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Weekly Q&As

Can a court-appointed guardian sell real property?

Release Date: 02/09/2016

QUESTION: I’ve been asked by someone who is acting as her mother’s guardian to list and seller the property where her mother used to live before she was moved into a skilled care facility.  The daughter has provided me a copy of a court paper appointing her as her mother’s general guardian.  It says among other things that the “[g]eneral guardian is fully authorized and entitled under the laws of North Carolina to receive, manage and administer the property, estate and business of the ward and to have the custody, care and control of the ward.”

My first question is, may I take the listing based on the court paper I’ve been given?  If the answer is yes, two other questions I have are, what’s the right way for a guardian to sign the listing agreement and does a guardian have to provide either of the disclosure statements?

ANSWER: A court-appointed general guardian may sell their ward’s real property, but according to Responsibilities of Guardians in North Carolina, published by the NC Administrative Office of the Courts, “[t]he ward’s real property may not be sold unless the general guardian or the guardian of the estate files a special proceeding seeking authority and approval of the court in advance” (emphasis added) (see pg. 8).  Therefore, in our view, you would be advised not to take the listing unless the daughter gets court approval to sell her mother’s property (if she hasn’t already).  Also, note that any contract to sell the property is subject to court approval before the sale can close.  We believe this is a material fact that should be disclosed to prospective buyers as it is a fact affecting the ability of your principal to complete the transaction.

If she gets court approval to sell the property, the appropriate way for the daughter to sign legal documents, including a listing agreement, would be to sign her mother’s name followed by “by [daughter’s name], General Guardian.”  Alternatively, the daughter could sign her name, followed by “General Guardian for [mother’s name].”

The answer to your last question is no.  Transfers by a fiduciary in the course of administering a guardianship are exempt from the requirements of the Residential Property Disclosure Act according to Section 47E-2(a)(3) of the Act.  Thus, the guardian would not need to provide the Residential Property and Owners Association Disclosure Statement or the Mandatory Mineral, Oil and Gas Rights Disclosure Statement.

 

NC REALTORS® provides articles on legal topics as a member service.  They are general statements of applicable legal and ethical principles for member education only.  They do not constitute legal advice.  The services of a private attorney should be sought for legal advice.

© Copyright  2016. North Carolina Association of REALTORS®, Inc.  This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including  disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain.  Any unauthorized reproduction, use or distribution is prohibited. 

 

 

Buyer Letters and Fair Housing Laws

Release Date: 02/02/2016

QUESTION: My client recently lost out in a multiple offer situation for a home. Before the seller made their decision, the listing agent informed me that both offers were close. When I approached the seller’s agent afterward to ask why my client’s offer was not chosen, the seller’s agent informed me that the winning buyer penned a heartfelt “Buyer Letter” to the seller.

Do Buyer Letters constitute a violation of the federal Fair Housing Act? If not, should I include a Buyer Letter with offers I make in the future?

ANSWER:  Under the federal Fair Housing Act and North Carolina’s State Fair Housing Act, it is unlawful to discriminate against any person in a real estate transaction based that person’s race, color, religion, sex, handicap, familial status, or national origin.

In your question, we cannot tell whether a fair housing violation has occurred without knowing more facts. For example, if the seller decided to contract with the competing buyer because the Buyer Letter stated that the competing buyer was from Canada, the seller’s beloved home country, then the seller could be in violation of fair housing laws. On the other hand, if the seller chose the competing buyer because the competing buyer promised to hug and kiss all the trees in the backyard everyday, then the seller would not be violation of the fair housing laws.

These examples show that not every Buyer Letter will lead to a violation of the fair housing laws, but before you start submitting a letter from your clients with every offer, be aware that you and your client need to be careful.

Fair housing laws prohibit “blockbusting,” which is the practice of a buyer or buyer’s agent using fear to induce a seller to sell their home. To avoid this pitfall you would want to make sure that your Buyer Letter did not indicate or hint to the seller that if he or she did not sell you the house that other undesirable persons might move into the neighborhood. You also need to be aware that even if you and your client have done nothing wrong, a Buyer Letter could jeopardize the transaction. If the U.S. Department of Housing and Urban Development received a complaint from another buyer about your Buyer Letter, HUD could stop your transaction immediately and investigate.

As your question demonstrates, there are some circumstances where a Buyer Letter may be beneficial to you and your buyer. Just be sure to carefully weigh those benefits against the risks before you advise your client.

 

NC REALTORS® provides articles on legal topics as a member service.  They are general statements of applicable legal and ethical principles for member education only.  They do not constitute legal advice.  The services of a private attorney should be sought for legal advice.

© Copyright  2016. North Carolina Association of REALTORS®, Inc.  This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including  disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain.  Any unauthorized reproduction, use or distribution is prohibited. 

 

 

What are the rules for the delivery of Short Sale offers?

Release Date: 01/26/2016

QUESTION:  Several weeks ago, I listed a property for sale where my client's outstanding loan amount is higher than the list price of the home. I disclosed the potential of a short sale when I listed the property in the MLS. I just received an offer for the property. The Short Sale Addendum (Standard Form 2A14-T) was attached to the offer. Do I deliver that offer to my client or my client's lender? Or both? 

ANSWER:  The North Carolina Real Estate Commission has a rule (Rule A.0106(a)) that requires every broker to immediately, but in no event later than five days from execution, deliver any offer affecting real property to "the parties thereto". Contracts involving "Short Sales" are no exception. This means that you must immediately deliver any Short Sale offers to your owner-client. However, since your seller's lender is not a party to the Offer to Purchase and Contract, you would ordinarily have no duty to deliver that offer to that lender.

