Connecticut Legal Alert

Quick thought on low downpayment FHA mortgages

2010-03-04T05:35:00.000-05:00

Some of you may choose to work with a Realtor and/or Mortgage broker hoping to apply for a low downpayment, FHA backed loan. If your Realtor, mortgage broker, or attorney, is not familiar with the term 'amendatory clause' you should think twice about working with them. This is an important mandatory document in FHA deals that needs to be signed when you are going to contract on a home purchase.

Small Businesses can have a corporate counsel too....

2009-11-15T17:23:00.000-05:00

......or at least access to services often thought to be beyond the reach of 'mom & pop' operations. Among the issues that I get contacted on are:

setting up a new LLC, reviewing leases, negotiating asset purchases, reviewing contracts the business is asked to sign, designing contracts that meet a specific need, drafting confidentiality & non compete's, defense of discrimination claims, defense of unemployment claims, liability defense for the uninsured, employee handbooks, collection lawsuits, and a variety of general questions.

My most common request is merely answering a question for someone, often times where they would not normally pick up the phone and call an attorney. It may no longer be necessary to spend $200-400 for a 30-60 minute consultation when a fixed cost legal services program enables an owner to more readily pickup the phone now to seek a quick answer.

I am a lawyer, not a business consultant, but people sometimes feel better knowing that I was a key executive of a twelve million dollar national consumer products in my mid twenties. I think I have an idea of what it is like to be in the shoes of a small business owner.

SEEKING A NEW HOME? – PAY ATTENTION TO THE CUES

2009-04-12T21:13:00.001-04:00

SEEKING A NEW HOME? – PAY ATTENTION TO THE CUES

A home is a big investment of time and money. The saying goes that it is also your castle. You must ask questions if you want to maximize your chances of successfully finding your castle, and minimize the chance that you find a mud hut or money pit. Just as important is the idea that you should pay attention to what people are telling you about the seller's and the home. People will casually give you a lot of information if you will simply listen and make note of what you are told.

Let me give you an example. A Realtor® , a neighbor, or a selling home owner themselves, casually mention one of the following: there is marital discord; there are financial issues; someone lost a job; or someone has been seriously ill. I would bet that the average potential buyer thinks that this may be a cue that there is an opportunity to buy the home at a lower price, if they even note the casual comment at all. As an attorney, it sends me a totally different cue. I once had a client mention as a throw away piece of gossip that the selling couple might be getting divorced. Knowing that a divorce can have an impact on the transfer of a property, I searched the court records looking to see if a divorce had been filed. I did not find a divorce filing, but I did find a long pending foreclosure lawsuit affecting the seller's home, something the buyer and their Realtor® did not know about. Just one example of how important a seemingly small piece of information can be.

Example #2: A buyer is told that the 30 year old house has a 3 year old gas burner heating the house (one of the selling points of the listing). The cue given to the typical buyer is that this is an old home that has new improvements and this is one important item on their inspection checklist that they probably won't have to worry about. That's not my cue. To me that piece of information begs the question, “how was the home heated for the first 27 years before the new gas burner was installed?” As an attorney I am hoping to gain information that will lead me to the conclusion that there is no abandoned oil tank with the potential to pose environmental liability issues.

I'll give you one more example. You are looking at buying a home that someone has lived in for thirty years. The house is fairly well kept but has thirty years worth of stuff in it. You as the buyer have a need to move in 4-6 weeks weeks for one reason or another. The seller wants two months but agrees to move in five weeks based on the price. Perhaps there is no cue for you in this situation. You just think that you are getting the deal you want/need. If I know that the people have 30 years worth of stuff and that they were originally seeking two months to move, then that cues me in that the buyer's drop dead move in date may not happen. I have seen it occur more than once where the seller could not move as easily as the buyer expected. Sometimes there's a limit to what a Buyer can do about it other than to have the right expectations. It's common that the more a buyer tells me about the home, it's occupants, the listing, the casual conversations, and the negotiation/discussion that lead up the actual agreement, the more I can help the Buyer.

