Thanks to my friend and real estate attorney,  Mark Strombotne,  who has prepared a list of new California laws that affect real estate for 2012.   Here are a couple that are most interesting with a link to his website to cover them all and a more detailed description of the law:

• Water Conserving Plumbing:  The TDS will be modified to include a question as to whether the property has water conserving fixtures (shower head, toilet, etc).  In addition the law includes a couple of other issues that you should understand.  After Jan. 2014,  if a house is remodeled ,  a homeowner must upgrade to water conserving fixtures to get a final permit.  And,  by 2017,  ALL houses will be required to to have these fixtures in their home.

• Owner’s right to rent Condos or tow homes:  A homeowner association can only restrict renting one of these units if the restriction existed when they purchased the unit.   And,  HOA docs are supposed to clearly describe any restriction that exist.
• Recycling:  An owner of an apartment house of more than 5 units must arrange to provide recycling services for the building.  Also, a landlord can require their tenants to separate their recycle their waste.

• Domestic Violence:  A tenant who is a victim of domestic violence may terminate their tenancy  if done within 180 days of the incident.

• Tenant Smoking Ban:  A residential landlord can prohibit smoking inside or outside the building if it is included in the rental or lease agreement.

• Real Estate Office Managers: A broker can legally appoint someone else to supervise and manage the office.  Under the new law (B&P Code 10164),  the office manager is subject to disciplinary action by the DRE for failing to properly supervise the day to day operations of their agents.

• DRE fines: The DRE can issues fines up to $2500 if they believe the Licensed person violated DRE rules or if an unlicensed person engaged in licensed activities.

• Tax Delinquency:  If a person fails to pay their taxes to the state of California,  DRE may suspend or refuse to renew an agents real estate license.

For more laws and a better description of these i have mentioned.  click here to go to Mark’s newsletter.  You also may want to signup for his monthly newsletter.  It is always informative.

More next time.

Guy Berry,  the industry’s risk manager.

Http://www.guyberry.com

I took a break from my real estate and real estate expert witness work to attend the Keller Williams national convention, called Family Reunion.  I and 9000 of my best friends were in Orlando, Florida from Sunday until Wednesday.  Many of the leadership stayed over till Friday.  To say it was amazing would be an understatement.  They offered more than 300 classes,  all taught by agents who actual do whatever they were teaching.  But, was most amazing was their volume and their age.  I attended one class where the lowest volume on the panel was 75 closings,  while most had 200 or more.

The big change is teams and using social media to drive leads to the agents.  Keller Williams in the book,  Millionaire real estate agent,  shows an agent how to grow their business by hiring the right team members,  starting with an executive assistant ….not a $10 per hour gofer to run copies.  In fact,  KW offers a 2 day and 4 day class on Recruiting,  hiring and motivating your team.  Since KW agents work at a 100% commission plan after X dollars,  what other company would help you build a team?

Another announcement was that KW paid $30 Million or so in profit share back to their agents in 2011 and have paid over $350 million since the program began.  Our leader,  Gary Keller,  ask the question.  What if they had taken the $350 million and used it to BUY companies like the currently largest company has.  INTERESTING QUESTION.

The other announcement was that Keller Williams is on track to become the largest company in North America in 2012.  This combined with statistics showing that KW actually grew in unit sale,  dollar volume,  sales per agent and several other categories,  while other company (and the entire housing market) was down substantially.  Interestingly,  well respected REAL TRENDS reported that Realogy,  owner of Coldwell Banker,  ERA,  Century 21 and Better Homes and Gardens decided to wait to release their 2011 numbers until after the Keller Williams Family Reunion events.   Hummmm.  Bad news to report?

I am madly in love with Keller Williams for the way their treat their agents,  their integrity and their motto …”GOD, FAMILY, BUSINESS,  in that order”

Contact Guy Berry 408-690-2998 for further information.

In many of my litigation cases where I work as an expert witness, one of the claims against agents surrounds the issue of disclosure documents and inspections.  I would think even the dimmest bulb in our business should know that the agent has to review the disclosures.   So,  how do agents get into trouble:

• Failure to point out red flags: The reason that an agent reviews the disclosures is to see where the mine fields are.  Many agents tell me that instead of sending the disclosures to their client as they receive them,  they wait until they have them all.  Then,  they schedule a sit down meeting to review all the disclosures and inspections together.

• Tips of the iceberg? What I mean here is look for those things that seem minor but could be hiding a much bigger issue.  For example, a buckled floor in the bathroom gets bid by the Pest Company for $400,  which is the cost of  replacing the vinyl and minor under-lament.   The truth is that it might be thousands, if the damage goes into the structure or under the tub.  And,  was it caused by a leak?  Is there mold?

• Seller Disclosure Docs: Lots of issues show up here.  Are the form complete?  Did the seller explain why they answered YES?  Do they disagree with the inspection reports?  Do the disclosures agree with each other? (An example might be the TDS says no history of flooding,  while the pest report shows evidence of prior water).

• Did you point it out to the client? Too often,  the disclosures and inspections are sent to the client with the question,  “Do you have any questions? ”   Most clients don’t see the things you see, so it is your job to spot the issues and point them out to your client.  And,   if you are a listing agent,  you should spot the issues upfront and get them corrected,  instead of waiting for the buyer’s agent to find them.  And,  remember,  many of these cases happen many years after COE,  so make sure you document your disclosure so we can prove you actually did point out these issues.  Thank God for email.

• How did you follow up ? and,  it is not enough to point the red flags out.  California case law says that an agent should discuss the ramifications of the issue,  then give sound advice of what to do next.  That might include a further inspection,  a bid from a contractor,  checking governmental authority records, inquiring of the seller,  or a visit with an attorney.

A good majority of lawsuits would go away and I would not be able to be an expert witness if agents would follow these simple rules.

For more information,