DEAR BENNY: Almost six months ago, we made an offer to buy a condominium, under a short-sale arrangement. Our real estate agent called it a clean deal, as we are paying cash and all closing costs.
Our agent has called the listing agent and I have called the bank that holds the current mortgage (although they say they cannot discuss this with me for legal reasons) to try to learn why we cannot get an answer to our offer. My wife and I are anxious because we want to resolve this one way or the other. Didn’t our president get a new law enacted that is forcing the banks to respond promptly? We need some help, and the bank is dragging its feet. –Bob
DEAR BOB: Although the federal government is attempting to get lenders to shorten the time they have in which to respond to short-sale proposals, there currently is no federal law on this subject.
However, on Nov. 30, 2009, the Department of the Treasury issued guidelines that lenders are encouraged to follow. It is a complex process. Homeowners who are underwater can request that their lender preapprove short-sale terms. Although it is not clear how long the lender (or the servicer of the mortgage) has to respond, once the lender determines the amount it will be willing to accept from a short sale, the borrower has 120 days in which to find a buyer for the property.
When the homeowner enters into a sales contract with a potential buyer, and assuming that the lender has already preapproved the terms and conditions for a short sale, the lender must approve or disapprove the short sale within 10 business days after receiving the sales contract.
Accordingly, if you are a homeowner in financial trouble, talk with a real estate agent to start the preapproval process. This will take the most time, so you should begin this as soon as possible. There is a lot of paperwork involved that has to be presented to the lender.
The Treasury directive requires that once the short sale takes place, the homeowner/seller must be fully released from future liability. This has been a real problem in the past, since many lenders — after allowing a short sale — were still going after their borrowers for the deficiency — the difference between the net sales proceeds and the outstanding balance of the loan.
You can access this directive from the Web site of the Home Affordable Modification Program. Although lenders are encouraged to follow the guidelines now, technically they do not take effect until April 5, 2010, and will sunset Dec. 31, 2012.
DEAR BENNY: I am shocked by the extent of the deception and downright fraud being perpetrated on timeshare sellers through so-called "timeshare marketing" companies. My wife has been handling the listing of our "timeshare week" and has signed up with at least four companies. Each promise quick results or money back.
Once you start you are on the "list" and start receiving calls from multiple "boiler room" operations stating that they have an offer in hand, usually at more than you have listed the property at. All they want to proceed with the deal is $900 to cover expenses with title search, etc. Most if not all of these outfits operate out of Florida in the Orlando and Palm Beach areas. …CONTINUED
I have contacted the attorney general’s office of Florida and basically was told to be careful and not to give any money up front. These companies swear that they have buyers and that we should trust them.
This could be one of the biggest scams presently going on in the U.S. The targets are usually seniors, like my wife, who used her Social Security money to advance a couple of these companies. Of course, they never call back. It would be interesting to see how many of your readers have been approached by these operations and what their experience has been.
If you question the callers too much or ask hard questions, they simply hang up. I have written a couple of Better Business Bureaus in Florida and they are sympathetic but have no remedy.
I suggest it is time for the attorney general of Florida to conduct an investigation into this matter and grand juries should be convened to also address the issue. To date, despite numerous requests, we have not had any money returned.
I have a fairly good e-mail record of communications with these companies, many of which simply go out of business and open up somewhere else in the state. Florida is too lax and senior citizens are being hurt. –Jack
DEAR JACK: Many thanks for sending me this information. Because it is very important, and because a lot of the e-mail questions I receive involve timeshares, I am sharing your comments with my readers.
I can’t force the attorney general of Florida — or any state for that matter — to investigate these companies, but if enough consumers send complaints to their elected representatives (both in Congress as well as at the state and local level), perhaps some action will be taken.
Furthermore, because so many people want to sell their timeshare interests, perhaps the industry itself should create a mechanism for this.
In the meantime, if you are approached by a timeshare salesperson, here are some suggestions. First, ask yourself: "Do I really want this? Is it really worth the money?"
Next, don’t be pressured into signing up the first day. Despite statements by the salesperson that all benefits are good for today only, sleep on the proposal for at least one day. High-pressure sales tactics are rampant in the timeshare industry. …CONTINUED
Ask for copies of all documents and contracts that you will have to sign, and take them to your lawyer for review. If the salesperson tells you that you cannot take those documents with you, politely tell him or her "thank you" and walk away.
Finally, if you are trying to sell a timeshare, follow the advice of the attorney general. Do not give anyone money up front. You can sign a contract declaring that if your timeshare is in fact sold, the company that located the buyer will be paid when the closing takes place.
DEAR BENNY: I am the president of a condominium association. We are presently experiencing a roof leak from a limited common element (patio over an area of the roof). This area can be accessed only through the owner’s unit, as it is on the top floor of the building and is for the owner’s use only.
Who has the responsibility to repair these leaks: the board or the unit owner? This has not become an issue to date with the owner, but it could in the future and I was wondering how the board should proceed on this matter if it does become an issue. –Dan
DEAR DAN: You have called this a patio, and I call it a "roof deck." Either way, it is a limited common element, which means that although it is not within a unit (it is technically located in a common area) not all owners have access to that area.
You have to review your association’s legal documents and especially the bylaws. Most documents I have seen place the maintenance responsibility on the association. Why? Because if someone were injured or the property were damaged as a result of a problem coming from a limited common element, the association would be sued (as well as the unit owner who owned the limited common element), and could be found liable and required to pay a lot of money. Additionally, the unit owner may decide not to do the repairs, and further damage would result.
Access to the roof should not be a problem. If the unit owner refuses to allow a contractor access through his unit so as to get to the roof, the board can file suit asking a judge to force the owner to provide access. Indeed, I suspect there is language to that effect in your legal documents.
The real question is "Who pays for the repair?" Again, your bylaws may be helpful. Some require that the limited common element unit owner reimburse the association for any such repair costs. Unfortunately, many legal documents are silent on this issue.
And while it is clearly unfair for owners who do not have access to the roof deck to have to pay for any maintenance and repair costs, since it is a common element, all owners may have to share in these expenses.
Your state may have some court decisions on this issue, so talk with the association’s attorney for specifics.
Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to benny@sandbox.inman.com.
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