On or after January 1, 2014, all single-family residential properties undergoing alterations or improvements will have to replace all noncompliant fixtures before certificate of final completion can be issued by the local building department.

On or after January 1, 2014 specific building alterations or improvements to multifamily and commercial properties must replace noncompliant plumbing fixtures as a condition for issuance of a certificate of completion and occupancy by the local building department.

On or after January 1, 2017 a seller of a single-family home must disclose in writing to a potential buyer the new requirements for plumbing retrofits and whether the property includes non-compliant plumbing.

On or after January 1,2019 a seller of multifamily or commercial property must disclose in writing the plumbing retrofit requirements and if any noncompliant fixtures exist in the property to be sold.

By January 1, 2019 all non-compliant plumbing fixtures in multifamily or commercial properties must be replaced with water-saving plumbing fixtures.

The law does not appear to mandate point-of-sale retrofits for single-family homes. However taking out a building permit before, during or after the home purchase could trigger the reqirement that plumbing fixtures be replaced. Home buyers will want to famailiarize themselves with the requirements in order to avoid expensive retrofit costs after purcahsing a pre-1994 built home.

BRAD GARBUTT

RELTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE

BRADGREPS@YAHOO.COM

530-224-6767 OR 530-941-7492

Municipalities across the state adopted codes for second units. However, some planning agencies made these rules so restrictive building a second unit is nearly impossible. Redding initially adopted stringent rules but recently amended the zoning ordinance to make them more workable in the real world. Here are some of the changes:

• Note the purpose of the changes is to recognize second units are more affordable and energy efficient
• Second dwelling is not required to meet the density requirements of the General Plan or Zoning Ordinance
• Lot size can be as small as 6000 square feet as long as the lot is at least 60′ wide
• Allows second units to be up to 800 square feet as long as it is 30% smaller than the main residence
• Second units can be attached or detached
• Requires one off street parking space per bedroom of the second dwelling
• Allows the second unit to be larger than the main house if the second unit is intended to be the primary residence
• Rules can be further relaxed if the second unit will house a disabled person

The amendments can be found in Chapters 18.43 and 18.15 of the city of Redding Zoning Ordinance.

Now, the Shasta Association of Realtors will ask Anderson, Shasta Lake City and Shasta County to follow Redding’s lead by adopting reasonable second unit rules. Realtors believe construction of second units should be encouraged in response to public demands for more affordable housing alternatives.

Redding already attracts many retirees from elsewhere due to its low crime, recreational opportunities and affordable real estate. Allowing them to build a second residence for a caregiver or family member without lots of  “red tape” will encourage them to move here or stay here when their needs change. Hopefully, the word will get out and more property owners will take advantage of these new and improved rules for granny flats!

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE

The government aid program is designed to pay down loan balances and provide cash assistance to struggling homeowners in California. Here are some program details:

• Program targets 100,000 low-to moderate-income homeowners
• Borrowers must have endured some sort of financial hardship resulting in a loss of income
• $875 million will be directed to unemployed homeowners who need help making their mortgage payments
• $790 million will be used to reduce mortgage loan balances

The delay was caused in part by Fannie Mae and Freddie Mac instructing their loan servicers to get on-board with the program. This greatly increases the number of eligible homeowners.

In the meantime, homeowners having financial difficulties are encouraged to contact their lender immediately instead of waiting several weeks for the program to launch. For more detailed information on the program, follow this link: www.keepyourhomecalifornia.org

