The State Water Resources Control Board (SWRCB) released their updated draft Cease and Desist Order (CDO) this week. Hopes for sympathy or some level of practical understanding of impacts associated with its implementation, have disappeared into the vast netherworld of bureaucratic machinations.

The amended document stays the course on previous demands and further defines compliance thresholds and requirements. The draft establishes a 5% reduction (549 ac-ft) starting in October 2009 and cumulatively increases by 121 acre feet each year until 2014, at which point the annual reduction doubles to 242 acre feet annually (afa). This formula assumes that a new water supply will be online sometime in the year 2016, the deadline for by which Cal-Am “shall terminate all unlawful diversions from the river”. The total cumulative reduction in water diverted from the Carmel River will be around 25% by the year 2016.

The modified draft puts the onus of responsibility on Cal-Am, it’s users (us) and local leadership to bring a new water supply online – ideally prior to 2014 when the annual reductions double. The California Public Utilities Commission is set to make a determination sometime early next year as to what project they deem to be most appropriate for the region. At this point, the Regional Project seems to make the most sense, both fiscally and environmentally with the least amount of potential legal challenges associated with it.

Interestingly enough, the revised draft CDO acknowledges and applauds Pebble Beach Company for its use of recycled water, and then goes on to say that no exceptions should be made for the Pebble Beach Company, nor should they (this being property owners in PB) be exempt from MPWMD conservation requirements. Essentially, the CDO is underscoring the state Board’s desire to see a moratorium on any new water connection (or change of use resulting in a water demand increase) prior to a new water supply coming online.

In Summary:

Should the SWRCB adopt the draft revised CDO in October, the amount of water Cal-Am can pull from the Carmel River will be reduced by 5% – starting sometime in October or November 2009 (cumulatively increasing to 25% by 2016). The Monterey Peninsula Water Management District (MPWMD) will then most likely set their water rationing level to stage 5, resulting in a moratorium on all new connections along with additional mandatory water conservation measures. Per the MPWMD, there will be a window of approximately 60-90 days before the new conservation requirements will be in place. The timing of all of this is not exact. Should litigation follow ratification of the CDO, a delay in any type of MPWMD water rationing/moratorium plan is almost certain, pending a court decision…this could be decided in weeks, months or years. We will need to modify the County Disclosure based on the outcome of October’s SWRCB meeting – should the CDO be adopted. Proper communication with clients is imperative, and we will continue to disseminate information as it becomes available.

While the number of closed sales (361) is down from previous months this year, it is an increase from the August 2008 figure of 320. Inventory is down substantially from this time last year; 1548 single family residential units compared to more than 2700 in August of 2008, a 42 percent decrease. Fewer available units on the market combined with the decrease in new listings coming available, produce an environment conducive to housing value appreciation which is what we are experiencing in various micro markets throughout Monterey County.

Median sale price [on average] went from $335,000 in August 2008 to $428,540 in August 2009 (based on average median price of all cities within Monterey County), an increase of nearly 28 percent. Average days on the market (county-wide) is hovering below 100, good news for homeowners listing their property for sale – especially considering the increases in median sale price throughout the county.

The data suggests a recovery in various aspects of the local housing economy. While it’s impossible to determine exactly where the market is going, dissemination of information on where we’ve been is critical for the informed buyer. Contact a local REALTOR® today to find out more on current housing opportunities you may be able to take advantage of.

(Data courtesy of MLSListings, Inc.)

As was reported in my last Water Update, the proposed CDO would require immediate reductions in the amount of water diverted from the Carmel River. The CDO would require a reduction of 670 Acre Feet Annually (AFA) (~5%) beginning on October 1, 2009 which would gradually escalate to around 21% by 2015. To borrow the CA Public Utility Commission’s (CPUC) analogy; “each acre foot of water in the Monterey region serves about four households for one year. A 21% annual reduction, with no replacement water, would be equivalent to no water for about 6500 families”. To reiterate our documented position and that of other local stakeholders: the proposed CDO simply is not realistic, feasible, equitable or reasonable on any level.

A piece of good news was reported last week in the Herald regarding the CA Public Utilities Commission request that the SWRCB apply some level of common sense in respect to the proposed CDO. The very fact that the PUC would submit a letter urging consideration for more time to be given demonstrates not only the magnitude of the situation but offers a sense of hope that a California regulatory entity would actually understand and defend taxpayers who are being held responsible for the states punitive charge against Cal-Am.

Current water use on the Monterey Peninsula averages 70 gallons per capita per day, (GPCD) the lowest in the entire state. The statewide average is in the ball park of 192 GPCD. If the proposed CDO were ratified as it is drafted today, the Monterey Region would be reduced to the lowest levels actually experienced in the industrialized world {CPUC Comment Letter}.

This issue represents much more than just another restrictive policy or burden to business. It exemplifies an evolving and ongoing struggle for fairness or merit on harmful exactions impacting economic or even physical viability from a regulatory body.

I will be providing testimony on behalf of MCAR and its membership at tomorrow’s workshop in Sacramento during public comment. The workshop will be streamed online and should begin around 1:00 pm. You can access the feed by clicking here. I have also included the link to MCAR’s comment letter which can be accessed by clicking here.

Upon conclusion of tomorrow’s workshop, we should have a much stronger understanding of how this issue could evolve in regards to mandatory reductions. I will provide an update on Thursday of this week to summarize the day’s events and let you know what is (or could be) in store for all of us.

]]> http://mcarforum.com/2009/09/water-update-part-2/feed/ 1 http://mcarforum.com/2009/08/start-house-hunting-now-to-qualify-for-tax-credit/ http://mcarforum.com/2009/08/start-house-hunting-now-to-qualify-for-tax-credit/#comments Fri, 28 Aug 2009 23:00:53 +0000 kevin http://mcarforum.com/?p=181

First-time homebuyers—those who have not owned a home for at least three years—may be eligible for the

$8,000 federal tax credit, but the window of opportunity is closing rapidly. To qualify for the credit, the buyer

must close escrow by midnight on Nov. 30, when the tax credit expires. Buyers hoping to take advantage of

this benefit are advised to start house-hunting early, as the buying and lending processes takes time.

KEEP THIS IN MIND

• Finding the right house can take some time, so REALTORS® recommend home buyers start

looking for a home as soon as they are able and ready to purchase. Buyers also should build in

extra time to accommodate the lending process, which is taking approximately two weeks longer to

process this year compared with last year.

• The tax credit is equal to 10 percent of the purchase price, up to $8,000, subject to income limits.

Single taxpayers are eligible if their modified adjusted gross income is $75,000 or less, while

married taxpayers filing jointly must have a modified adjusted gross income of $150,000 or less.

• Only primary residences are eligible for the federal tax credit, including new or existing single-family

homes, townhouses, condominiums, manufactured homes, custom homes, and houseboats.

Vacation homes and investment properties do not qualify.

• Purchases must be arm’s-length transactions, meaning the seller cannot be the buyer’s parent,

grandparent, child, grandchild or spouse.

• Married people filing as such cannot claim the credit if either spouse has owned a primary

residence within the last three years. However, unmarried joint purchasers may allocate the credit

in any way they see fit, as long as it does not exceed the $8,000 maximum.

• The government will allow those who finance their purchases with a federally insured loan to apply

their anticipated credit immediately toward closing costs or as additional down payment, rather than

waiting until they file their 2009 taxes to receive the refund.

Contact a local REALTOR® today for more information on the first time homebuyers tax credit and other housing opportunities that might be available to you.

Leslie Appleton-Young is Vice President and Chief Economist for the California Association of REALTORS® (C.A.R.), a statewide trade organization with almost 175,000 members dedicated to the advancement of professionalism in real estate.

Mrs. Appleton-Young directs the activities of the Association’s Member Information Group.  She oversees the analysis of housing market and brokerage industry trends, member communications, and membership development activities.  She is also closely involved in the Association’s strategic planning efforts and is a well-known speaker in California’s real estate community.

Before joining C.A.R. in 1984, Leslie Appleton-Young was a consultant with Telesis Inc. in Rhode Island.  She also spent several years working as a research associate at the Federal Reserve Bank of Philadelphia and as an instructor at the University of Pennsylvania.

Mrs. Appleton-Young earned a Bachelor of Arts degree in economics from the University of California, Berkeley, and her Masters from the University of Pennsylvania.

Mr. Singer’s presentation highlights a number of national, statewide and local real estate issues that are shaping the dynamic market environment of today.

For those looking for a resource on what is currently happening in the industry and what things we might expect in the future, Joel’s presentation is a must read and is available for download here.

It’s no secret that foreclosures have been on the rise for the past number of months. It’s unfortunate, though almost predictable, that with this escalation individuals looking to exploit the impacted homeowner emerge from almost every vantage point. So-called “foreclosure rescue companies” attest to the ability to rescue you from foreclosure but, in the end, are simply out for an ill-gotten-gain. Listed are a few things to watch out for with regard to these scams:

• Asks for money upfront prior to providing any type of service

• Instructs you not to contact your lender, lawyer, housing counselor, family, friends or others

• Asks for mortgage payments to be made directly to his or her company or a bank account set up by that person, rather than your lender

• Promises to stop the foreclosure process, no matter the circumstances

• Advises you to transfer your property deed or title to his or her company

• Encourages you to lease your house and buy it back over time
  

• Offers to buy your house for a fixed price that is not set by the housing market at the time of sale
  

If you have found yourself facing the unfortunate situation of falling behind on payments and are looking for answers, there are a variety of effective resources at your disposal. One of which is the Housing Resource Center of Monterey County (HRC), formerly known as “MOCHA”.

A non-profit corporation, HRC is a comprehensive one-stop center for homeownership opportunities, rental information, credit counseling services and housing education. HRC’s commitment to effective community service is unyielding and supported by an intelligent and capable staff. While numerous loans have been modified for Monterey County homeowners, attendance at an HRC Mortgage Foreclosure Prevention Workshop is required prior to private counseling services. For more information and to schedule a seat at an upcoming workshop, call HRC at (831) 424-9186.

Other legitimate resources:

• Dept. of Housing & Urban Development (HUD) www.hud.gov
  
• California Dept. of Real Estate (DRE) www.dre.ca.gov

By Paul D. Gullion, Attorney at Law

QUESTION: I am selling my house, and it needs lots of repairs that I don’t want to pay for. So I am just going to sell my house “as-is” and not tell the buyer? That’s OK, right?

ANSWER: No, and I would like to explain why (remember, you are talking to a lawyer and we simply cannot say yes or no).

QUESTION: I knew this wouldn’t be simple, but tell me why?

ANSWER: Saying that you are selling your house in its “as-is” condition DOES NOT RELIEVE YOU OF YOUR OBLIGATION TO MAKE ALL LEGALLY REQUIRED DISCLOSURES ABOUT YOUR HOUSE TO POTENTIAL BUYERS. You still have to comply with these legal requirements whether you use the phrase “as-is” or not.

QUESTION: OK, so what are these disclosures?

ANSWER: There are two general disclosures, and a variety of specific disclosures. Let us focus on the general ones first. When you sell your house, you are required in almost all instances to complete a Transfer Disclosure Statement. This document requires you to disclose all you know about your house, and if you don’t fill it out completely and honestly you can get into trouble (in other words a lawsuit). The other general disclosure is mandated by Court cases, and it requires that you disclose all facts that would have a material influence on someone’s desire to buy your property, or an impact on the value of your house.

QUESTION: But if I tell buyers about my house, they may not want to buy it?

ANSWER: Remember something I learned a long time ago: everything about a house will eventually be known by the buyer, and it is better that the buyer knows before escrow closes than afterwards. If the buyer finds out the true condition of the house after escrow closes you could be sued, and pay lots of money to an attorney to defend you.

QUESTION: You mentioned specific disclosures. What are those?

ANSWER: California has laws that require the disclosure of such things as natural hazard zones, the existence of lead based paint and smoke detectors, water heating bracing, the availability of the Megan’s Law database, earthquake issues, the proximity of the house to military ordinance and industrial zoning. The list goes on. If your house is in a homeowners’ association, additional disclosures must be made.

QUESTION: Well, now that you have taken all of the fun out of selling my house, how do I go about making sure I have made all disclosures?

ANSWER: The best way to make sure that you comply with the disclosure requirements in California (and to make sure your sale goes as smoothly as possible) is to use a qualified real estate agent who can guide you through this and the other issues that arise in a real estate transaction.

QUESTION: Well does “as-is” mean anything in California?

ANSWER: “As-is” does still have legal meaning in a California real estate transaction. In California today, “as-is” means this: I will sell my house in its “as-is” condition after I have made all required disclosures, and by selling it “as-is” I am saying that I am not going to pay for any repairs to the house.

QUESTION: So I am telling the buyer: “Here is my house, here are my disclosures, and if anything needs repair you, the buyer, pay for it.”

ANSWER: Right, it becomes at that point a matter of negotiation with the buyer. Usually what happens is that the buyer will come back with a counter offer asking you to pay for some items. You are free to say no and move on, or to negotiate with the buyer so that you can sell your house.

In my next article, I want to talk about how these rules come into play when a lender sells a house it got through a foreclosure.

THE INFORMATION PRESENTED IN THIS ARTICLE IS BELIEVED TO BE ACCURATE AS OF THE DATE OF PUBLICATION. IT IS INTENDED TO PROVIDE GENERAL ANSWERS TO QUESTIONS, AND IS NOT INTENDED AS A SUBSTITUTE FOR INDIVIDUAL LEGAL ADVICE. ADVICE IN SPECIFIC SITUATIONS MAY DIFFER DEPENDING UPON A WIDE VARIETY OF FACTORS. THEREFORE, IF YOU HAVE SPECIFIC LEGAL QUESTIONS YOU SHOULD SEEK THE ADVICE OF AN ATTORNEY OF YOUR CHOICE.

By Paul D. Gullion

QUESTION: I am going to be hiring a company to do a job at my house. What are the steps I should take to avoid liability?

ANSWER: There are several legal issues involved in hiring people to work on your property, and certain steps should be taken to protect yourself.

QUESTION: What should I do?

ANSWER: First, you should make sure that, if required, the company doing the work has a current, valid license issued by the State of California. Each type of work has a specific type of licensing requirement, and these requirements can be found on the internet, or you can call the local State Contractor’s License Board.

QUESTION: What about insurance?

ANSWER: You must be sure to require that the company doing the work for you has a policy of liability insurance that will provide protection should someone get hurt or property is damaged. Ask for proof of the insurance, and check the amount of insurance and the dates that the policy is effective. Make sure the policy provides that it will not be cancelled without advance notice to you. On bigger projects that involve more dangerous activities (roofing, tree cutting, and demolition, as examples) you probably should talk with your own carrier and get their advice on what to require. Proper insurance is critical to giving some peace of mind during the project. Make sure the company has it and it protects you.

QUESTION: What if the company uses employees?

ANSWER: If the person doing the work is using employees, you must make sure that proper workers’ compensation insurance is in place protecting those workers. This is required by law, and cannot be avoided. Ask the company doing the work for you to provide a current proof of insurance with the dates of effectiveness. Don’t take any excuses from the company if they fail to provide proof of workers’ compensation coverage. If it is not in place, you could be liable for injuries to the employees.

QUESTION: Is there anything else I can do to protect myself?

ANSWER: Yes. You should have some form of a written agreement between yourself and the company doing the work. The complexity of that agreement will depend on the size and cost of the project, but any agreement should set forth the price for the work, how changes are to be handled, the insurance requirements of the company doing the work, when the work is to be completed and a statement that the company is an independent contractor and that you are not responsible for payroll or withholding taxes, etc. Make all payments by check to the company. Do not pay employees directly (especially in cash), and don’t pay suppliers directly. Work though the company you hire in making all payments.

QUESTION: If I do all of this am I totally protected?

ANSWER: No, there are no guarantees under the law. However, if you take these steps you have protected yourself as much as is reasonably proper, and you will have a greater peace of mind.

QUESTION: Why is life getting so complicated?

ANSWER: Although the legal profession and the insurance industry, among others, are often blamed for complicating life, the fact is that California has a strong public policy of protecting workers who perform services for others. While none of us can predict the future, this issue is not going away, and is in fact getting more support from the Courts and legislature. Thus, take steps to protect yourself.

THE INFORMATION PRESENTED IN THIS ARTICLE IS BELIEVED TO BE ACCURATE AS OF THE DATE OF PUBLICATION. IT IS INTENDED TO PROVIDE GENERAL ANSWERS TO QUESTIONS, AND IS NOT INTENDED AS A SUBSTITUTE FOR INDIVIDUAL LEGAL ADVICE. ADVICE IN SPECIFIC SITUATIONS MAY DIFFER DEPENDING UPON A WIDE VARIETY OF FACTORS. THEREFORE, IF YOU HAVE SPECIFIC LEGAL QUESTIONS YOU SHOULD SEEK THE ADVICE OF AN ATTORNEY OF YOUR CHOICE.