The legalities and concerns surrounding broker payment of compensation, incentives, referral fees, rebates and inducements will be among items discussed during the next IAR Legal Webinar, beginning at 9:30 a.m. Aug. 20. The legal team will also cover some recurring issues that have arisen in the context of the relationship between the brokerage companies and their clients.
The hour-long, members-only webinar, “Back to School, Fall 2015,” will be hosted by IAR Legal Helpline Attorney Jeffrey T. Baker and IAR Legal Hotline Attorney Betsy Urbance. Also on the agenda are updates about drones, TRID and developments with state legislation.
If you have a question you’d like addressed during the webinar, please send it in advance to firstname.lastname@example.org. Although questions will be answered during the webinar, priority will be given to those received in advance.
Since space is limited for webinars, members who aren’t able to log in on Thursday morning will be able to access a recording within 48 hours of its completion.
(l to r) Lawrence Yun, Dan Wagner and Bill Brown
Dan Wagner told REALTOR® association leaders on Monday how important it is for Congress not to repeal Section 1031 like-kind exchanges.
Wagner, president-elect of the Chicago Association of REALTORS® and a member of the IAR board of directors, appeared on a real estate economic update panel with NAR First Vice President Bill Brown and NAR Chief Economist Lawrence Yun. The panel was held at the NAR Leadership Summit for incoming association leaders.
Wagner, who is Senior Vice President Government Relations for the Inland Real Estate Group of Companies, Inc., has been actively involved in pushing for congressional support of the 1031 Exchange legislation.
Wagner said the 1031 exchange is an important tool for commercial property owners. Through 1031 Exchange rules, companies are better able to create jobs by putting money into renovating properties, making them more energy efficient and following green initiatives, Wagner said.
1031 Exchanges are tax code provisions which allow investors to defer capital gains taxes when they sell a property and purchase another similar property. Inland Real Estate Group deals extensively in commercial office and retail properties, and has frequently used the 1031 Exchange rules.
During their discussion, Wagner and Yun touched upon the subject of rising interest rates and their effect on capitalization rates. Wagner noted that while suburban office buildings, unanchored strip centers and interior malls are suffering from vacancies and decreasing rents, other retail establishments and apartment rentals seem to be very profitable.
Have you ever heard of a broker whose client’s money was stolen during a closing?
In the NAR’s latest edition of “Window to the Law,” that’s just one of the real-life scenarios you can learn to protect yourself from. In “Cyberscams and the Real Estate Professional,” NAR Associate Counsel Jessica Edgerton says hackers interested in stealing large amounts of money during closings will gain access to a broker’s computer well in advance of the transaction and surreptitiously collect enough details to allow them to impersonate one of the parties.
They may send an email to a broker, pretending to be one of the parties involved in the transaction, hoping to get the buyer to transfer money electronically into a phony account.
She says steps can be taken to prevent this from happening. Check out the video now. Or you can refer to a copy of the slides from the video to do some valuable research.
In the July edition of D.R. Legal News, a commercial real estate brokerage firm lost a case in Michigan and more than $20,000 in litigation costs after refusing to release a broker’s lien.
It’s just one of six case studies summarized by Lisa Harms Harzler of Sorling Northrup Attorneys, in this issue of D.R. Legal News. Get the details now.
This situation began with Anton, Sowerby & Associates getting an exclusive listing agreement to sell or lease a commercial property owned by GAM Properties. The brokerage introduced a potential buyer (Mr. C’s Lake Orion, L.L.C.) to GAM. But after GAM defaulted on its mortgage, an appointed receiver negotiated a sale to Mr. C’s for $1.2 million and offered to settle the brokerage firm’s claim for a commission.
The parties could not reach an agreement on the commission, so the brokerage firm recorded a broker’s lien for $60,000. In order to close the sale, the receiver and Mr. C’s funded an escrow account for $75,000 to cover the brokerage firm’s claim and asked for a release of the lien.
Anton, Sowerby & Associates refused to release the lien, and Mr. C’s filed a counterclaim accusing the brokerage firm of “slandering its title.”
Slander of title, writes Hartzler, is a remedy for malicious publication of false statements that disparage an owner’s right in property. The Michigan Appelate Court decided that the brokerage firm properly recorded its broker’s lien prior to the sale of the property, but was obligated under Michigan’s state law to release the lien when the escrow was created. The persistent failure to release what was then a false lien demonstrated sufficient malice to constitute slander of title. The court affirmed an award to Mr. C’s for all of its litigation costs, which totaled more than $20,000.
IAR members who are designated realtors® for their real estate office can check their email for the July issue of D.R. Legal News and the story about TRID, otherwise known as the new integrated disclosure rule.
The latest proposal by the Consumer Financial Protection Bureau includes an effective date of Oct. 3, although that date hasn’t formally been approved, writes Jeffrey T. Baker, Sorling Northrup Attorneys, IAR Transaction Helpline. It’s just one of six important pieces of information he mentions in the July D.R. Legal News.
The second item on Baker’s list is that the new loan estimate form will replace the initial truth-in-lending and Good Faith Estimate forms. The new loan estimate form is intended to provide consumers with a more accurate estimation of the true financing and closing costs. He says each estimate must fall within a prescribed tolerance or a refund to the consumer from the lender may be necessary.
Third item on Baker’s list is that the loan estimate must be delivered to the consumer within three business days of a loan application. Whenever applicants provide their names, Social Security Numbers, incomes, addresses of properties to be purchased, the estimated values of the properties and the loan amounts to the lenders, applications have been made.
Get the other three pieces of TRID information from Baker by reading the July D.R. Legal News.