The great recession of 2008 can be shown to have been primarily caused by carelessness, greed, and loose underwriting within the residential real estate market. Lawmakers have continued to pass new laws intended to more tightly regulate this necessary but potentially volatile market. Each year a number of new laws are passed for the purpose of limiting imprudent or unethical practices within the market,
2017 was not different than other years in that there were some new real estate laws that are of interest to people who live in their homes and people who rent them. Some of the more interesting new laws deal with:
- Water Conservation Disclosure - Going way back in time, there were no regulated restrictions on the use of water by various in-home fixtures. That has changed recently with the introduction of new regulations limiting such water use. For example toilets were limited to 1.6 gallons per flush, faucets to 2.2 gallons per minute and showers to a maximum of 2.5 gallons per minute. The new law for 2017 deals not with the law to restrict fixtures but requirements for disclosure of compliance with the regulations. There is currently no penalty for having older fixtures that do not comply with these restrictions; however, sellers are now required to disclose this non-compliance to potential buyers or they will be liable to the buyers for any future non-compliance issues. This new law applies not only to residential but also multi-family and commercial properties.
- Condiminium Owner-Occupancy Percentage - In the past condominium owners have been required to occupy a minimum of 50% of the property under FHA requirements. These requirements have now been reduced to 35%. The major effect this law will have is that investors in condominium properties will now be able to rent a greater portion. This will create additional revenue and promote more willingness to invest in these type properties.
- PACE Loan Disclosures - The PACE loan program allowed homeowners to borrow money for energy programs such as solar panels and then instead of requiring loan payments, the loans were repaid as part of property tax bills. This often resulted in homeowners being forced to payoff the loan if they wanted to refinance or sell the home. The new law not only requires full disclosure of this issue, but also grants the buyers a 3 Day Right of Recision.
As the real estate industry is one of the most highly regulated, it is very difficult for a buyer, seller, lender or realtor to fully understand all of the laws pertaining to a transaction. To make sure all of the bases are covered, the most prudent plan is to engage a real estate attorney like Ianniello Anderson, P.C. to take care of any issues, questions or concerns that may exist.