If your client decides to enter into a contract that includes the Short Sale Addendum, that contract will be contingent upon your client obtaining written approval of the Short Sale from any lienholders whose approval is needed in order for your client to close and convey good title. As the listing agent, you should offer to assist your client in obtaining those approvals.

Please note: once the first request for approval of a Short Sale has been submitted to any lienholder, the duties of the listing agent change vis-a-vis the lienholder. As noted in paragraph 6(a) of the Short Sale Addendum, and in paragraph 11 of the Short Sale Addendum to the Exclusive Right to Sell Listing Agreement (Standard Form 104), the NC Real Estate Commission requires listing agents to inform all lienholders of any additional offers that are received, as well as any contracts on the property, after a request for approval of a Short Sale has been submitted to any lienholder. There is one exception to this rule: if the Seller has hired an attorney to negotiate the terms of a Short Sale with the Seller’s lenders, the listing agent is not required to disclose the existence of additional offers to those lenders; that disclosure becomes the responsibility of the attorney.

 

NC REALTORS® provides articles on legal topics as a member service.  They are general statements of applicable legal and ethical principles for member education only.  They do not constitute legal advice.  The services of a private attorney should be sought for legal advice.

© Copyright  2016. North Carolina Association of REALTORS®, Inc.  This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including  disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain.  Any unauthorized reproduction, use or distribution is prohibited. 

 

 

Do I Have To Report Criminal Charges To the Real Estate Commission?

Release Date: 01/19/2016

QUESTION: An agent in my firm has just been charged with driving while impaired.  Don’t I as the firm’s broker-in-charge have the duty to report the charge against him to the Real Estate Commission?

ANSWER: Real Estate Commission Rule 58A.0113 requires that “[a]ny broker who is convicted of any felony or misdemeanor…shall file with the Commission a written report of such conviction or action within 60 days of the final judgment, order, or disposition in the case.” 

Since your agent has only been charged with the misdemeanor of driving while impaired, there is no obligation to report anything to the Commission at this time.  However, if he ultimately is convicted of DWI, he would be required to report the conviction to the Commission within 60 days of the date of the conviction.  The conviction can be reported online on the Commission’s website here or by completing and mailing a paper form available on the Commission’s site here

In any event, you are not required as the agent’s BIC to report the conviction; the reporting obligation lies with the agent.  Of course, you don’t want him to get in trouble with the Real Estate Commission. both for his sake and the sake of the firm.  Thus, you should make sure your agent is aware of the reporting requirement because he can be disciplined for failing to report the conviction, even though the conviction itself may not result in disciplinary action.

NC REALTORS® provides articles on legal topics as a member service.  They are general statements of applicable legal and ethical principles for member education only.  They do not constitute legal advice.  The services of a private attorney should be sought for legal advice.

© Copyright  2016. North Carolina Association of REALTORS®, Inc.  This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including  disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain.  Any unauthorized reproduction, use or distribution is prohibited. 

 

 

Latest Developments On The Use Of Drones

Release Date: 01/12/2016

QUESTION:  I received a drone as a Christmas present. Am I permitted to use it to photograph properties I am listing for sale? If not, are there any new regulations governing the use of my drone for recreational purposes?

ANSWER:  We wrote a Q & A on the subject of drones less than three months ago. You can access that article here. However, drones continue to be in the news and there is one new development you should be aware of. 

One thing that has not changed is the general rule: the commercial use of drones, including for real estate marketing, is prohibited by the Federal Aviation Administration ("FAA") unless the person or entity operating the drone has secured what is known as a "Section 333 waiver". That waiver will allow you to operate the drone in what are known as "low-risk, controlled environments". Operating without a waiver will subject you to the risk of substantial fines. You can find the application procedure described on the FAA's website.

One thing that has changed is the adoption of new rules requiring the registration of most drones in a national database. The FAA announced these new registration rules on December 14, 2015. Under these rules, owners of drones weighing between half a pound and 55 pounds are required to submit their names, home addresses and email addresses to the FAA. Registration is free if completed before midnight on January 20, 2016. After that, the fee is $5 for a three-year certificate of registration. Anyone who owned a drone before December 21, 2015 must register that drone by February 19, 2016. Anyone obtaining a drone after December 21 must register it before their first flight. Once registered, users must put their registration number on their machine, and have their registration card with them whenever they fly a drone. Failure to comply with the registration rules can result in criminal penalties, imprisonment and fines of up to $27,500. 

The purpose of the registration process is to make the skies safer. While there no current requirement for drone operators to undergo any flight education course, the drone registration process does obligate the drone owner to check a box acknowledging that he or she has read the FAA's basic principles of flight safety.

Registration of recreational drones can be completed online. Currently, drones used for commercial purposes can only be registered by paper. However, online registration of drones used for commercial purposes is scheduled to open by March 31, 2016.

Michael Huerta, the Administrator of the FAA, recently confirmed that the FAA is continuing to work on rules governing the commercial use of drones. The National Association of REALTORS® does not expect those rules to be issued before August 2016. 

NC REALTORS® provides articles on legal topics as a member service.  They are general statements of applicable legal and ethical principles for member education only.  They do not constitute legal advice.  The services of a private attorney should be sought for legal advice.

© Copyright  2016. North Carolina Association of REALTORS®, Inc.  This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including  disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain.  Any unauthorized reproduction, use or distribution is prohibited.