Real Estate: Risk Management

environmental protection agency is a federal agency, department of environmental protection is a state agency
wetlands protection act
MA environmental law which makes a 100 feet buffer zone from riverbanks and shorelines
comprehensive environmental response compensation and liability act of 1980 regulates assessment damage to natural resources when hazardous substances are released, amended by superfund amendments and reauthorization act
Massachusetts oil and hazardous material release prevention response act
Massachusetts oil and hazardous material release prevention response act, 21E, is a superfund law, certificate certifies that commercial property isn’t contaminated
clean water act of 1972 regulates water pollution
National Flood Insurance program
if property is high risk flood zone and community participates, then then property must be insured and loan is through federally regulator lender
Endangered species act
of 1973, this federal act can limit property use and development
Lead Paint guidelines(4 rental, 4 sales)
1.rental:all rental property made after 1978 occupied by a chile under 6 must be deleaded
2.lead hazard mitigation is only good for 2 years tenants must be given lead paint notification form and tenant certification form, landlord must delead for children, no waiver allowed turning away qualified tenants with children
5.sales: prospective buyers must be notified of their lead rights prior to signing P&S
6.buyer has 10 days after signing to do lead inspection, if it fails the buyer does not have to buy and the seller doesn’t have to delead
7.buyer may waive the 10 day inspection provision
8.buyer has 90 days to delead if child under 6 lives there
title 5
requires a certain level of performance from the septic system, it must pass inspection with in 2 years prior to sale or 6 months after sale
occurs naturally , odorless, colorless, radioactive seeps into cracks in foundation and builds up to dangerous levels causing cancer and other nasty things, can be vented out
occurs naturally gets trapped in weather tight homes, removal of hazard is regulated, disposal requires fire department, asbestos must be encapsulated, mold is scrubbed away or material is removed
home inspection
not a legal right of buyer is has to be in sellers contract, at buyers request sellers agent may give the list of all home inspectors, cannot be trusted to recommend a good one. Buyers agent may recommend a specific one but it is good to give the guyer options too
property disclosure
law requires fair and honest dealing , buyer has right to certain disclosures by all agents, sellers agent must disclose legal obligations to client
caveat emptor
“let the buyer beware” not allowed, it implies that the buyer does not have the same information as the seller and therefore can be tricked into dealing with problems after purchase, but buyer cannot ignore obvious problems like property abutting a highway
3 categories of disclosure
1.must be disclosed
2.must not be disclosed
3.must be disclosed upon sellers asking only
must disclose
must be upfront until the closing
any material defects in property, title problems like a neighbor with an easement or encroachments by a neighbor. physical problems like leaks infestation floods. permeant conditions in surrounding area like noise and smells. home inspection doesn’t trump disclosure requirements . All hidden defeats must be shared with the buyer and they can buy it as is. both buyer and agent must declare if there is a condition that would negatively impact their ability to purchase. if agent hears confidential info about the other party she must disclose it
must not be disclosed
personal information about the either party which does not inhibit the parties ability to proceed must not be disclosed by their own agents, like the lowest price the seller will take
stigmatized property
murders suicides hauntings, sellers agent doesn’t volunteer info but if asked directly he must answer, buyers agent must disclose this info to buyer
errors and omissions insurance for liability on agent malpractice, limited liability partnership must have it. Agency’s E&O covers all working agents
agency must obtain general insurance for agents, general liability like tripping, and directors and officers D&O for mismanaging, every broker mud have a surety bond to practice, properties must have flood zone insurance if in that area, landlords insure liability over common areas and occupied premises are tenants responsibility
record keeping
basically all documents must be kept for 3 years
privacy, security, confidentiality
open houses are best conducted by 2 agents and house should be secured against theft, agent cannot disclose confidential information without permission, seller is allowed to know the names of all parties , agencies representing both buyer and seller must make sure the office is secure and information is not disclosed, no free discussion between agents, no overheard phone calls, no stand alone fax machines
securities license
must have one to sell interest in investment securities are regulated on a federal state law, SEC
legal council
no agent shall advise against the use of a lawyer, always recommend them
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