Disclosures


This is a follow up to my July 2, 2o10 and June 8, 2007 reports on Kitec Plumbing.

PRESS RELEASE

FOR IMMEDIATE RELEASE

Contact: William L. Coulthard, Esq. or Michael J. Gayan, Esq.

Telephone: (702) 385-6000

Re: In Re Kitec Fitting Litigation; Clark County District Court Case No.: A493302

COURT EXTENDS DEADLINE FOR THOUSANDS OF CLARK COUNTY HOMEOWNERS TO CLAIM FREE REPAIRS OF DEFECTIVE KITEC PLUMBING SYSTEMS

At a hearing held on September 14, 2011, the Honorable Timothy C. Williams extended the deadline by three months for thousands of Clark County homeowners to claim free replumbs of the defective brass Kitec plumbing systems. The eligible homeowners now have until March 31, 2012, to claim the free replumbs made possible through settlements reached in the In re Kitec Fitting Litigation class action, including the $90 million settlement with the fitting manufacturer, Ipex, Inc. and Ipex USA, LLC. The homeowners must act now or they will forfeit any right to claim relief from the class action settlements and will have no rights to pursue Kitec-related claims against the manufacturer or the Home Builders or Plumbers responsible for installing the Kitec plumbing systems. Class Counsel, Michael Gayan of Kemp, Jones & Coulthard, LLP, explained that “[I]n extending this deadline, Judge Timothy Williams recognized the importance of class homeowners having a full and fair opportunity to claim their repair under this class action settlement.”

The deadline extension impacts more than 6,000 Clark County homes built by Del Webb, KB Homes, Richmond American, Avante Homes, Signature Homes, Astoria Homes, Pulte, Nigro, D.R. Horton, LBM Development, Wexford Homes, American Premiere, Concordia, Desert Wind, H&H, Pageantry, Platis, RL Homes, SBA Development, and Westmark Homes. A complete list of the developments involved is found on the Court-appointed claims administrator’s informational website, www.TotalClassSolutions.com/Settlements.

The class action lawsuit, which involves more than 32,000 Clark County homes, alleges that as soon as Kitec fittings are exposed to water, the brass in the fittings begins to deteriorate and corrode, which inevitably leads to reduced water flow, leaks, and breaks. There have been hundreds of reported leaks with resulting flood damage to homes. Kitec fittings not only cause substantial damage after they leak and burst, but also impair the ability of a home’s plumbing system to effectively provide water to appliances and plumbing fixtures.

Tim Taylor, President and CEO of the Court-appointed claims administrator, Total Class Solutions, LLC, stated that, “[T]hese homeowners have about six months left to claim the free replumbs. After that, Total Class Solutions will have to turn them away without any relief. It would be a real shame for homeowners to miss out on getting the repairs they need. Class Counsel recovered the resources to fix all the homes and it’s our goal to make that happen. Now we just need the homeowners to contact us and ask for the repairs.”

The approved plumbing contractors doing the work for the class are Delta Mechanical, Dynamic Plumbing, Repipe Specialists, Rakeman Plumbing, Hammer Plumbing, and Plumbing Express. If you are contacted by one of these plumbing companies regarding a free replumb, it is because you may be entitled to receive the repair at no cost to you as a result of this class action lawsuit. All of the homeowners are represented by the law firms of Kemp, Jones & Coulthard, LLP and Lynch, Hopper & Salzano, LLP. These firms were appointed as Class Counsel by Judge Williams on October 16, 2006, when the Court certified a class action lawsuit on behalf of all homeowners in Clark County, Nevada, who have brass Kitec plumbing fittings in their homes.

For information on how to claim the Kitec repairs, go to www.TotalClassSolutions.com/Settlements, which has been established by the Court-appointed claims administrator, Total Class Solutions, LLC.  For more information about the class action itself, please go to http://www.PlumbingDefect.com, which has been established by Class Counsel to inform potential class members about this litigation.

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For more information on this topic, please contact William L. Coulthard or Michael J. Gayan at (702) 385-6000.

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Is REO title safe?  I contacted Equity Title of Nevada and asked this exact question and here is what I have to report.

Yes.  Provided you have title insurance.

