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					LEASE/PURCHASES AND
            RENTALS
     What Realtors® Need To Know
PRESENTERS

  Steve Byrd, Carolina Multiple Listing Services, Inc. (CMLS)


      H. Frazier Wallace II, Esq., Doyle & Wallace, PLLC


        Stephanie Gossett, Lake Norman Realty, Inc.


 Dana Rhodes, DREI, instructor, Mingle School of Real Estate


                     Debbie Wey, CMLS
LEASE/PURCHASES AND
   RENTALS STATISTICS

  Presented by: Steve Byrd
STATISTICS: LEASE/PURCHASE LISTINGS
STATISTICS: RENTALS
LEASE AND AGREEMENT TO PURCHASE,
             AKA LEASE/PURCHASE


       Presented by: H. Frazier Wallace
LEASE AND AGREEMENT TO PURCHASE,
AKA LEASE/PURCHASE


Difference between a Lease/Purchase and:
      a lease agreement with an option to purchase
      traditional mortgage
      seller financing
      buyer possession before closing agreement
   When should I call a lawyer?

   When should the buyer do inspections?

   What needs to be in the agreement?
LEASE/PURCHASE-TERMS OF THE AGREEMENT

  Purchase
  The tenant is obligated to purchase the
  property at the end of the term based on
  the terms of the Offer to Purchase and
  Agreement that is entered into
  contemporaneously with the Lease/Purchase,
  and attached as Exhibit A and incorporated
  into the Lease/Purchase.
LEASE/PURCHASE-TERMS OF THE AGREEMENT

  Term
  This paragraph lays out the term of the
  Lease/Purchase, when the first monthly rental
  payment is due, and the amount of the first
  payment if it has been prorated.
LEASE/PURCHASE-TERMS OF THE AGREEMENT

  Non-Refundable Fee
  How much needs to be paid to the seller
  for taking the property off the market for
  the length of the term? This payment is
  non-refundable, and if agreed to, can be
  credited at closing.
LEASE/PURCHASE-TERMS OF THE AGREEMENT
  Rent
  How much is the rent per month, and
  what, if any, of that monthly rent shall
  be credited against the purchase
  price at closing?
   Commissions
   How do I as the agent get paid for
   bringing this deal together?
LEASE/PURCHASE-TERMS OF THE AGREEMENT

  Obligations during the term of the lease
  for
       Tenant
       Landlord

  Default
       If the tenant does not perform under the
        terms of the lease?
       If the landlord does not perform under the
        terms of the lease?
   Personal property of landlord left in/on
    the property during the term of the lease
   Eminent Domain and Casualties: What
    happens if the house is struck by lightning
    and burns to the ground?
   Landlord’s insurance requirements
   Tenant’s insurance requirements
   Landlord bankruptcy: What happens if
    the landlord files for bankruptcy?
   What happens if the landlord is
    foreclosed upon?
LEASE/PURCHASES AND RENTALS

     Presented by: Stephanie Gossett
         N.C. LICENSE LAW
       COMMISSION RULES

Presented by: Dana Rhodes, DREI
ARTICLE 1   93A-2 (A)

  o Compensation

  o Real estate brokerage
  o For others
REAL ESTATE BROKERAGE

  o Lists   or offers to list

  o Sells   or offers to sell

  o Buys    or offers to buy

  o Auctions    or offers to auction
REAL ESTATE BROKERAGE, CONT’D

  o Leases    or offers to lease

  o Sells   or offers to sell leases

  o Rents   or offers to rent
COMMISSION RULE A.0104 (A)

  o Every   agreement

  o Brokerage    services

  o Shall   be in writing

  o Signed    by parties
COMMISSION RULE A.0104 (A) CONT’D

  o Every   agreement

  o Brokerage   services

  o Between   broker and owner

  o Writing   from time of formation
COMMISSION RULE A.0104 (B)

  Fair housing language must be
  included.
COMMISSION RULE A.0104 (C)

 o Brochure

 o Sales   transactions
ESSENTIAL ELEMENTS
IN AGREEMENT WITH OWNER

  o Partiesidentified
  o Consideration spelled out

  o Legally competent parties

  o Performance of legal acts

  o Be specific
ESSENTIAL ELEMENTS
OF A RENTAL AGREEMENT

  o Parties   identified

  o Land    must be identified

  o All   material terms set forth
PROPERTY OWNERSHIP

  o Rent   – intangible right

  o Appurtenant    to land

  o Needs    to be addressed
COMMISSION RULE A.0107 (A)

