The detector(s) must be installed in all homes with a fuel-fired heater ar appliance, a fireplace (both wood burning & gas log), or an attached garage.  Additionally, a CO detector must be installed within 15 feet of the entrance to each room lawfully used for sleeping.   The installation may be at ceiling height as well as pluged in above a baseboard.  All hardwired and plug-in detectors should have a battery backup.

CO detectors are a great idea, but I’m sure more lives are saved by smoke alarms, that ironically are not required for a real estate sale.

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While real estate Title insurance policies will not insure water rights or water usage, the ownership of water rights is decided through the water courts.   Nonetheless, a through overview and knowledge of how water is distributed in the west can eliminate potential problems on the part of a potential land buyer.

A HISTORY OF WATER RIGHTS

Originally in the United States, the English doctrine of water law was applied.  English water law held that an owner of riparian land had the right to the natural flow of water past, over, across, or under his land for domestic use.( Riparian means belonging to or relating to a watercourse, which is defined as a natural stream having a definite bed or banks, that flows on a regular basis)

PRIOR APPROPRIATION

The prior appropriation doctrine, or “first in time – first in right”, developed in the western United States in response to the scarcity of water in the region. The doctrine evolved during the California gold rush when miners in California needed to divert water from the stream to locations where it was needed to process ore. Customs and principles relating to water diversion developed in the mining camps, and disputes were resolved by simple priority rule. According to the rules of prior appropriation, the right to the full volume of water “related back” or had the priority date as of the time of first diverting the water and putting it to beneficial use. In other words, those with earliest priority dates have the right to the use of that amount of water over others with later priority dates.

Unlike a riparian right, an appropriative right exists without regard to the relationship between the land and water. An appropriative right is generally based upon physical control and beneficial use of the water. These rights are entitlements to a specific amount of water, for a specified use, at a specific location with a definite date of priority. An appropriative right depends upon continued use of the water and may be lost through non-use. Unlike riparian rights, these rights can generally be sold or transferred, and long-term storage is not only permissible but common. 

The first to use water (the senior appropriator) acquires the right (known as a priority) to its future use against later users (junior appropriators).  The first appropriator on a water source has the right to use all the water in the system necessary to fulfill his water right. A junior appropriator cannot use water to satisfy his water right if it will injure the senior appropriator. A senior appropriator may “place a call” on the river. A call requires that the institution which manages the water source shut down a junior diverter in order to satisfy the senior right. Senior appropriators, however, cannot change any component of the water right if it will injure a junior appropriator. Therefore, if a senior wants to change his place of use and this change will adversely affect a junior’s interest, the junior can stop the senior from changing the water right. Any change of a water right (time of use, place of use, purpose of use, point of diversion, etc.) cannot cause harm to another water user, regardless of priority.

WATER RIGHTS

For a water right to be created, an appropriation must first be made.  The required elements of an appropriation are the diversion of water ( usually made by removing water from its natural course or location), and the application to a beneficial use ( irrigation, mining, domestic use, for example).  Water rights can fall into two different types; storage and direct flow.  A storage water right is measured in terms of volume (usually acre-feet) and direct flow is measured by a rate of flow (usually cubic feet/sec).

The granting of a water right is the responsibility of the state agency, state engineer or official charged with the administration of water resources.  Along with the approval process, the responsible agency is responsible for the enforcement of the priority system of allocation.

-Jerry Hart

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First time home buyers make up a whopping 41% of all home purchasers.

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While Banks and Savings and Loan institutions nationwide have been busy lining up to the public trough for bailout funds, another institution has been busy writing home mortgages, your neighborhood credit union!  Surprised?  Don’t be, since credit unions have been writing home mortgages for years- they just have a different business model than the big boys.

Credit unions are non-profits that exist to make money, just not profit.  Their basic business plan is simple: credit unions receive deposits, and use that money to make loans.  They then charge more on those loans than is paid on deposits. Ta-Da!  A business that thrives.   And of course, they are very conservative when it comes to their lending standards.  Subprime and option ARM mortgages have never been in their portfolios, nor did they sell and repackage loans as investments on the secondary market.

What credit unions did do is loan only to credit worthy members on mortgages that truly were not greater than what the member could afford.  They also did this without creating fraudulent applications and wildly inflated appraisals-just like banks used to do in the old days!

Joining a credit union is generally based on membership requirements such as living in a certain area, working for a particular employer or industry, or belonging to a certain group.  The largest advantage of credit union membership is that loan rates are lower and returns are greater on savings and CD’s than usually found at banks.  Unlike banks, credit unions are member owned with excess earnings either passed back to members in the form of lower rates, greater earnings, or shares paid.

They hold most loans to maturity, and fewer than 1% of credit union mortgages are 60 or more days late according to the Credit Union National Administration (CUNA).  While their mortgage business is a fraction of that of other mortgage lenders, credit union originations increased 10% in the first 6 months of 2008 (according to CUNA), while mainstream lender originations dropped 18% during the same period as reported by the Mortgage Bankers Assn.

Not surprising, with car sales down and the difficulty dealers are having arranging financing, especially for the used car market, credit unions are more than willing to once again step up to the plate to assist.  As a result, credit union membership is growing by leaps and bounds, all thanks to sound business practices.