Then why these reports about REO, and foreclosure?  These indictments you hear about from the Attorney General are discussing the ‘procedures’ that some limited persons used in filing foreclosures.  The Attorney General is not representing the consumer in attempting to unwind any sales.  The question really is, will a former owner arrive and demand to be reinstated on title?  Well, since that would come with the debt also, let’s just say, I doubt it.

But if there is a claim about the foreclosure process that affected my home (literally my home is listed as one of those with potential previous foreclosure defects) am I safe?  Yes, again. The odds of there being a claim on your title are very remote.  If there was one, you have title insurance, and you are going to be able to get title insurance in the future.  So it is a non-issue for the normal consumer.

Let’s discuss title insurance.

On residential purchase transactions, there are three primary forms of title insurance that are currently available to buyers.

  • The Homeowners Policy (most recently revised in 2010).
  • The ALTA Residential Policy (1987 form).
  • The ALTA 2006 standard coverage owners policy.

All of these policies provide coverage against loss or damage sustained by reason of title defects which exist as of the date of policy.  Imagine a hypothetical scenario in which, after the date of policy, a former homeowner files a lawsuit which seeks to set aside the prior foreclosure as defective.  If this former owner is successful and ultimately obtains a final, non-appealable court order which rescinds the foreclosure and reinstates his ownership interest then he will have established that the insured’s title was in fact defective as of the date of policy.  Even though the filing of the lawsuit itself was a post-policy matter, the outcome is a court determination of a pre-policy title defect, i.e. an invalid foreclosure.  In this scenario, a title defect or a marketability claim tendered by the insured under any of the above listed owners policy forms would presumably be determined by the underwriter to be a covered matter which must be defended.

There is however, a new law that went into effect on October 1, 2011.  This new law may cause some discussions.  Title companies may not be willing to insure post-foreclosure without a special exception for any claims that are based on an allegation that the foreclosure did not comply with the provisions of AB284.  An REO buyer must simply object to not receiving this coverage.  This is not happening now.  The coverage is being granted.  We need merely watch the field and see if the industry changes.

Equity Title of Nevada recommends to any residential buyer that they consider obtaining the Homeowners Policy. There are many additional benefits to this form of policy which are worth a buyer paying the additional 10% premium.

Any questions, email me darren@dwelshlaw.com or call me 7022451787.

Private Transfer Fee (Sellers Real Property Disclosure Form)

***UPDATE*** on March 15, 2012, the Federal Govt. /Washington, DC – The Federal Housing Finance Agency (FHFA) has sent a final rule to the Federal Register on private transfer fees. The final rule limits Fannie Mae, Freddie Mac and the Federal Home Loan Banks from dealing in mortgages on properties encumbered by certain types of private transfer fee covenants and in certain related securities. Transfer fees are contractual arrangements where an owner pays a fixed amount or a percentage of the sales price at the time of transferring the property. ###

 

Private Transfer Fee (Sellers Real Property Disclosure Form)

Question #15 on the Nevada Seller’s Real Property Disclosure Form(SRPD)- “This property is subject to a Private Transfer Fee Obligation?”

What is a Private Transfer Fee?  It is an encumbrance on the property, which shows up like a mortgage deed.  It is a recurring fee paid back to the Seller, every time a sale occurs, in exchange for clear title.  The Seller maintains a financial interest in the property for decades after it’s been sold, not with a mortgage or a loan but with a private transfer fee.

As of May 2011, in Nevada they are not legal.  Per Nevada Assembly Bill 271

http://www.leg.state.nv.us/Session/76th2011/Bills/AB/AB271_EN.pdf

Nevada joined with more than half of the rest of the Country in banning private transfer fees on real estate– AB 271 makes all new private transfer fee obligations “void and unenforceable.”

If you have an “existing Private Transfer Fee” it remain legal, but the beneficiaries of currently recorded private transfer fee covenants are subjected to new recording and notice requirements to preserve their interest, including civil penalties for creation of new private transfer fee obligations or failure to comply with the recording requirements.

Question 15 of the Nevada Sellers Real Property Disclosure Statement (SRPD) asks if, “This property is subject to a Private Transfer Fee Obligation?”

