Newsletters Protecting Your Real Estate

How are you protecting your Real Estate?
How to avoid builder defects
Homestead Exemptions

HOW ARE YOU PROTECTING YOUR REAL ESTATE?
There are many ways in which you can protect your property, one of which is the living trust. Anyone who has ever had to go through probate would attest to the problems that come along with not having a trust. A trust is simply an arrangement under which one person, a trustee, holds title to assets for another person, a beneficiary. When you set up a living trust, you become the grantor, and you only can make changes to the trust. You must name a trustee, which can be yourself, someone else, or a corporate entity such as a bank or trust company. You will also need to name a successor trustee to act as the executor of your living trust when you die. Upon your death, the successor trustee transfers your assets in the trust to the beneficiaries according to the terms that were set forth in the trust. Assets held in a living trust do not go through probate, so there are no court fees to pay and no public record of the value of your estate. Most attorneys suggest you have a will as a backup to a living trust, to specify where assets not in the trust will go.

In short, the reasons to put your real estate in a living trust are:
*Avoids probate and related costs
*Can facilitate the reduction or elimination of estate taxes
*Allows speedy distribution of assets to beneficiaries
*Preserves your privacy and is completely confidential
*Very difficult to protest
*Can be changed or canceled at any time (revocable)
*Relatively inexpensive and easy to set up and maintain.

HOW TO AVOID BUILDER DEFECTS
It has been estimated that 15% of all new homes sold every year have serious defects such a moisture intrusion (mold), faulty foundation, and shoddy framing. That is as many as 150,000 homes every year nationally. The rise in builder defect lawsuits has been blamed on everything from greedy attorneys to demands on builders to keep costs down causing the use of poor materials or craftsmanship. Whatever the reason, it can be a serious problem if you aren't paying attention. New homes aren't the only culprit, homes as old as five to ten years can have problems that don't show up for years. There are things that the buyer can watch for the help them from getting into a problem property:

1. Deep cracks in the foundation.
2. Sagging floors or leaning walls.
3. Large cracks in interior walls or gaping cracks in stucco exterior.
4. Windows and doors that don't close properly.
5. Water damage.
6. Switched hot and cold water.
7. Extensive heating or cooling bills.
8. Shorting or dead electrical sockets.
9. Sewer or drain backups

Even though builders offer a home warranty, only a few states regulate the programs or require the builder to post bond to secure performance, and California is not one of them.

So…what can you do? Well… first of all, do a thorough inspection on the new homes prior to taking possession. With resale homes, be sure to hire a licensed inspector to thoroughly check the property from top to bottom. Make sure you read the seller's disclosure documents regarding any defects. Also, check to see if the builder or the development has any major complaints filed against it or any class-action suits that are in progress in the housing tract. If you already own the home, be sure to give the builder every opportunity to fix the problem, before enlisting an attorney. If you are currently selling, be sure to disclose every builder defect, no matter how silly you think it might be.

HOMESTEAD EXEMPTIONS
Recently I have had a few clients ask me about the Homestead Exemptions. I thought this would be a good forum to explain it….

The Assessor-County Clerks-Recorder's office has no authority or responsibility in this area, however, this voluntary exemption is a legal protection afforded homeowners under statutory law. This information is for general purposes only.

The homestead exemption is a statutory protection whereby a homeowner's equity in his or her residence may be protected from judgments, liens and creditors.

If a court has ordered the sale of a home to satisfy a judgment, a certain amount of the equity may be protected and retained by the homeowner. The amount protected is $50,000 for single homeowners, $75,000 for families, and $125,000 for seniors, disabled and low-income homeowners earning $15,000 or less annually. In order to qualify, a home must be the principal place of residence, and the homeowner may have only one exemption at a time.

In order to receive this exemption, you must record a Declaration of Homestead with the Assessor-County Clerk-Recorder. A Declaration of Homestead is a document that names the declared homestead owner, describes the homesteaded property and states that the property in the homestead owner's principal place of residence. "Homestead Declaration" forms are available online at the county website.

A homestead exemption will not prevent foreclosure by a lender, mechanic's liens, seizure and sale for back taxes, or to avoid paying child support or alimony.

For more information about the homestead exemption, contact your legal adviser, or refer to the California Code of Civil Procedure, Sections 704.910-704.995.

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