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Homeowners Disclosure

With the passage of SB100, Colorado statues now require that every Homeowners Association in the state deliver at least annually, within 90 days following the end of each fiscal year, the following information to all owners upon reasonable notice:

• The date upon which the  fiscal year commences and the operating budget for the current fiscal year.
• A list, by unit type of the owner’s current assessment, including both regular and special assessments.
• Its annual financial statements, the results of any audits, and a list of all Association insurance policies.
• The Association’s bylaws, articles, and rules and regulations.
• All minutes of the executive board and member meetings for the fiscal year preceding the current annual disclosure.
• The Association’s responsible governance policies

This information must be readily available at no cost to the owners at their convenience.  Availability means it may be published on a web page as long as an accompanying notice is sent via first class or e-mail; it can be maintained as part of literature table or binder at the Association’s place of business; or it may be mailed or personally delivered to the homeowners.  The cost of any distribution is to be accounted for as a common expense liability.

Home Buyer Disclosure by Seller

SB 100 states that, except in the case of a foreclosure sale, the seller of a property in a common-interest community must mail or deliver to the purchaser the most current copies of the following documents:

1. the bylaws and rules on the Association;
2. the covenants;
3. the Association’s operating budget;
4. the declaration;
5. the association’s annual income and expenditures statement;
6. minutes from the most recent annual owner’s meeting and any executive board meetings that occurred within the six months immediately preceding the title deadline; and
7. the Association’s balance sheet.

This law requires the seller to provide the outlined HOA information to the buyer by title deadline, or, in the case of a for sale by owner, no later than 10 days prior to closing.

The new law states also that “written notice of any unsatisfactory provision in any of the documents listed above shall be cause for termination of the contract, if signed by the buyer or on the buyer’s behalf and given to the seller on or before the governing documents deadline.”  Time share units are not included in these requirements.

HOA Responsibility

The association must use its best efforts to accommodate a seller request for documents.  The Association may charge a reasonable fee, not to exceed the Associations actual cost per page, and must make documents available within 5 days of receipt of notice.

Disclosure Documents/ Receipt of Documents

Additionally, the seller must provide the buyer with a disclosure statement in bold-faced type.  It is the seller’s responsibility to obtain from the purchaser a signed acknowledgement of receipt of this information and disclosure statement at closing. This signed form must also be sent to the HOA in a reasonable time frame.

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The full 2008-2009 report will be available in December, but here are some early observations. Like last year’s report exterior remodeling projects lead the pack for recovery on dollars spent.  In fact those projects that boost curb appeal give you the greatest chance for recouping money spent, and still compare well with kitchen remodels.

From a national level here is what you can expect, showing expected recovery:

·        Upscale fiber cement siding (86.7%)

·        Midrange wood deck (81.8%)

·        Midrange vinyl siding (80.7%)

·        Upscale foam backed vinyl siding (80.4%)

·        Midscale minor kitchen remodel (79.5%)

·        Upscale vinyl window replacement (79.2%)

·        Midrange wood window replacement (77.7%)

·        Midrange vinyl window replacement (77.2%)

·        Upscale wood window replacement (76.5%)

·        Midrange major kitchen remodel (76.0%)

Home owners often wonder where their money will be safest during a sour financial market and as it has always been, investing in your home always pays off!  These numbers reflect a payback upon sale one year after the remodel, and are only averages. If you provide most of your labor the recovery will be even stronger

Many regions, the west coast in particular, often see recovery greater than 100%, while on the flip side Midwestern cities such as Cleveland, Chicago, and Milwaukee have some of the lowest recovery numbers.

Does it make sense to perform a major remodel just prior to a home sale?  Depends.  If the cost recovery is less than 100%, not really.  If your work will actually produce a gain, or a sale at a reasonable price is being hampered due to the lack of the project, then it may be to your advantage to proceed.  Your best direction is to always consult a Realtor to assist with which path to take.

Jerry Hart                                                                  Check out Denver Real Estate here

The Background

One benefit of the Housing and Economic Recovery Act passed in July of this year is that qualified homebuyers may receive a one time tax credit of up to $7,500.  With the intent of stimulating the economy and encouraging Buyers to get off the fence, this credit is limited to first time buyers (those that have not owned a home in the past 3 years) and is set at a percentage of the home purchase price, 10%, and not to exceed $7,500.  This credit applies to all residential sales between 4/9/2008 and 7/1/2009.  Buyers can take this credit in 2009 for homes purchased in 2008; 2009 purchases can take the credit in 2010.

The Problem

The federal government requires the credit to be paid back on each year’s tax return beginning in 2011 in small 6.67% increments over 15 years, or about $500 a year for the full $7,500 credit.  This amounts to an interest free loan from Uncle Sam!  How could you possibly go wrong?

The best strategy would be to take the $7,500 (in the form of a refund or the reduced tax paid amount) and put it a safe investment.  Currently the stock market may not be your best choice-think money market or CD.  The rest of this post now refers to the 98% of buyers not following this advice!

Human nature being what it is, most buyers will pocket the credit and spend it on something which is an excellent way to jump start the economy.  Remember that this will have to be repaid each year or until the home is sold.  This is where the problem may begin.  You see, when the home is sold the remaining tax credit still due must be repaid in full, upon closing.  Assuming the buyer sells after 5 years (a not unrealistic time frame), and having made three years of repayment of the credit, the buyer will have $6,000 less equity upon sale.  No problem you say, what’s $6000?  In a declining or flat market it may be the difference between walking away with a little cash or being upside down if the purchase was done with 97 to 100% financing.  The current national housing market is depressed.  When will the market rebound(which it eventually always does) and begin positive appreciation gains?  That is the $64 question.  The choice is up to each buyer to determine if taking the tax credit will be in their best interest.

On a positive note, the National Association of Realtors® asked Congress to do away with the repayment provision of the tax credit to all buyers, not just first time buyers.  The proposals were part of a four point housing stimulus plan submitted in October by the association.  I would doubt Congress will take any action prior to the new administration taking office in 2009. 

Jerry Hart                                         Check out Denver Real Estate here