California Homeowner Bill of Rights Signed Into Law

!NEWSFLASH!

On July 11, 2012, Governor Brown signed the Homeowner Bill of Rights. This important bill extends reforms to help homeowners who are having trouble with their residential mortgage. The most significant aspects of the bill follow:

1. The bill prevents lenders from “dual-tracking” borrowers. This means that when a homeowner is negotiating new terms for a modification with a residential loan borrower, the lender is prohibited from pursuing a foreclosure simultaneously.

2. The bill imposes civil penalties of up to $7,500 for auto-signing foreclosure documents (this process is frequently referred to as “robo-signing”, meaning that lenders file testimony about their possession of original documents and their review of business records without checking the accuracy of their statements).

3. The bill also requires lenders and loan servicers to establish a simple point of contact for borrowers. If you contact the lender, you will be able to reach someone with knowledge of your residential loan who has direct access to a decision maker. This means no more runaround from the lender when you call to check on the status of your modification request.

This Bill is going to protect many Californian residents who are in default, as well as many more who are or will be in the modification process.

If you have questions about how this bill will impact you, or questions about real estate or mortgage law issues, you are welcome to contact The Mlnarik Law Group, Inc. at (408) 919-0088 or john@mlnariklaw.com

-The Mlnarik Law Group, Inc., Real Estate Litigation Attorneys

I’m buying a house – should I hire a real estate attorney?

A real estate attorney is your advocate when it comes to purchasing a home

For most people, their house is their biggest investment. It makes sense to hire a real estate attorney to ensure that you understand all aspects of your transaction with the seller and any regulations related to the purchase.

Homeowner Associations (HOAs)

Review of your covenants, conditions and restrictions (CC&Rs) by an attorney can alert you to items you might be unfamiliar with. More important, it can keep you from buying a property that is already violating a CC&R — thus avoiding liability toward the association or a neighbor later on. There may be restrictions (for example on flooring types, or pets, or turning your property into a rental unit) that you will wish you had known about!

Short Sales & Foreclosures

If you’re selling or buying a property as part of a short sale or foreclosure, additional assistance from an attorney may be beneficial in guiding you through the process. If you’re buying a property that was foreclosed on by the lender, you may need assistance with an unlawful detainer (eviction) action.

Litigation

Sometimes, real estate transactions just don’t work out. For instance, there may be title disputes, or a failure to disclose property defects, or problems with the transaction itself. You will need a real estate attorney to alert you to your rights, and help you enforce them.

Transaction Review

Sometimes you need a real estate attorney to assist with reviewing or drafting contracts. These can range from lease-to-own option agreements, rental documents, to documents memorializing agreements regarding property ownership to documents prepared by another party.

As always, if you have any questions regarding real estate law, please don’t hesitate to contact us.

The Mlnarik Law Group, Inc. at (408) 919-0088 or john@mlnariklaw.com

-The Mlnarik Law Group, Inc., Real Estate Litigation Attorneys

 

Can my HOA come after me personally for dues, even after I go through a foreclosure?

If you were a condo owner in a community governed by a homeowners association (HOA) and your condo was sold at a foreclosure auction, you might think you’re off the hook for any delinquent payments to your HOA. You’re not! You will be liable for any dues while you are on title.

Today, as the market value for many properties has fallen, there isn’t enough money “left over” to pay your HOA. Most associations have governing documents that allow them to collect from a property owner personally, after the home has been lost to a foreclosure.

Bottom line – don’t just ignore your association fees because you’re in active foreclosure. You could pay for it later.

The Mlnarik Law Group, Inc. at (408) 919-0088 or john@mlnariklaw.com

-The Mlnarik Law Group, Inc., Real Estate Litigation Attorneys

 

 

How to Reject a Potential Tenant (Without Getting Sued)

No one likes to say “no”, especially a landlord who is turning away a prospective renter in a tough market.  But the pain of choosing the wrong tenant will outweigh the costs of a vacancy.  Sometimes landlords have to be tough.

The trouble with rejecting a tenant, though, is the likelihood they will take their hurt feelings to their lawyer’s office or the housing authority.  Before the landlord realizes it, the next “prospect” who tours the rental is actually a “tester” conducting an investigation of their tenant screening practices. Fines and damages for lawsuits or housing disputes can range from the thousands to the hundreds of thousands, and even into the millions for widespread violations in large rental property businesses.

Here’s how to reject or deny an applicant without opening yourself up to legal liability

1. Honesty is the Best Policy

Often we want to say “No, no, it’s not you, it’s me.”  Get in the habit of saying “Well, actually it is you.”  Don’t try to sugar-coat a rejection, or you’ll talk yourself right into a legal tangle.  Tell the applicant the reason for the rejection.  This will offer them closure without the need for further legal action.

2 .Credit Reports

If the rejection is based on something in the tenant’s credit report, you have a legal duty to tell them so.  In addition, you must tell them which credit reporting agency gave you the information in the event they want to dispute the credit report.  Landlords can reject someone outright for credit problems.  You should, however, be prepared to justify how you made the decision. You must enforce the same credit threshold with every applicant.

3. Tenant Screening Questions

Discrimination occurs when a landlord refuses to rent to someone because of the impression they form about the person’s class, including race, color, religion, national origin, marital or familial status, gender, advanced age or disability.

The best way to avoid a discrimination claim is to avoid questions about the person’s class and focus on their behavior.  It is also advisable not to predetermine the “type” of tenant who they think would “fit in” to the property.