Just like when a date, a friend, an employer, or a salesperson tells you something that seems silly or unimportant, don't be too quick to dismiss the information. People are always giving you relevant and important information, whether you and the communicator realize it or not. The moral of the story is to pay attention to everything that is said or written about the property and the homeowner, and make sure you give all of the information that you know to your attorney, no matter how trivial something seems. You never know if divulging what seems like a small detail will help you ultimately avoid a pitfall or at least have the most reasonable expectations.

By Albert Unger, Esquire. © 2009 All rights reserved. This article should not be reproduced without the permission of the author.

Attorney Unger is a licensed attorney in the State of Connecticut and practices real estate law among other areas. The examples in this article are culled from real experiences that have occurred during the course of real estate transactions that have been handled by Attorney Unger. For more information contact him at albert@attorneyunger.com.

THINK OF THE CHILDREN FIRST

2007-06-24T16:54:00.000-04:00

TV's Fred Rogers was the Commencement speaker at my college graduation. I never understood the propriety of his being our speaker, nor did I understand the importance of his theme to "think of the children first", until now.

Who is thinking of or caring about the children that end up in our child protection or juvenile justice systems?? Sometimes I wonder.

THIS IS AN ARTICLE IN PROGRESS. IN THE MEAN TIME, PLEASE VISIT THE FOLLOWING WEBSITES TO LEARN HOW YOU MAY BE ABLE TO HELP CHILDREN AND FAMILIES IN NEED:

http://www.kidsincrisis.org/ Kids in Crisis (Greenwich, CT & Norwalk, CT)

http://www.sccweb.org/ Stamford Counseling Center

http://www.familyandchildrensagency.org/ Family and Childrens Agency

Employment: Non Compete agreements for employees

2006-10-14T00:01:00.000-04:00

For simplicity sake please understand that duration of the restriction, geographic area of the restriction, scope of what is considered a 'competitive business' to your employer, and public policy all affect your employers chances of enforcing a non compete.

For example a six month restriction in a large geographic area may be upheld, and a three year restriction limited to State of Connecticut may also be upheld.

The reality is very fact specific. There are many cases where an attorney can only give you a rough idea of the enforceability of the restrictions because the facts that would lead to a conflict between you and a former employer may not have occurred yet, and because Courts do not act in a uniform way at all times. For example, there are some Connecticut trial courts that have held that an employer cannot enforce a non compete restriction against an employee where that company has previously violated a material component of the employment agreement within which the non compete restrictive covenant is contained. Such a fact may inform a court reviewing your matter, and such a fact may be persuasive to the Court, but they would not be bound to follow the decision of another Superior Court Judge. One other factor to consider is the simple concept that statutes and case law change from time to time. Be wary of anyone who claims to have a crystal ball.

Non compete clauses should be taken very seriously. Do not just assume that if a restriction is broad and vague that it won't be enforceable. Do not assume that just because you have a reason to believe that the employer won't enforce it against you that such notion is an absolute fact.

You should consult with an attorney before you sign any employment agreement, especially one with a non compete clause.

**Please note: This article is for general information and discussion purposes only. You should not use any information in this article as a substitute for consulting an attorney or other competent advisor. Nothing in this article should be construed as forming the basis of an attorney-client relationship. This article is not a solicitation.

Attorney Unger is licensed to practice law in Connecticut State and local federal courts only.

Can you afford this home??

2006-10-13T23:41:00.000-04:00

Buying a home is not as simple as picking a home and getting a loan. Here is a brief list designed to help you avoid pitfalls in regards to financing a home purchase:

1. You need to determine if you can truly afford the purchase. Find out before you sign a purchase contract what your monthly cost is going to be including loan payment, taxes, common charges, association due, and estimated utilities.

2. Get a Good Faith Estimate from your loan officer prior to signing a contract to purchase a home.

3. Get a preliminary Truth in Lending sheet showing the estimated payment schedule for your loan. You may be surprised to see that a few years down the line your payments are expected to jump dramatically.

4. Realize that if a loan program seems to good to be true, it probably is......

5. Pay attention to how responsive your mortgage broker is in returning your calls/emails, following up on pending items, and explaining the details of the loan product & pricing that you are considering. Look to see to what extent they deliver on any promises they make early on. Whatever early experience you have with them, bad or good, is likely to be reflective of how the entire transaction proceeds.