  o Tenantsecurity deposits
  o Deposited in trust or escrow
    account
  o PB must deliver immediately to
    BIC
NORTH CAROLINA REAL ESTATE LAW

  o Chapter    42, Article 6

  o “Tenant    Security Deposit Act”

  o Outlines   three major areas of
   security deposits
TENANT SECURITY DEPOSIT ACT
HOW MUCH AND KEPT WHERE

  o Security deposit based on
    term of lease
  o Rental income and tenant
    security deposits
  o Trust account
TENANT SECURITY DEPOSIT ACT
PERMITTED USES

  o Outlined   in Article 6

  o Tenant’s   money – not owner’s
TENANT SECURITY DEPOSIT ACT
ACCOUNTING TO TENANT

 o Trustaccount location
 o Notify tenant

 o Accounting letter 30 days/60 days

 o Abandoned property/deposits
CODE OF ETHICS – ARTICLE 11

  o   Standards of practice

  o   Competence
N.C. REAL ESTATE LAW
  o Residential    Rental Agreements Act
    o Act   prohibiting retaliatory eviction
  o Tenant    Security Deposit Act
    o Act   prohibiting self-help eviction
  o Unfair and Deceptive Trade
    Practices Act
N.C. REAL ESTATE LAW, CONT’D

  o Pet fee
  o Eviction procedure

  o Tenant’s personal property

  o Service Members Civil Relief Act

  o Rental insurance
N.C. REAL ESTATE LAW, CONT’D

   o Remedies   for returned check
   o Method of eviction for violation
     of lease
   o Sexual harassment

   o Forfeiture of real property

   o Contracts requiring writing
N.C. REAL ESTATE LAW, CONT’D

  o Damage     to property

  o Summary     Ejectment

  o Victims   of domestic violence,
   sexual assault or stalking
N.C. REAL ESTATE LAW, CONT’D

  o Mortgages   and deeds of trust
  o Escheats and abandoned
    property
  o Persons with disabilities

  o Damage to property
LEASE/PURCHASES & RENTALS

       Presented by: Debbie Wey
ADD/EDIT: LEASE/PURCHASE

                   Proposed Financing

o   Cash                          o   N.C. bond
o   Conventional                  o   Other
o   Federal Housing
    Administration (FHA)          o   Owner financing
o   Farmers Home Administration   o   Personal loan
    (FMHA)                        o   Trade/exchange
o   Lease purchase
o   Loan assumption               o   Veterans Administration (VA)
SEARCHING: LEASE/PURCHASE
STATUS: LEASE/PURCHASE

o   “Pending” (ignore the 60-day e-mail)
    o   Some agents include a statement in the “Remarks”
        explaining that the listing is a lease/purchase.
o   “Sold” when sale is final
o   TEMPO™ Advisory Group to consider a
    suggestion for a separate status for
    lease/purchase listings that are under contract
MLS RULES: RENTALS

o   Rental listings are optional
o   Written agency agreement required
o   A single-family or condo/townhouse property
    listed for sale or lease is permitted to have a
    second listing in the rental section of the MLS.
    o   “Agreement to Procure Tenant” (Use w/ NCAR
        standard form 101)
MLS RULES: RENTALS

o   Member Participants and Subscribers must disclose
    in the listing if they are the owners of or have an
    ownership interest in the property submitted to the
    service.

o   Subscribers must sign an agency agreement with
    the listing brokerage when listing their own
    property in the MLS.
MLS RULES: RENTALS
o   There is no standard NCAR form for listing a residential
    rental only to find a renter, without also acting as a
    property manager.

o   Proceed with caution
     o Ask an attorney to draft an agency agreement.
     o Commercial form 572 “Exclusive Right to Lease Listing
       Agreement” is not designed for residential listings.

o   Listings cannot be full service, i.e., “Full Service=No”
COOPERATIVE COMPENSATION

o   All listings must offer cooperative compensation.
    o   Percentage of gross sales price
    o   Set (or fixed) dollar amount
o   Cooperating brokerages have a right to know
    what their compensation shall be prior to their
    endeavor to sell/lease.
o   Cooperative compensation depends upon
    sale/lease.
COOPERATIVE COMPENSATION:
LEASE/PURCHASE
o   If not specified in the listing, any amount paid
    prior to the sale is a matter of mutual agreement.

o   Examples:
    o   ½ of first month’s rent
    o   ½ of cooperative compensation paid at inception of
        lease
    o   Remainder paid at closing
COOPERATIVE COMPENSATION: RENTALS

   o   Set (or fixed) dollar amount

   o   Percent of first month’s rent (common)

   o   Other

				
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