There are countless ways to run afoul of this rule, for instance, touting the proximity of your rental to a religious institution, describing the ethnicity of the neighborhood, or suggesting who might like the neighborhood.  Stating that a property is a good match for a young family or a single person are more examples of how a statement may be interpreted as discriminatory.

Do not reject a tenant because they are a member of a protected class.  Rejecting a prospective tenant because they are dressed in a certain way may also be considered discriminatory if you use pejorative words to describe it, for example, stating someone is dressed like a “gangbanger” can imply racial stereotyping and discrimination.  On the other hand, a landlord is not required to rent to the person because of their class status.  If there is a bona fide reason to reject them, like a poor credit report or a dubious reference from the previous landlord relating specifically to the payment of rent or behavior of that particular individual, you do have the right to reject them.

When making a determination about an applicant from a previous landlord or personal reference, be sure to stick to the same rules and only act on information that specifically relates to the person’s behavior, e.g. chronically late rent payments or disruptive behavior, and not concerns generated from that reference’s own personal biases.

4. Criminal Background Checks

Reject tenants with criminal history that could spell bad behavior as a renter – check fraud, disorderly conduct, for instance, and any violent or aggressive behavior that could place other tenants or neighbors at risk.  Some landlords are willing to let minor offenses slide, like parking tickets or traffic infractions. Wherever you decide to draw the line, apply it evenly to all applicants.

5. Eviction Reports

Tenants with a history of eviction can be rejected.  The cost of an eviction is significant, not just in legal fees, but in time lost without payment of rent.  A contested eviction can take months to resolve.  Once an eviction proceeding is filed, the tenant may be more likely to damage the rental property, and those costs can be enormous.

6. Rental Application 

Landlords can reject an applicant who did not complete the entire rental application.  Make certain that the applicant has signed the authorization for a tenant background check, including a credit report, and permission to contact the references listed.  Keep documentation of your contacts with the applicant to prove you did not violate the law when you rejected the applicant.  Most importantly, apply whatever criteria you use to reject or accept a prospective tenant evenly and objectively to all tenants.

Familiarize yourself with the Fair Housing/Equal Opportunity Laws to avoid litigation.

Are there any more points that I may have missed that you can share?

The Mlnarik Law Group, Inc. at (408) 919-0088 or john@mlnariklaw.com

-The Mlnarik Law Group, Inc., Civil Litigation Attorneys

 

 

S. Bay Neighborhood Law Firm Making Contacts at the S3 Tri-Chamber Mixer

Continuing its outreach to the Bay Area business community, the Mlnarik Law Group, LLC will be one of only eight Santa Clara exhibitors at this year’s S-3 Tri-Chamber Mixer & Mini Expo.  Held from 5:30 to 7:30pm, January 19, 2012, at the Doubletree by Hilton San Jose, the Mixer/Mini Expo is the joint effort of the San Jose Silicon Valley, Santa Clara and Sunnyvale Chambers of Commerce.

Hundreds of Chamber members will be on hand to make new business connections and strengthen old ties, and the Mlnarik Law Group will be prominently featured in their midst.  At last year’s event our fellow exhibitors included everything from a graphic design firm to a “troubleshooting” business consultant to a candy company run by local entrepreneurs.  The Mlnarik Law Group was on hand offering its legal expertise in all matters of corporate governance, including business formation, development, and maintenance.  How to decide between being an LLC, S-Corp, LLP, GP, or Sole Proprietorship?  What should you (or shouldn’t you) include in the employee handbook?  When is it necessary to use NDAs or “non-competes”?  What will be your web agreements and privacy policies?  Our attorneys cover all that and much more, and the Chambers of three Bay Area cities are getting to know us better with each new year.

However, the Mlnarik Law Group, LLC is much more than a business boutique.  As “A neighborhood law firm committed to your success”TM our work reaches into the areas of real estate, estate planning, family law, employment law, bankruptcy and fair treatment of debtors, not to mention general litigation on a case-by-case basis.  But why read about it here?  Come on down to the Tri-Chamber Mixer and Mini Expo and we’ll tell you all about it!

Jim Erickson, Associate

Preparing to Buy a New Home in the New Year with your Significant Other?

Couples first homeIf you’re considering buying a place with your boyfriend, girlfriend or significant other, you can take advantage of the great real estate deals that are currently out there. Whether it be a short sale or foreclosed property, you both may fall in love with a great house, but as sometimes happens, fall out of love with your partner. We can get caught up with the joy and spirit of the Christmas holiday season and many couples don’t think ahead of this unfortunate outcome. Many are forced to sort out what they’re going to do with their house down the line. If you’re married, there are plenty of California laws out there that will help protect you. If you’re not, you won’t be so lucky.

In the event you’re ready to take the plunge, consider an agreement to document who is responsible for what and what you’ll do with the house if you part ways. Important things to consider are who will pay for things like the mortgage, property taxes, insurance and maintenance? More importantly, you should consider how you can realistically afford to sell or maintain the property in the event you do split up. Allowing for concrete time frames to secure new financing and allocating responsibility for who will take care of the payments when the house is still in both your names are the big issues.

If you’re looking planning to make a big purchase like this with that special someone over the Christmas holiday season or the upcoming new year, consider drafting an agreement to protect yourselves now and down the line.

The Mlnarik Law Group, Inc. at (408) 919-0088 or john@mlnariklaw.com

-The Mlnarik Law Group, Inc., Civil Litigation Attorneys