TheREALTYgram Blogger

A Good Home Warranty Plan OffersRisk Reduction For Home Sellers And Agents

Some 60 percent of litigation following residential home sales could be avoided if home sellers had purchased a home warranty plan, according to David Medley, National Account Manager for First American Home Buyers Protection Corp. Additionally, two out of three lawsuits involving real estate agents might also be prevented, since these claims involve failed mechanical systems, he added.

Home Warranty Factoids:

A home warranty company offers home warranty products to repair or replace appliances, electrical, plumbing, heating, and air conditioning systems on residential properties. If a home develops a mechanical problem during the first year of ownership, a home warranty will likely cover the cost of correcting covered problems, preventing lawsuits against the seller and/or agent.

Failure of mechanical systems must be the result of normal wear and tear, and not abuse or misuse.

Optional coverage may include pool equipment, water softening systems, and well mechanicals.

Who Is David Barry And Whom Is He Suing Today?

Antitrust attorney David Barry from San Francisco is cutting a legal swathe against REALTOR® groups from coast to coast. He remains unthwarted even though most of his attempts to date have been unsuccessful. Barry has challenged the National Assn. of REALTORS® on its REALTOR® trademark , and  filed antitrust lawsuits against REALTOR® associations in  Kentucky, Washington, Ohio, California,  and other areas. He is "an attorney notorious for suing organized real estate." said June Barlow, vice-president and legal counsel of the California Assn. of REALTORS® (CAR).

The latest targets in Barry's legal crosshairs are ten natural hazard disclosure companies in California. The following is from a  Realty Times report.

"The lawsuit calls for restitution paid to the buyers of natural hazard reports that allegedly falsely indicated that properties were not in high fire-hazard zones; an injunction to prohibit disclosure companies from selling natural hazard reports until there are systems in place to determine whether properties are in the high-hazard zones; and requirement that defendants advise buyers of non-complying natural hazard reports filed up to four years before the lawsuit.

"The lawsuit charges that the companies named in the lawsuit "have not, in the past four years, utilized the local (high fire hazard severity zone) data" that is intended to indicated areas with high fire hazards. "Instead, (the companies) rely on state maps superseded by local maps," the lawsuit states, and property disclosure reports may not indicate whether homes are actually located in these zones."

One of the companies named in the suit is Natural Hazard Disclosure, LLC, which is owned by CAR. Barlow said that she expects the complaint to be dismissed and calls it a "shakedown lawsuit" and  "frivolous."

The lawsuit references Southern California wildfires in 2003 that killed 23 people and questions whether people who suffered injuries or damages in those fires "received natural hazard reports containing false information regarding very high fire hazard severity zones."

HUD Homes Now Offered With Full Disclosure;Banks Are Encouraged To Follow Suit With REOs

The U.S. Dept of Housing and Urban Development has taken the high road with property disclosure reports. This is an interesting development and an excellent example of a consumer-friendly initiative. HUD homes are properties that are taken back by lenders in foreclosure proceedings. The mortgages are FHA loans, insured by the federal government. After foreclosure, the properties are turned over to HUD for disposition in the HUD Homes For Sale process. HUD has decided to offer a complete range of reports in connection with the sale of these properties. The following are examples of  reports available for a property that is presently on the market in Allentown, PA. There is a Lead Paint Report, an Environmental Compliance Report, and a Property Condition Report. Owner/occupant buyers also have an opportunity to complete home inspections and certify that all mechanical systems are in working order prior to settlement.

Some 30 states presently have laws on the books that exempt banks and financial institutions from seller disclosure laws (PA law at link). As the largest clearinghouse of foreclosed properties, HUD could choose to travel an easier route, skip the inspections, and offer the properties "as is" as most banks do with their Real Estate Owned (REO) properties. We think that banks should follow HUD's lead; state regulators should recognize the feasibility of inspections and eliminate the favorable treatment for banks with respect to seller disclosure laws.

Setting The Record Straight About Radon -- A Matter Of Grave Concern To 30,000 People Each Year

I posted an article about Montana radon mines three weeks ago. The article was a tongue-in-cheek description of abandoned mines that have been converted into "health spas"; visitors pay admission fees to sit and breathe radon filled air. It has been brought to my attention that some readers of that article may consider that it is an endorsement about purported health benefits of radon gas. Nothing could be further from the truth. Radon is the second leading cause of lung cancer in the United States. So says the U.S. Surgeon General, the EPA, the American Cancer Society, and esteemed scientists worldwide. What is radon and how does it cause cancer? "Radon is a radioactive gas released from the normal decay of uranium in rocks and soil. It is an invisible, odorless, tasteless gas that seeps up through the ground...Radon decays quickly, giving off tiny radioactive particles. When inhaled, these radioactive particles can damage the cells that line the lung. Long-term exposure to radon can lead to lung cancer, the only cancer proven to be associated with inhaling radon,." according to NCI.

Some years ago when residential radon came on the health radar screens, federal guidelines were developed that recommended residential remediation at levels that were substantially lower than levels that prevailed in Canada and Europe. Critics cried  "foul" and accused the government of pandering to radon remediation companies who were likely to reap more dollars from more stringent guidelines. Time, however, has proven the critics wrong on all counts. Recent studies published in The American Journal of Epidemiology point to higher incidents of lung cancer occurring even in households where the radon levels are at the low end of that scale.

A British report goes even further with the potential for radon risk: "... calculations suggest that the dose to the basal layers of the skin may also be high, with a consequent possible risk of skin cancer. Unless countermeasures are taken, a smaller number of people may also run a significant risk of stomach cancer from radon ingested in drinking water." (UK National Radiological Protection Board, published in Journal of Radiological Protection 2002). Other studies conducted worldwide concur and document similar risks.

We urge you to have your homes tested for radon. We also urge you to stop smoking.  The best way to beat lung cancer is prevention. Don't let it happen to you or your family. Take action now.

Know What You're Getting Into:Have A Home Inspection

(I've been told that my blog is much too formal and newsy. Critics advise me to share some personal, casual notes. I will comply herewith 8-) My son and his fiancée decided to buy a home in State College this week. They are first-time home buyers and we are very excited! Naturally, when Mom has 21 years of experience in the real estate business, advise and counsel is bountiful, whether they like it or not! (Happily, they are appreciative of Mom's input.) My most important advice was: "Have a comprehensive home inspection". The inspections are ordered for this weekend, a complete course including termite, radon, dye test, and all the rest. Buyers can enjoy greater peace of mind by knowing what issues they may be facing in the near and long term. Maintenance concerns and projected schedules for updates and repairs can also be calculated with a good, qualified inspection. We're not expecting any major problems to surface this weekend. I'll keep you posted.