6. Most importantly, talk to trusted independent financial advisors about what you can afford after choosing a loan product but before signing a real estate purchase contract. Your attorney is generally not the one you should rely on for financial advice, and most will not offer it. You want to talk to a reputable CPA, financial analyst, perhaps a family member that is excellent with budgeting and finance.

WSJ warns about inflated home valuations

2006-07-23T21:38:00.000-04:00

My comments are based on a Wall Street Journal front page article dated 07/22/06.

Up until fairly recently residential real estate appraisers had a lot of incentive to make rosy best case scenario valuations that may have been somewhat justifiable only because the market was moving so fast. Banks and appraisers are now getting more conservative based on a slower market.The problem now is that people who bought in the recent past received loans based on those inflated valuations. For some people, if they need to sell or refi they may find that they have a problem because they will owe more than the current value.

If you think you may be at risk for this type of home valuation problem, be proactive! At the very least get a market evaluation of your home by a good real estate agent, compare that valuation to the appraisal that was done when you first bought the problem, and check your loan statement to see if you owe more than th current market value.

Talk to a good real estate lawyer, mortgage broker, and real estate salesperson before you start running into problems. If you see you have a problem or are heading towards one you may have more of a chance to minimize the costs of the problem as well as to rectify it. This may be a good time for some kind of diagnostic to attempt to avoid terminal asset/liability problems.

Interesting Supreme Court Case Regarding Discrimination

2006-02-22T09:18:00.000-05:00

Discrimination in the workplace is a rather important issue that is frequently in the news. We all need to be aware of such actions taking place. I recently found an interesting article from the Chicago Sun Times that can be found here. To follow the most recent Supreme Court cases, go to findlaw.com.

T – E – A – M !

2006-02-14T13:16:00.000-05:00

By Albert Unger, Esq.

$300,000? $500,000? $800,000? More???? A large percentage of buyers will spend this kind of money to buy a house or condo in Fairfield County, CT. Whether you have bought real estate before or not you want a group of professionals to help you turn your dreams into reality…right? The seller has a team protecting their interests and advancing their goal. Who is protecting you and helping you ‘win’ in this process? How do you maximize the chance that things will go smoothly? How do you gain leverage that may affect whether or not you get the property that you want? How do you attempt to control the emotional and financial cost? How do you spell relief?

T – E – A – M. Yes, team. YOUR team.

Most homebuyers do not realize that they are general managers in their home buying process who are drafting a team to assist them. You want a winning team that will carry your ball across the goal line for a score. Unfortunately many buyers view the real estate agent, mortgage broker, home inspector, and attorney as individual interchangeable parts of the machine. A buyer might think that each of the four parts plays a very specific individual role in the process……right?? Well…sort of…..

Reality: Like it or not you are assembling a team (or an engine, or a gourmet meal). Put together the wrong parts or ingredients and the whole thing falls apart…or at least does not come together without a little extra stress and strain on you. The four professionals you choose will work together most efficiently and effectively in their quest to carry out your goal when they communicate well together and work hand in hand. It is really that simple. However there is so much going on in the buying process….and sometimes so quickly…that the team concept can get lost on anyone. If that concept is missed you may inadvertently end up with firefighters…or worse yet Monday morning quarterbacks. You need team builders and professional players.

Start with a good real estate agent. They need to make you feel comfortable and they need to be educators, facilitators, and your quarterback on the field. At the point where they have successfully helped you negotiate a deal for your desired property, they may be cheering on the sidelines, but they are still communicating with your team members on the field. The agent also continues to orchestrate events and stands ready to get back on the field if necessary to keep things flowing. Money makes the deal go ‘round. So make sure you are picking a great mortgage professional who will work well with the rest of your team and communicate with them as needed. The best mortgage professionals are extremely service oriented relationship builders who do not rest on their laurels after they deliver a mortgage pre approval or commitment to you. They remain actively engaged in the process. That mortgage team member can make or break the deal based on how diligent they are in pushing the ball downfield and communicating with your other team members. The home inspector has a small but very vital role to play. They need to be diligent, flexible, efficient, and honest. They need to give you the straight scoop on the condition of the property without alarming you over defects that by most standards would be considered minor. Lastly, they must quickly and effectively provide your real estate agent and attorney with the relevant details of the inspection in a manner that will arm them with the facts necessary to smooth over any bumps in the road that may occur. This is a stage where you often still have a chance to cleanly back out of a bad deal. So do not overlook their importance as a team player. The last critical piece of the team is the attorney. Once a deal is in place the attorney is the person most responsible for protecting you, facilitating the execution of the transaction that your real estate agent put in place for you, and trouble shooting issues that may block your path to the goal line. A good attorney needs to communicate well with your other team members, as well as the seller’s representatives. A good attorney needs to keep track of dates and items to complete to make sure the deal stays on track. A good attorney is not afraid to pick up the phone and communicate in an effective manner with others that impact your home purchase. You don’t want to be left holding the ball with time running out. You want your team members running the ball for you based on your instructions intended to achieve your goals.

