Construction

							Chapter 14

Specialty Residential Property
Chapter Outline

     Apartments
     Condominiums
     Cooperative
     Home Owner’s Associations
     Construction
     Mobile Homes
     Time-shares
            Chapter 14
At the conclusion of this chapter, you will be able to:
1) Understand the differences between an escrow for
      residential property and a specialized residential
      escrow
2) Give a definition for timeshare ownership
3) Outline a mobile home escrow
4) Differentiate between a condominium and a
      cooperative
5) Determine the distinguishing characteristics for
      new home construction
Apartment Escrow

   Usually handled through escrow:
     Rent Roll (for prorations)
     Security deposits (for transfer)

   Usually handled outside of escrow:
     RentalAgreement for each unit
     Estoppel Agreement signed by each tenant
        Lender and/or Buyer Requests
   Profit and Loss (3 years )
   Capital Improvements
   Personal property Inventory for:
      Bill of Sale
     Buyer’s Depreciation Schedule for tax purposes

   Existing Insurance policy coverage
   Health & Safety matters
         extinguisher vendor and permit date
     Fire
     Smoke detectors

   Existing vendors and contracts
   Tenant concessions, assigned parking
          Single Family Residence
                    vs.
           Non Owner Occupied

 Risk and Liability
 Liens and title problems
 Consumer protection
 Less disclosures
 Personal property / Bill of Sale
 Title rate negotiable
 1031 Exchange
             Tenant Issues
 Tenants Rights
 Residential Tenancies Act 1997 (RTA)
 Notice of Intent to Sell and Reasonable
  Access
 Non paying tenant (no action )
 Non paying tenant (unlawful detainer)
 Assignment of Rents / Security Deposits
 Eviction
 Vacating units
Setup Sheet
Setup 2
            COOPERATIVE
   Purchase contract between the principles
   Title search is ordered
   Request for demand is ordered
   Property inspection is requested
   Appraisal is performed
   Title insurance issues a leasehold policy
   Escrow prorates
     Property   taxes
     Homeowner association dues
     Loan payment insurance
     Utilities, as applicable
        At COE Buyer receives:
   Stock certificate
   History of the property
   Loan statement
   Reserve study]Financial statement
   Articles of Incorporation, CC&R’s
   Occupancy agreement
   Homeowner disclosure statement
   Termite report and clearance
   Management company information
   Recording fees, demand statement, lease
           Homeowner Association
   A non-profit corporation
     Articles
             of Incorporation
     Board of Directors
     Covenants, Conditions and Restrictions (CC&R’s)

   Mandatory membership
   Proportionate share of ownership based upon
     number  of units owned
     square footage of the property or similar

   Conventional Suburban Development (CSD)
   Neighborhood Association (NA)
   Responsible for common area and exterior
            Mobile Home Escrow
   In a mobile home park
     Common       area and amenities
     The    pad
          Cash or financed?
   New dealer
     Nothandled by DRE licensees
     Handled much like transfer of an automobile

   Placed on permanent foundation with land
     Handled  by DRE licensee
     Principals may handle between themselves
     Housing and Community
      Development (HCD)
 Escrow must order the park rental
  agreement and hold in the escrow file
 Escrow has no responsibility for contents
 Certificate of Registration
 Existing lender payoff
 Statement of Facts
 Mobile Home Residency Law
       Mobile Home Transfer
        Personal Property
 Notice of Opening Escrow
 DMV Certificate of Title
 Notice of Sale
 Tax Clearance Certificate
 Certification of Retail Value and Purchase
  Price
 Security Agreement
 Promissory Note
 Bill of Sale
      Mobile Home Transfer
         Real Property
 Certificate of Title and Registration
 Payoff existing lien holders
 Decal plates
 Certified copy of recorded HCD 433A
 Taxes
 Grant Deed
 Termite Report
 Statement of Facts
                    Time Shares
   Sales transaction information contract
   Title information
   Request loan, tax, association status
   Prepare recording document
   Collect funds
   Pay off existing loan and set up new loan
   Prorate income, expenses, taxes, dues, fees
   Obtain title insurance policy and request recording
   Notify time share management firm of transfer
   Disburse funds to appropriate parties
                   Think About It!
The buyer of a mobile home park wants to upgrade the park to increase
  the income above what the seller is receiving. The seller has a very
  casual management style in the handling of the park. The mobile home
  nearest the entrance is a dilapidated, very old trailer with who knows
  how many cats running around the unit. The owner claims to own no
  animals.
The buyer puts an amendment into the escrow that the run down unit
  must be removed prior to close of escrow. The seller claims that the
  resident pays all rent and fees on time, complies with the park rules
  and that the seller cannot terminate the lease for the unit due to the
  Mobile Home Residency Law.
Can the buyer or the seller give the tenant a Notice of Termination?
     Think About It! (Answer)
No.
However, if someone buys the unit, the owner
 can require that the unit be moved from the
 park because it is significantly run-down and
 the purpose is to upgrade the park.