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

MORE THAN 25 YEARS LOCAL SALES EXPERIENCE

• Short Sale Deficiencies- A seller’s first trust deed lender cannot seek a deficiency judgement against the borrower after a short sale. Fraud or waste committed by the borrower could still allow the lender to seek compensation for damages according to SB 931.
• Energy Audits: Clients may request an audit of a home for energy efficiency by a home inspector according to the standards of the Home Energy Rating System (HERS)  as per AB 1809. Realtors will be encouraged to provide home buyers the newly released HERS booklet as a way to inform buyers of the new state program.
• Adverse Possession: One requirement for a claim of adverse possession is proof that taxes have been paid on the property for a period of five years. AB 1684  strengthens the requirement that proof of timely tax payments be certified for all state, county or municipal taxes.
• MLO license requirements- Mortgage Loan Originators (MLO’s) that operate without an MLO endorsement can be guilty of a crime punishable by six months in jail plus a $20,000 fine. SB 1137 extends to any real estate licensee employed or compensated by a broker for MLO activities.
• Tenants in Foreclosed Homes- Tenants that remain in a property that has been foreclosed upon must be provided a notice of their statutory rights for a period of one year after the foreclosure. The tenant’s rights must be explained on a separate cover sheet or incorporated into the notice for 90-day terminations. SB 1149 also prohibits a landlord from damaging a tenant’s credit rating with an unlawful detainer action unless the landlord prevails in court.
• Domestic Violence Protection for Tenants- SB 782 precludes a landlord from terminating or failing to renew a lease for a tenant or members of the tenant’s family victimized by domestic violence.  These protections are forfeited if the victim subsequently allows the perpetrator to visit the property. Landlords would also be required to re-key the property at the tenants request within 24 hours after being provided written proof from the court or law enforcement that a protection order is in effect.
• Real Estate Fraud Protections: AB 1800 addresses three new fraud activities that have cropped up since the housing bubble burst. 1) Foreclosure consultants offering “forensic loan audits” will now be covered by the foreclosure consultant law which, among other things, prohibits advance fees for promised services. 2) Any mail solicitation that offers to provide a copy of an owner’s grant deed or other title records must include a prominent statement that the homeowner can obtain the records directly from the county recorder and the service is not associated with any government agency.  3) Penalties and punishments have been increased to one year imprisonment and a $2,500 fine for renting out a residence without the owners permission.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN REDDING

MORE THAN 25 YEARS LOCAL SALES EXPERIENCE

Anti-deficiency laws were passed in the 1930’s during the Great Depression. The law limited the borrowers liability to the property value itself, not the borrowers personal assets. If the bank forecloses, resells the property and ends up taking a loss, the bank cannot then go after the borrower for any deficiency.

Unfortunately, the 1930’s era law did not anticipate thousands of borrowers refinancing their loans to secure a lower interest rate. Few borrowers realized doing so would make them personally liable for the entire amount of the new mortgage. And banks didn’t go out of their way to tell them. SB 1178 would have extended those anti-deficiency protections to those that refinanced their loans.

The law would not reward those that refinanced to pay bills or buy boats, cars or motor homes. In the event the refinance allowed the owner to extract cash equity, the homeowner would have to prove they put the extra money back into the property for remodeling, upgrades, swimming pool or adding on to the home.

Realtors feel Arnie misinterpreted the intent of the bill. In essence, the governor believed the bill would reward  borrowers for bad decisons by interfering with an existing contract.  Realtors were trying to close a loophole that allows lenders to also look to the borrower, not the property exclusively, for security for the loan granted.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN REDDING

MORE THAN 25 YEARS LOCAL SALES EXPERIENCE

Senate Bill 1178, authored by Senator Ellen Corbett, does not protect borrowers that used cash-out refinances or equity lines to pay bills or buy cars, boats, RV’s or stock investments. Only borrowers that used cash generated from a refinance to improve their primary home would be protected by this bill if it passes. Most borrowers were unaware that a refinance caused a forfeiture of this liability protection. In legal terminology, purchase loans are non-recourse loans while refinanced loans are recourse loans.

Banks doing business in California understand that the property is the security for the loan, not the borrower. Purchasers that later refinanced had no idea they were losing this protection exposing themselves to personal liability and even new tax liability. Lenders can pursue the loss for up to ten years after a foreclosure or short sale. They can sell the accounts to aggressive collection agencies or bundle them as securities. This allows banks, which created this mess to begin with, to add insult to injury by chasing  families that have already lost their home for money they don’t have.

Call your local State Senator and ask him or her to vote yes on SB 1178. In our area, call Senator Sam Aanestad at 530-225-3142.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN REDDING

MORE THAN 25 YEARS LOCAL SALES EXPERIENCE

Now the IRS has set rules for those that buy a vacation home using a 1031 exchange. The owner must use the home no more than two weeks a year and must rent the home out for at least two weeks a year for at least two years after purchase. After two years, the owner can convert the home to his or her second or primary residence while still avoiding the capital gains tax consequences provided by the exchange law. The owner must charge fair market rent, have a written lease for the rental period and it must be an arm’s length transaction- no renting to a family member.

Visiting the home to perform maintenance does not count toward the owner’s two-week time limit. The benefit here is someone with investment property such as income units, commercial buildings or land that has substantially increased in value can exchange it for a home they eventually want as a primary or secondary residence. Until now, selling one to buy the other would trigger a capital gains tax event or prevent the owner from using the home for personal use.

