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.
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