Thus per the new SRPD, sellers of properties in Nevada with existing private transfer fee obligations must disclose this encumbrance.

This is a series of Disclosure Entries see also:

Nevada Disclosure In Residential Sales

An Updated All Inclusive & Belt Way Disclosure

The New, Improved All Inclusive Disclosure

Nevada Condominium Hotel Disclosure

Nevada S.R.P.D. New Clarification of Real Estate Disclosure  Laws in Nevada

Any questions, you can call me Darren Welsh 702 245 1787.

   …… Changes to the Nevada residential real property disclosure.  Effective October 1, 2011 the Seller’s Real Property Disclosure Form, also known as the S.R.P.D. can longer be waived. This form must be provided in just about every residential transaction in Nevada.  There are some exceptions, see below.

    …… The statute controlling this form (NRS 113) was modified within Senate Bill 314 in the July 2011 Nevada Legislative Session removing the section that allowed a seller and buyer to mutually agree that the SRPD would not be provided. Such a waiver had to be signed before a notary by a buyer.  The Law can be found here NRS 113

  …… This will affect many sales such as probate, short sales, and bank owned (REO). Exceptions are foreclosure (when the trustee sale occurs, not a bank selling after they have already foreclosed) between co-owners and new home. All sellers in Nevada must now provide this form. Some sellers have not lived in, or even seen these properties, but the statute is clear, it must still be filled out. If a Seller does not provide the form, a buyer may cancel, without penalty.

…… This should not affect the August 7, 2007 entry on disclosure – New Clarification of Real Estate Disclosure Laws in Nevada.  Remember in that case (the Nelson Case), the Nevada Supreme Court ruled on the scenario where a defect, now repaired, was not disclosed on the Nevada SRPD – “Once the [damage] was repaired … it no longer constituted a condition
that materially lessened the value or use of the [home. Accordingly, [the Seller] did not have a duty to disclose the …. damage.” This rule would still apply.

This is a series of Disclosure Entries see also:

An Updated All Inclusive & Belt Way Disclosure

The New, Improved All Inclusive Disclosure

Nevada Condominium Hotel Disclosure

Nevada S.R.P.D. New Clarification of Real Estate Disclosure  Laws in Nevada

Any questions, you can call me Darren Welsh 702 245 1787.

January 17 2011 Mt Charleston

January 17 2011 Mt Charleston

EFFECTIVE June 13, 2011.  This law was repealed.  The subject of this blog was that the Nevada Energy Commissioner established a program for evaluating energy consumption in residential property in Nevada which required a seller to provide a copy of this evaluation to a purchaser of his or her property. (NRS 113.115, 701.250).  That law has been appealed by AB 432.  Which can be read here.  http://www.leg.state.nv.us/Session/76th2011/Bills/AB/AB432_EN.pdf

THIS FORM IS NO LONGER REQUIRED. 

This is a follow up to my December 28, 2010 submission Seller’s Energy Consumption Evaluation Form.

As you know effective January 1, 2011, there is a new form from the Nevada Renewable Energy and Energy Efficiency Authority which is known as the Seller’s Energy Consumption Evaluation Form which is commonly known as the  “SEEF,”  Pursuant to Nevada Revised Statute (“NRS”) 113.115.

There is now a new form that allows the Waiver of the SEEF form.  In lieu of having to use the entire SEEF form, and use the waiver section of Page 4 of the SEEF, you can now have the Seller and Buyer sign this Waiver of the SEEF.

The waiver form is also effective January 1, 2011, although it came out a bit later.

The Waiver of the SEEF form is located by clicking HERE.

The SEEF form is located HERE.
An explanation of the SEEF form is on the SEEF form.
Instructions to fill out the SEEF form are located HERE.
Any questions?  Darren Welsh, Esq. 702 733 9310 ofc, 702 245 1787 cell.

Dr. Hatice Gecol  Nevada Energy CommissionerSeller’s Energy Consumption Evaluation Form

There is a new form concerning residential real property sales.  The Seller’s Energy Consumption Evaluation Form or the “SEEF.”  Pursuant to Nevada Revised Statute (“NRS”) 113.115.

When is it effective?  January 1, 2011.