There is a lot more to the roles of the various players, but that is a topic for another day. Just remember that this is a team much like any team. The stakes are high and the stakes affect you directly in a very personal way. Great professionals carrying you across the goal line can even make a somewhat stressful process fun. Pick your team wisely! Questions? Email me: Albert@AttorneyUnger.com.

This article is ©Albert Unger, Esquire. All rights reserved. Do not duplicate without the permission of the author.

Attorney Albert Unger is a Connecticut Real Estate attorney, as well as a former practicing real estate agent. He has also been involved in home transactions as a buyer and as a seller.

Welcome to the CT Legal Blog

2005-07-13T21:41:00.000-04:00

Albert Unger, Esq.

Danger Zone: For Sale By Owner

2005-07-13T20:57:00.000-04:00

NEW as of 1/17/06

Danger Zone: For Sale By Owner (FSBO) - limit your risks! by Albert Unger, Esq.
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This is an article in progress.

Installment one:

If you have never bought or sold a home before.....how do you go about getting the information to do it yourself? There are many books and other resources for self help but they are very problematic. Here are my top ten reasons why you may want to consider a real estate team including an agent and an attorney:

10. Agents & Attorneys have helped hundreds, and sometimes thousands of buyers and sellers. Has the do it yourself author/publisher have that experience, and do they have that experience in light of Connecticut law and in light of practices that vary from county to county (sometimes even town to town)??

9. Do it yourself real estate and legal information is often generic. It may not take into account law that applies in Connecticut, and it may not be updated in a timely fashion for changes in the law. (See my future article on how off the shelf software can cost home improvement contractors big bucks!)

8. Since you do not buy and sell homes yourself every day, and since you DO have an emotional attachment to your home, how do you know you won't say the wrong thing or reveal information that you are not obligated to reveal?

7. Do you know anything about the reputation about the mortgage company or the individual agent if you are not relying on professionals.

6. Do you really want to have hold your own open house and watch people scrutinize (and sometimes mock) your home? Do you have all of the many hours it takes to hold open houses and to be available any time someone wants to see your home? If you are a buyer do you want to go to open houses without a decent preliminary idea about whether or not the home may be right for you. (Agents know how to help you determine what you REALLY need, and if the have not seen a home they can spend THEIR TIME to preview it to see if it is right for you so that you do not waste YOUR valuable time).

5. Sellers: Do you know that buyer's often take advantage of your situation by taking 5% off your price in their mind? Did you realize that most of the time there is a much higher chance of multiple offers and a bidding war for your home if you are on the MLS and have an agent working your listing? So..... what are (would) you really save by not using a real estate agent.

4. Buyers: Will you read the property disclosure report (if you even get one) if there is no agent or attorney advising you on the deal? Do you know what to look for if the seller tells you they have never had an oil tank, never had a basement leak, and never had termites?

3. Legal alert: Do you really know what your rights are in regards to deposits? The law is not always cut & dry in this area and the outcome may vary from state to state. If you give a deposit (or hold one)...is that money in an escrow account and is a trustworthy third party in charge of that money?

2. Do you subscribe to the philosophy that penny wise often less than a wise outcome? Are you enough of a risk taker to take big gambles with the largest investment of your life?

1. If you are a buyer how do you know for sure that the seller will use your funds to payoff their mortgage so that it does not affect your ownership of the property? If you are a seller how do you know that the pre approval, mortgage commitment, deposit money, and closing funds are any good? Do you know the difference between a pre qualification, pre approval, and a commitment? (In a rare occasion the mortgage broker does not explain to you how big of a difference there is)