For specifics on this safe harbor provision in the tax code, contact Russell Marsan of IPX Exchanges at 800-406-1031. He can give you particulars on the tax law and assist as an exchange facilitator. I can assist you with the sale or purchase of the investment or vacation property.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN REDDING

MORE THAN 25 YEARS LOCAL REAL ESTATE SALES EXPERIENCE

The first change is there is no estate tax for those that die this year. However, there is also no stepped-up tax basis for real property transferred from one’s estate to their heirs. Confused? Perhaps an example will help:

Uncle Buck bought an investment property for $100,000 years ago but today he died and the current market value is $1,000,000. His heirs immediately sell the investment and pocket $1,000,000 (for the sake of this example there were no sale costs deducted from the gross sales price). No estate tax is due but the heirs will pay capital gains tax on the gain of $900,000 (The sales price minus the base purchase price of $100,000).  If Uncle Buck had died in 2009, the basis value of the investment would have been “stepped-up” to current market value ($1,000,000). If the heirs sold the property today for $1,000,000, no estate tax or capital gains tax would be due.

Next year, the rule that allows a step-up in basis will once again apply and estate tax will only be due if the estate exceeds several million (the exact number has yet to be determined). Last year, the first $3.5 million was exempt from estate tax for a single person and $7 million for married couples.  It’s expected the 2011 exemption limits will be similar to those that sunset-ed last year.

The bottom line is keep grandpa and grandma alive until next year when this lapse in favorable tax treatment is restored. This may not be something you can control, but seeking tax advice may be beneficial if you expect a big inheritance due to the untimely death of a wealthy friend or family member who has you in their will.

A tax deferred 1031 exchange may allow you to postpone or eliminate tax liability if you follow the law. Russell Marsan, certified exchange specialist for IPX, can answer any questions regarding these tax law changes at 800-406-1031.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN REDDING

MORE THAN 25 YEARS LOCAL SALES EXPERIENCE

A new program to be launched April 5 will attempt to help homeowners unload their homes using the short sale process. The program aims to streamline and standardize the process by establishing some ground rules for determining who gets how much. The benefits this program is intended to create include:

• More net proceeds to the investor doing a short sale than a foreclosure
• Set amount of cash for the loan servicer ($1,000)
• A predetermined amount for second lienholders, if any ($1,000)
• Less damage to the home owner’s credit rating
• Relocation money for the homeowner ($1,500)
• Assurance from lender the homeowner will not be sued for any dollar deficiency
• Fewer empty homes waiting to be foreclosed upon

Real estate agents would be used to establish the home’s current fair market value.  This value estimate would not be shared with the homeowner but if an offer meets or exceeds the indicated value, the lender must accept the offer.  Lenders want proof the homeowner has done everything possible to keep the home including trying to sell the home or utilized available savings to make payments. 

Those of us that have handled short sales know how frustrating the process can be for homeowners, title companies, lenders and loan servicing companies. Some are easy to work with while others have made the process very difficult and time consuming. It’s not unusal to have the first couple of buyers fall by the wayside before the investor wakes up and agrees to a short sale. Any help by the federal government to regulate the process is welcomed by real estate professionals.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN REDDING

MORE THAN 25 YEARS LOCAL REAL ESTATE SALES EXPERIENCE

FHA sees this new program as a win-win for borrowers who get to keep their home and FHA protects their insurance fund from unnecessary losses. Here are some additional details:

• A borrower considered “facing imminent default” is one that is current on payments or less than 30 days late but has experienced a significant reduction in income or some other hardship that will prevent making future payments in a timely fashion
• Allows for a forbearance agreement to be created that allows the loan servicer to postpone, reduce or suspend payments due on a loan for a specific amount of time
• Allows qualified borrowers to reduce their payments permanently through an interest rate reduction or loan reamortization to an affordable level by using a portion of their insurance with a loan modification. Principal deferred becomes an interest free subordinate loan which is repaid once the first loan is paid off

The hardship must be documented by the borrower to the loan servicers satisfaction. The cause of hardship may include one or more of the following:

• Unemployment, reduced job hours, reduced pay, or a decline in business for self-employed would all be considered as reasons for loan modification. A scheduled temporary shutdown of the employer would not be reason enough to qualify for a loan modification
• Death in the family, permanent or short term disability or serious illness qualify as hardships

The loan servicer makes the final decision. If you know someone struggling to make house payments, ask them if they have an FHA loan. If so, direct them to HUD’s website or contact me for further information.

bradgreps@yahoo.com

530-224-6767 or 530-941-7492

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN REDDING

MORE THAN A QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE