You Want A Court To Decide, Or Would You Rather Do it Yourselves?
The decline in mortgage rates over the past few years, along with the long-standing perception that real property is a good investment, has contributed to an increasingly-large pool of potential buyers ֠those who want to co-own a residence with an unmarried partner. Many of these are committed couples who are looking to cash in on the advantages of home ownership (like tax deductions and the anticipated appreciation in value); others are merely friends or acquaintances who want to share ownership of a vacation property they would otherwise be unable to purchase on their own. It is certainly possible that unrelated people can co-own property without a formal arrangement between them, without incident. But a savvy couple or group of friends will address the contingencies ahead of time, by entering into a written agreement which sets out their ownership rights and provides for an equitable distribution of the property in the event of any number of circumstances. Avoid Costly Court Battles - Resolve Divorce, Custody and Support Cases With Mediation and Arbitration
As state budget cuts in the Court system cause already overburdened Courts to delay trials even longer, parents and divorcing parties need a way to resolve their disputes in a quick and cost effective manner. Mediation and arbitration are two different ways to accomplish those goals. The Frascona, Joiner, Goodman and Greenstein, P.C. family law department can function as a mediation team or as an arbitrator in divorce, custody, and support cases. With more than 16 years of experience handling family law cases, we are able to settle issues quickly without each party spending years in Court and tens of thousands of dollars in legal expenses. In mediation, a neutral third party (someone who does not represent either party) meets with the parties separately or together during a mediation session. The parties can go to mediation with, or without their lawyers present. Typically, the mediation session takes place in a conference room at the mediator's office. The mediator may review documents, photographs, and other items submitted by the parties prior to the mediation session. Through discussion with the parties together and separately, the mediator tries to help the parties resolve their issues without further Court intervention. Offers made during mediation are confidential, and cannot be used in Court. Furthermore, the mediator cannot be forced to come to Court and testify about confidential information disclosed at the mediation. Transaction-Brokers and Commissions
I am aware of the legal concept that if an agent breaches his fiduciary duty to a client, the agent may forfeit his right to a commission, regardless of whether that breach of duty caused damage to the client. Does that same concept apply to transaction brokers? No. In the recent decision of Hoff & Leigh, Inc. v. Byler, No. 01CA2005, 2002 WL 31601004 (Colo. App. Nov. 21, 2002) the court held that the principle from Moore & Company v. T-A-L-L, Inc., 792 P2d 794 (Colo. 1990), that an agent who breaches his or her fiduciary duty to a seller forfeits the commission, regardless of the damages caused to the seller, was not applicable to a transaction-broker. To avoid paying a transaction-broker a commission, the unhappy client must prove he has suffered actual damages caused by the transaction-broker's mistakes. This publication is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that the publisher and distributor are not rendering legal, accounting or other professional service, and assume no liability in connection with its use. Copyright © 2003. This is an advertisement. |
IN THIS ISSUE
Loan Fraud: Say No to Ugly Lending Practices
Reprinted from REALTOR® Magazine, October, 2003. It's often done with the best of intentions, but manipulating contracts, appraisals, sources of downpayment, and sale prices to help buyers qualify for a higher loan amountץven if it's suggested by the lenderay make you guilty of loan fraud. Loan fraud occurs when a lender makes an inappropriate loan, because the property is overvalued or the lender has a false picture of the buyer's financial position. Some experts estimate that as many as one in 10 mortgage loan applications contain some misrepresentation. Here's how it can happen: Sally is a good real estate salesperson. She just wants to close the deal and to make everyone happy. But the seller is desperate to sell, and the buyer needs "just a little help on the downpayment." So Sally writes a contract for $100,000, contingent on a 90 percent conventional loan. Both parties sign it. The contract includes a clause that reads, "Seller to credit Buyer with $1,000 for a drapery allowance." So far, Sally looks good. She's written all the terms of the dealנincluding the payment the seller is making to the buyerשn the contract. Then the loan officer tells Sally to take the clause discussing the drapery allowance out of the contract and do it as a separate "side" agreement. "If there's any money being given to the buyer for draperies, it shouldn't be in the contract because then the loan won't correspond to secondary market guidelines," he says. "Just bring me a new contract, and I'll pretend I never saw the first one." Sally, who trusts the loan officer, rewrites the contract and gets the parties, who trust Sally, to sign again. The loan officer destroys his copy of the original contract, and the transaction closes with the second contract. Now the ugly part. The buyer misses a payment. The lender conducts a routine audit and finds out about the "kickback" of funds to the buyer. This payment was part of the transaction but wasn't disclosed on the HUD-1 statement, says the lender. Next thing Sally knows, the FBI is at her door, pointing out that the incentive payment isn't in the contract. The buyer and seller say Sally promised that the side agreement was OK. The loan officer swears he never would've told Sally to leave it out and that he "never saw a prior contract." Sally spends thousands in legal fees, loses her real estate license, and barely avoids criminal charges. If the buyer in the story hadn't missed a payment, the issue probably never would have come to light. But that doesn't make it legal or ethical. Nor does it lessen your liability if you're the one with the bad luck to get caught. Meet The Attorneys
Joyce M. Bergmann Ms. Bergmann received her Juris Doctor from the University of Denver College of Law, in 1987. Her practice emphasizes Real Estate, Civil Litigation, Appeals, and Association Law.
Gregg A. Greenstein Mr. Greenstein received his Juris Doctor from St. John's University School of Law, in 1987. His practice emphasizes Family Law, Divorce, Mediation, Arbitration, Adoption, Litigation, Business Fraud, Landlord Tenant Disputes, and Real Estate. |