The SEEF form is located HERE.

What is it? An energy consumption evaluation. The explanation is more in depth on the SEEF form.

Instructions to fill out the SEEF form are located HERE.

When must it be provided?  Before closing.

Can it be waived by the Buyer?  Yes, and on page four (4) of the SEEF there is already a section to have the Buyer waive the receipt.

Who is exempt? 1.) Foreclosure (not REO) but at the time of the trustee sale.  2.) Sales between co-owners.  3.) Relocation Companies (only the transfer from owner to relo company, not to purchaser from relo company).  4.) Sales where Buyer waives their rights to receive the form.  5.)  If an evaluation was completed in last five (5) years, that older evaluation may be used.

Suggested language.  If you are representing a Seller, and the Seller does not want to provided the SEEF
I suggest the following language in a counter:

“Buyer agrees to waive receipt of the Seller’s Energy Evaluation Form (SEEF)”

Any questions?  Darren Welsh, Esq. 702 733 9310 ofc, 702 245 1787 cell.

There is a new Short Sale Addendum for purchase agreements.  This form which serves to better define the terms of the Short Sale has some new additions and removed some items.

This is a great tool for short sales.

Here are the changes…

Section 1 – now has this language, “Seller understands and acknowledges that lender approval may be conditioned upon any or all of the following: (a) making a cash payment; (b) signing a new promissory note; (c) continuing to owe the lender the unpaid portion of the loan(s); and (d) other requirements made by lender.”

WHAT IT MEANS – Short sales, unlike any other normal sale can result in the Seller having legal liability in years to come.  This can come in the form of collections or even law suits.  This section serves to better warn the Seller.  See my blog on Seller Liability After Short Sale

Section 2 – the Lender Short Sale Approval Addendum has been incorporated into the Addendum.

WHAT IT MEANS – See my explanation of the Lender Short Sale Approval Addendum form by clicking here.

Section 3 – now has the language, “either Party may, in its sole discretion, reject the amended terms required by Lender.”

WHAT IT MEANS – If the Lender changes the terms, for example refuses to pay closing costs from proceeds, any party may cancel.

 

Section 4 – Time Frames, due diligence commencement has been changed to “(1) calendar day after the Parties’ mutual written approval of the Lender Approval”

WHAT IT MEANS – Due diligence commences upon the Parties agreeing to the terms of the Lender.  This is tricky.  If there was no change by the Lender, then this should be when the listing agent informs the selling agent of Lender approval.  If the Lender changes the terms and the Lender Short Sale Approval Addendum is used, then the due diligence commencement is the date of the final signature of the Parties, not the date it was served upon the selling agent.

 

Section 6 – The first right of refusal has been REMOVED!  All subsequent offers are now “back up offers.”

Section 9 – Legal and Tax Consequences has added, “A Short Sale May Have Serious And Adverse Legal, Tax, Credit And Economic Consequences For The Seller. Seller agrees to seek advice from an attorney, a certified public accountant or other qualified professional regarding the legal effect and meaning of a short sale and any Lender Approval.”

WHAT IT MEANS – Short sales, unlike any other normal sale can result in the Seller having legal liability in years to come.  This can come in the form of collections or even law suits.  This section serves to better warn the Seller.  See my blog on Seller Liability After Short Sale

This is part of my short sale series listed below in alphabetical order:

7 Tips for Short Sale

Addendum to Short Sale Listing

Charging for negotiating short sales/Negotiators

Deficiency Judgments Nevada

Foreclosure and the One Action Rule in Nevada

HAMP the Federal Shortsale Program coming April 2010

Income Taxes & Foreclosures/Shortsales

Lender Short Sale Approval Addendum

Nevada Supreme Court Mandatory Mediation Program and How it Affects Shortsale

Nevada Short Sale Documents

Seller Being Released From Liability Language in Shortsale

Seller Liability After Short Sale

Shortsale Wallet Size Answer Sheet

IRS PUBLICATIONS shortsales/foreclosures:

IRS publication on how 1099 taxes are calculated, exempt, etc.

IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.

Questions?  Call me Darren Welsh, Esq. 702 245 1787  or drop me a TPS by filling out this form.

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