Disclosure Alert

This disclosure alert is to inform California real estate Brokers and Agents that:

(1) Effective January 1, 2008, a new California law (Civil Code Section 1102.6e) specifically requires the Seller to notify the Buyer of any "Private Transfer Fee" that may apply to the sale property and…

(2) This requirement will affect less than 10% of the properties sold in California, and those would only be homes in some of the subdivisions built within about the last 10 years and…

(3) The new requirement DOES NOT apply to the government "Documentary Transfer Tax" which is routinely included on the HUD-1 Settlement Statement and…

(4) We’ve got you covered — with our new "California Property Tax Disclosure Report(TM)" — at the same price!

ABOUT THE NEW LAW:

The Seller’s duty is to disclose all facts material to the transaction. The Buyer’s responsibility is to read the disclosures, along with the preliminary (title) report and applicable contracts. Nothing has changed there.

The new law shines a spotlight on a hidden cost that, often, Sellers overlook and Buyers don’t know to ask about. It’s known commonly as the "private transfer tax" (named in the law as a "Private Transfer FEE")
that a few homebuilders and community developers sometimes impose on owners within a development. The problem is that a Buyer in one of these developments can get the surprise bill months after moving in.

To avoid this surprise and comply with the law, a residential Seller must provide the Buyer with six essential elements of information about any Private Transfer Fee that affects the property. Details include the amount of the fee required for the listing price, how the fee is calculated, who ultimately receives the fee, and how the fee will be used. The California Association of Realtors(r) has designed Form NTF (11/07), "Notice of Transfer Fee," which guides the Seller in providing the Buyer with that required information. See the sample Form NTF at CAR’s link below:
http://www.car.org/library/media/papers/pdf/NTF(11_07)sample.pdf

These statutory disclosure details are often spelled out in documents recorded against the property, sometimes in CC&R’s, but often in other notices recorded under various and unpredictable names. A few examples are: "Lifestyle Fee Agreement", "First Amended Settlement Agreement & Mutual Release of Claims", "Community Benefit Fee Agreement", "Declaration Imposing Conveyance Fee and Lien", "Declaration of CC&R’s Regarding Transfer Fee", "Charitable Housing Grant", etc.

Therefore, the only failsafe way to identify them is to read all "exceptions" on the preliminary (title) report for the specific property. We don’t pretend that we can do that for you, HOWEVER…WE’VE GOT YOU COVERED!
 
Beginning in December 2007, prior to the law’s effective date, our new "California Property Tax Disclosure Report(TM)" includes a new "TRANSFER FEE/TAX ADVISORY". This advisory clearly establishes the distinction between the government "Documentary Transfer Tax" and the "Private Transfer Fee", explains to your client the law and the disclosure essentials, and guides them, "How to Determine the Existence of a Transfer Fee." Its message is clear that the only way to ensure the disclosure is made is to, "OBTAIN COPIES OF ALL OF THE EXCEPTIONS LISTED ON THE PRELIMINARY (TITLE) REPORT FROM THE TITLE COMPANY AND *READ THEM* TO DETERMINE IF ANY TRANSFER FEES ARE APPLICABLE."  ….AND THE PRICE OF OUR NEW TAX REPORT?  STILL THE SAME!
 
The new and improved California Property Tax Disclosure Report is included in the "Industry Standard Package" (with the NHD, EnviroCheck and Clue Report) for just $99.95. The "Comprehensive Report" (with the NHD) for $79.95.  This applies to both the JCP-LGS and the First American Natural Hazard brand disclosure packages as well.

If you haven’t ordered a report from us recently, please give us a try. Still the best in the business after 30 years!

Please feel free to contact me should you have any further questions.  We look forward to supporting your success in 2008.
 

Marcie Orme
Account Executive
JCP/LGS Disclosures
321 Warren Ave
Fremont, CA 94539 W: 916-838-5743

http://www.disclosures.com/