ALWAYS Identify the Square Footage Source in Your Listings

The National Association of REALTORS® recently reported on a lawsuit decided by the Texas Court of Appeals that all REALTORS® should pay attention to. In the case, the trial court and appellate court decided that a REALTOR® could be held liable for Misrepresentation and Deception Trade Practices (our version of c. 93A) for incorrectly listing a property's square footage on an MLS, that the REALTOR® obtained from the county's appraisal district.

The basic facts of the case are this:

• REALTOR® obtained a property's square footage from the county appraisal district.
• REALTOR® listed the property on MLS with this square footage, and the MLS automates the price/square foot (like MLS-PIN).
• The source of the Property's square footage was NOT a required field on this MLS, but testimony at trial showed that it was standard practice in the industry to identify this source. Because of a clerical error, THE SOURCE OF THE PROPERTY'S SQUARE FOOTAGE WAS NOT IDENTIFIED ON THE MLS LISTING.
• Buyers purportedly based their valuation (at least in part) in the property being listed under the average price/square foot.
• Buyers actually did their own search and verified the county appraisal's office sqaure footage number.
• Before the purchase, Buyers did sign a form provided by REALTOR® that said "I/we have not relied upon any statement given to me/us by the REALTOR and/or his/her associates with regard to the property, and my/our decision to make an offer on the property and to subsequently purchase the property is based on my/our independent decision with or without legal counsel." The form also said, "The Buyer is advised to verify all information important to him/her and to ask the appropriate questions of the appropriate authorities himself/herself or through an attorney with respect to important issues such as . . . size of structure . . . . Any statements with respect to problems or with respect to the availability or existence of any of these items which were made by the REALTOR and his/her associates were made based on information given to the REALTOR by the Seller/Owner and/or government agencies, and/or others, and there is no intention that the Buyer rely on the statements of the REALTOR and his/her associates, and the Buyer is urged to confirm any such statements on his/her own."
• In this case, Buyers actually lived in the Property prior to the purchase and even made making improvements to the house, including painting the interior walls and replacing the flooring in the kitchen and master bathroom.
• Following receipt of a copy of the lender's appraisal, which calculated the square footage as less than the that listed in the MLS, Buyers sued REALTOR® on misrepresentation, and deceptive trade practices and won.

Bottom line, ALWAYS, ALWAYS IDENTIFY THE SOURCE OF A PROPERTY'S SQUARE FOOTAGE WHEN YOU ARE LISTING A PROPERTY OR REPRESENTING A BUYER.

Click here to read the Texas Court of Appeals opinion.

Get Out and Vote!

Realtors®, today is election day. We encourage you all to do your civil duty and get out and vote. If you do not know where your polling place is, check www.wheredoIvoteMA.com.

Also, there are three ballot initiatives on the ballot.

• Question 1 would repeal the State Income Tax.
• Question 2 would decriminalize first offense possession of marijuana.
• Question 3 would ban greyhound dog racing.

Click here for additional information.

Transfer Tax Call to Action

Realtors®, this week Massachusetts Association of Realtors® President, Susan Renfrew put out a Call to Action to oppose proposed transfer taxes in Martha's Vineyard and Nantucket, which will likely be heard and voted upon by the State Senate this week (Senate Bills S. 2546 & S.2544).

Realtors® strongly oppose real estate transfer taxes as bad tax policy for the following reasons:

1. Community-wide Responsibility. A community wide responsibility should be paid for by the entire community. Property taxes are inequitable and discriminatory as it would single out a small segment of the population, specifically home buyers and sellers, to pay for a community-wide need.
2. Exclusionary & Unstable Revenue Source. Transfer taxes are exclusionary because it would increase the cost of home ownership and in effect create an additional barrier to entry for an already expensive part of the state. Further, the real estate market is highly sensitive to economic downtowns as sales may vary greatly from year to year.; therefore this tax would provide an unstable source of revenue for a current and ongoing community need. However well intentioned, the fact that a transfer tax may contain a "sunset" provision does not change the problematic nature of this tax scheme.
3. Subert Prop. 2½. The tax would subvert the voter approval process inherent in a Proposition 2½ override, in which voters can decide for themselves whether to increase their own property taxes. In fact, both islands have among the lowest property tax rates in the entire Commonwealth.
4. CPA, 40B, 40R, 40S. The Legislature has already given all cities and towns many equitable tools to create affordable and workforce housing through passage of the Community Preservation Act, Chapter 40R, Chapter 40S and Chapter 40B. These tools are available for all communities to use. According to information provided by the Dukes County Regional Housing Authority last year, 3 of the 6 communities on Martha's Vineyard did not have a single unit of 40B housing.
5. Foreclosures & Short Sales. Today's housing market conditions, with increasing foreclosures and "short sales," make transfer taxes even more detrimental to home owners. Because transfer taxes reduce one's equity, homeowners attempting to avoid foreclosure or selling their home for less than the outstanding mortgage – selling short – may face new burdens just to sell their home. For those with little or no equity in their home, these transfer taxes could force sellers to sell short or else, in some cases, face foreclosure.
6. Equity Stripping. It is important to remember that, unlike a home purchase which can be financed, payment of a sales tax CANNOT be financed. Such a tax would cost thousands of dollars at closing taken from the seller's proceeds assuming that the seller has equity in their home at the time of sale. In some ways, a transfer tax can be looked at as a type of municipal "equity stripping" of the value of one's home.
7. Voter Representation. Finally, the fact that Martha's Vineyard and Nantucket already have a significant transfer tax (2% of the sale price) in place for the acquisition of open space makes the argument for rejecting S.2546 and S.2544 even more compelling. Furthermore, most of the people who would pay this tax will not be able to vote on it. Many, if not most, of the purchasers who will pay this transfer tax are not residents of the communities of Martha's Vineyard and Nantucket.

For the preceding reasons, the NSAR Government Affairs Committee urges all Realtors® and like-minded citizens to contact your State Senator and urge them to vote “NO” on S.
2546 and S. 2544.

For comments/questions, please do not hesitate to contact us at governmentaffairs@northshorerealtors.com.

NAR Midyear Legislative Meetings

The National Association of Realtors® Midyear Legislative Meetings is this week.

Realtors® can click here to see the Events Reports, Lending Report, Tax Report, Housing Report, and Legislative Talking Points.

CEO Susan Kline, President Marilyn Jarvis and President-Elect David Kres will be representing North Shore Association of Realtors® at the Midyear Legislative Meetings.

Chapter 40B Recently Withstands Ballot Drive Challenge

Chapter 40B recently withstood a potentially significant challenge to its status as one of the Commonwealth’s most important housing law since its creation in 1968. According to the Massachusetts Secretary of State’s Office, a signature drive to repeal the law fell more than 35,000 signatures short of the 66,593 needed to place a question on the November 2008 statewide ballot. Consequently, the soonest any similar petition to repeal Chapter 40B could be on the ballot would be 2010.

Chapter 40B has been responsible for producing over 48,000 units of mixed-income housing, including housing for the elderly, single-family subdivisions that include affordable units for town residents, multifamily rental housing developments, and mixed-income condominium or townhouse developments. Its goal is to encourage the production of affordable housing in all cities and towns throughout the Commonwealth by reducing unnecessary barriers created by local approval processes, local zoning, and other restrictions. The standard is for communities to provide a minimum of 10% of their housing inventory as affordable. A total of 51 cities and towns have now met that standard.

The Citizens’ Housing And Planning Association have an excellent website with Chapter 40B information. Click here to view the website.

Hamilton/Wenham Meeting to Discuss Transfer Taxes

The Government Affairs Committee just learned that there will be a meeting tonight, Tuesday, December 11th at 7:30 p.m, at the Buker Multipurpose Room, where Hamilton and Wenham Boards of Selectmen and representatives from the Finance Committees for each town will meet with community members to discuss, amongst other items, a new potential real estate transfer tax.

Realtors® oppose real estate transfer taxes as bad tax policy for the following reasons:

1. A community wide responsibility should be paid for by the entire community. Property taxes are inequitable and discriminatory as it would single out a small segment of the population, specifically home buyers and sellers, to pay for a community wide need.
2. Transfer taxes are exclusionary because it would increase the cost of home ownership and in effect create an additional barrier to entry for an already expensive part of the state. Further, the real estate market is highly sensitive to economic downtowns; therefore this tax would provide an unstable source of revenue.
3. The tax would subvert the voter approval process inherent in a Proposition 2½ override, in which voters can decide for themselves whether to increase their own property taxes.
4. The Legislature has already given all cities and towns many equitable tools to create affordable and workforce housing through passage of the Community Preservation Act, Chapter 40R, Chapter 40S and Chapter 40B. These tools are available for all communities to use.

You can find other Realtor® talking points from the Massachusetts Association of Realtors® website by clicking here.

NSAR highly encourages all Realtors® who live or work in Hamilton and Wenham to attend this meeting and voice your opposition to real estate transfer taxes.

State Grant Helps Landowners Improve Wildlife Habitat

According to the Newburyport Current, Massachusetts Division of Fisheries and Wildlife is accepting grant applications through Dec. 21, from private landowners, sportsmen’s clubs, land trusts and nonprofit organizations interested in enhancing wildlife habitat on their properties. MassWildlife’s Landowner Incentive Program reimburses private landowners for up to 75% of the cost of managing land to improve habitat for declining wildlife species. The Newburyport Current reports that the Landowner Incentive Program has provided more than $2.1 million for 108 habitat improvement projects since the first round of grants in 2005.

This year’s grant round will give preference to proposed projects to maintain grasslands and create young tree and shrub land habitats. Funding for the Massachusetts program is allocated by the U.S. Fish and Wildlife Service under a nationwide Landowner Incentive Program. For information about the Landowner Incentive Program and the grant application and criteria, click here.

Read the entire Newburyport Current article

November 9, 2007 Legislative Breakfast

On Friday, November 9th, NSAR sponsored its 4th Legislative Breakfast in 2007, attended by State Senator Steven Baddour (D-1st Essex) and State Representative Harriett Stanley (D-2nd Essex).

The Breakfast was held at ABC Home Inspections, Inc. and ABC Real Estate Training Institute in Haverhill; NSAR would like to thank Affiliate Member Andy Consoli for allowing us to use his conference room and facilities (seen here).

MAR Associate Counsel, Margy Grant, presented the five legislative topics on the agenda and gave the legislators the Realtor® position on each issue. These issues included:

1. Transfer Taxes. Realtors® oppose real estate transfer taxes as bad tax policy for several reasons including: a community wide responsibility should be paid for by the entire community; a transfer tax is inequitable and discriminatory as it singles out a small segment of the population [specifically home buyers & sellers] to pay for a community wide need; a transfer tax is exclusionary because it would increase the cost of home ownership; a transfer tax would be an unstable source of revenue due to the instability of the real estate market; a transfer tax would subvert the Proposition 2 ½ override process; the state legislature has already given cities and towns many equitable tools to create affordable and workforce housing through passage of Community Preservation Act, Chapter 40B, and Chapter 40R and 40S.

2. An Act Protecting Children from Poisoning. Proposed legislation SB. 1230 would (a) require lead inspections on all sales of property, instead of at the buyer’s option; (b) require owners and sellers of property to abate lead in soil and tap water; and (c) require letters of compliance for rental units to be renewed every two years, regardless of whether children reside in the unit, or whenever there is a change in occupancy, if that is earlier.

3. An Act Providing Information to Real Estate Buyers. Proposed legislation H. 323, S. 201 is a little unclear but seems to suggest that a homeowner would be expected to review the databases of nearly a dozen different governmental agencies and then create some type of report or hire and pay someone to do it for them. It is not clear how many millions of dollars this could cost Massachusetts homeowners every year or that buyers and sellers could review this data and provide an accurate assessment of what implications, if any, information on one of these databases would have on a home.

4. An Act Relative to the Disclosure of Wetlands on Property. Proposed legislation H. 767 seeks to require that a real estate broker disclose to prospective buyers that a property to be sold may be in its entirety, or in part a wetland as defined in Chapter 131 of the General Laws of or any other regulation or local by-law of the municipality where the property is located. It is the Realtor® position that however well intentioned this proposal may be, it would create an impossible standard for real estate licensees to meet and generate confusion for consumers.

5. An Act Relative to Smart Growth Housing Trust Fund (S. 132) and An Act Relative to Financing the Smart Growth Housing Trust (H. 160). Realtors® support both these bills, as it would create a steady stream of revenue to support the continued success of 40R Smart Growth districts.

Danvers Board denies Chapter 40B Permit for 71 Condos

The Salem News reports that the Danvers Board of Appeals denied a permit for developer Michael Demerjian to build 71 condominiums off Route 114.

Demerjian’s designs were to build on 10 acres at the former site of Natalie's restaurant and the Rio Grande Café. The project was to be built under the State’s Chapter 40B permitting regulation, a state law that allows developers to bypass most local zoning regulations if they set aside a portion of their project for affordable housing.

The development would have added 18 affordable units priced at $157,700.

Read the entire Salem News article

Haverhill, Neighbors fight Proposed 40B Project

The Eagle Tribute reported that developer Brian Donahue, of Donahue Builders in Tewksbury, plans to ask the Commonwealth to approve a 32-unit condominium complex under the state’s Affordable Housing law, Chapter 40B.

The development would be built off Route 97 in the Western part of the City. Chapter 40B allows developers to circumvent local zoning rules in exchange for building housing with at least 25% affordable units in communities with less than 10% of affordable housing stock. According to the Tribune, Haverhill has more affordable housing than most of its surrounding communities, however the stock is currently about 9.5%, which is not enough to block a Chapter 40B proposal.

Mayor James Fiorentini is promising to fight Donahue’s proposal if it comes before the City.

Read the entire article.

October 4, 2007 Legislative Breakfast

On October 4, 2007, NSAR hosted its second Legislative Breakfast in 2007. The event was attended by State Representative Doug Petersen (D-8th Essex), Tom Damario, Aide to Representative Robert Fennell (D-10th Essex), and Josh Harold, Aide to Representative Steven Walsh (D-11th Essex).

State Senate was in session, so unfortunately Senator Thomas M. McGee (D-3rd Essex & Middlesex) and Senator Richard R. Tisei (R-Middlesex & Essex) were unable to attend.

MAR Associate Counsel Margy Grant presented the Realtor® position on the following topics:

1. New proposed Transfer Taxes (S. 1776; S. 1773; H. 3959)
2. New proposed Lead Paint law (SB. 1230)
3. New proposed mandatory Seller’s disclosure in connection with environmental issues (H. 323, S. 201)
4. New proposed mandatory disclosures for real estate licensees in connection with Wetlands (H. 767)
5. Smart Growth funding for Chapter 40R (S. 132, H. 160)

NSAR and the Government Affairs Committee extends a sincere appreciate to the legislators who participated and to all those that attended.

Next Legislative Breakfast: Thursday, October 4, 2007, 8:30am

The next North Shore Association of Realtors® Legislative Breakfast will be held on Thursday, October 4, 2007, from 8:30am to 10:00am. All NSAR members who live in Lynn, Saugus, Lynnfield, Marblehead, Swampscott, and/or Nahant are encouraged to attend.

Topics will likely include:

1. Transfer Taxes.
2. An Act Protecting Children from Poisoning (SB. 1230)
3. An Act Providing Information to Real Estate Buyers. (H. 323, S. 201)
4. An Act Relative to the Disclosure of Wetlands on Property. (H. 767)
5. An Act Relative to Smart Growth Housing Trust Fund (S. 132) and An Act Relative to Financing the Smart Growth Housing Trust (H. 160).

Click here to registry of get more information.

September 20, 2007 Legislative Breakfast

This morning, NSAR sponsored its first Legislative Breakfast in 2007, attending by State Representative Theodore Speliotis (D-13th Essex), State Representative Joyce Spiliotis (D-12th Essex), Representative John Keenan (D-7th Essex), and Beth Murray, Aide to Senator Frederick Berry.

MAR General Counsel and Government Affairs Director, Steve Ryan, presented the five legislative topics on the agenda and gave the legislators the Realtor® position on each issue.

These issues included:

1. Transfer Taxes. Realtors® oppose real estate transfer taxes as bad tax policy for several reasons including: a community wide responsibility should be paid for by the entire community; a transfer tax is inequitable and discriminatory as it singles out a small segment of the population [specifically home buyers & sellers] to pay for a community wide need; a transfer tax is exclusionary because it would increase the cost of home ownership; a transfer tax would be an unstable source of revenue due to the instability of the real estate market; a transfer tax would subvert the Proposition 2 ½ override process; the state legislature has already given cities and towns many equitable tools to create affordable and workforce housing through passage of Community Preservation Act, Chapter 40B, and Chapter 40R and 40S.

2. An Act Protecting Children from Poisoning. Proposed legislation SB. 1230 would (a) require lead inspections on all sales of property, instead of at the buyer’s option; (b) require owners and sellers of property to abate lead in soil and tap water; and (c) require letters of compliance for rental units to be renewed every two years, regardless of whether children reside in the unit, or whenever there is a change in occupancy, if that is earlier.

3. An Act Providing Information to Real Estate Buyers. Proposed legislation H. 323, S. 201 is a little unclear but seems to suggest that a homeowner would be expected to review the databases of nearly a dozen different governmental agencies and then create some type of report or hire and pay someone to do it for them. It is not clear how many millions of dollars this could cost Massachusetts homeowners every year or that buyers and sellers could review this data and provide an accurate assessment of what implications, if any, information on one of these databases would have on a home.

4. An Act Relative to the Disclosure of Wetlands on Property. Proposed legislation H. 767 seeks to require that a real estate broker disclose to prospective buyers that a property to be sold may be in its entirety, or in part a wetland as defined in Chapter 131 of the General Laws of or any other regulation or local by-law of the municipality where the property is located. It is the Realtor® position that however well intentioned this proposal may be, it would create an impossible standard for real estate licensees to meet and generate confusion for consumers.

5. An Act Relative to Smart Growth Housing Trust Fund (S. 132) and An Act Relative to Financing the Smart Growth Housing Trust (H. 160). Realtors® support both these bills, as it would create a steady stream of revenue to support the continued success of 40R Smart Growth districts.

Lead Paint Tax Credit

A new proposed law, sponsored by State Senator Richard Tisei (R-Wakefield), seeks to increase the tax credit for the de-leading of homes for the first time in 13 years.

The Realtors® support the passage of SB 1827 “An Act Encouraging the Deleading of Residential Units”, which would increase the tax credit for de-leading homes from $1,500 to $2,500 per unit.

This bill would apply to “residential premises”, including single-family homes, condominiums, multi-family individual units, and apartments.

This bill would not affect the requirements of the Commonwealth’s Massachusetts Department of Public Health’s Childhood Lead Poisoning Prevention Program (CLPPP).

There are also several other financial assistance programs for de-leading residential premises.