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| February/March 2011 |
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by Tracey L Daniels
First comes love, then comes marriage - or does the house come after love? More and more frequently, couples are moving in together and purchasing real estate without imminent plans to get married (or, with same sex couples, without a clear understanding of how their out-of-state marriage may affect property ownership). When a married couple gets divorced, the distribution of their marital property is governed by Domestic Relations law. But, what happens if unmarried property owners call it quits?
The answer depends on two things. The first is how the couple takes title to the property; the second is whether or not those couples have a written agreement regarding their rights and obligations in the event of a break-up. To understand the issues that such an agreement should address, it is necessary to understand the differences between the various types of co-tenancies.
Three Types of Co-Tenancy
In New York, unless stated otherwise, property conveyed to a husband and wife automatically creates a tenancy by the entirety; that is, each person has an undivided interest in the entire property. Each spouse has a right of survivorship and the property automatically passes to the surviving spouse.
Historically, the concept of a tenancy by the entirety derived from fact that a husband had exclusive control over his wife’s property, and thus the husband’s creditors had access to the whole property and not just a one-half interest. As various jurisdictions began to recognize property rights of women, the spouses’ interest in the property became sheltered so that a husband could no longer encumber the property without his wife’s consent and vice versa. New York Law states that neither spouse has the right to unilaterally encumber, convey or partition the property. A tenancy by the entirety may only be severed by agreement, divorce or death.
 Tenancy in common is the default form of ownership between two or more parties. Unless specifically stated otherwise, real property conveyed to an unmarried couple creates a tenancy in common in which each person has an undivided interest in the entire property, but with no right of survivorship. Upon death, a tenant in common’s interest will be part of his estate and pass to his heirs. Without a written agreement between the parties otherwise, a tenant in common can sell, mortgage or otherwise convey his ownership interest in the property. A tenant in common can also move to partition the property, having it physically subdivided or even sold. The proceeds would then be divided between the parties.
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As with tenants by the entirety, but in contrast to tenants in common, joint tenants do have a right of survivorship. In order to take title to property as joint tenants, the deed must clearly convey title to the parties as joint tenants. For example, the deed must specify that title is taken by A and B as joint tenants with right of survivorship. Upon the death of one joint tenant, ownership will pass to the survivor automatically and outside of the estate. Unmarried couples can hold title to real property as tenants in common or as joint tenants with a right of survivorship, but not as tenants by the entirety.
Joint tenants can unilaterally encumber and convey their property interest and the resulting tenancy is a tenancy in common. Like a tenant in common, a joint tenant may sever the tenancy by filing a petition to partition. When a court grants a partition action, the property is either physically broken into parts with each owner given a part of equal value, or the property is sold and the proceeds distributed equally regardless of contribution to purchase price.
Contracts That Define Rights
So how do unmarried couples protect themselves from the unilateral actions of their partners? Any couple, married or unmarried, traditional or same sex, has the ability to enter into a contract defining their rights and responsibilities towards each other. When a couple plans on marrying, that agreement is called a prenuptial agreement. Since the law is established on the rights to martial property in the event of a divorce, it is equally, if not more, important that unmarried couples enter into an agreement in which they specifically define their rights and obligations. Such an agreement must be in writing in order to be binding.
Before purchasing property, couples need to consider the "what-ifs". If they break up, will the property be sold? (The parties may want to consider designating up front an impartial third party to handle the valuation and sale of the property should it become necessary.) Will one party have a first right to buy out the other party? If one person stays, will the other party be compensated over time through rent-like payments, or will the selling party be paid in full? If there is a mortgage, will both parties remain obligated under the note or will the bank permit an assignment to one party and a release of the other? When working through the options, it is imperative that couples also receive counsel on the tax consequences of any future property transfer and structure their agreement to minimize tax exposure to both parties.
Nobody likes to focus on the possibility of a relationship ending and this is especially true when the parties are in the process of buying a condo, co-op or house together. It is important, however, to know that a carefully drafted agreement that contemplates the worst case scenario can save everyone time, money and, at least, some of the heartache if the couple does break up.
Source: Realty Times |
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By: Chris Mygatt
The financial markets continued to improve over the past few weeks with both the Dow Jones Industrial Average and the S&P 500 reaching and surpassing two key milestones. The Dow eclipsed the 12,000 threshold and the S&P climbed over the 1300 level for the first time in two and a half years. Both milestones are viewed by market watchers as important barometers, not only of the health of Wall Street but consumer sentiment on Main Street.
Steady improvement in the financial markets is putting the Great Recession even farther behind us. It means that retirement accounts for millions of Americans have erased much of the losses inflicted by the sharp downturns of 2008 and early 2009. Two years ago next month the Dow stood at 6,547 and the S&P at 676. Since then, they’ve nearly doubled in value. It’s an encouraging signal that the economic recovery is gaining traction, albeit slower than most of us would like.
So what about the real estate market? In general, the nation’s housing market remains fragile. While there has been improvements in many communities since the depths of the recession, including here in the Denver Metro area, the market overall continues to be challenged by high unemployment rates and the shadow inventory of additional homes that could fall into short sales or foreclosures.
While acknowledging all of the economic headwinds, Rick Newman, chief business correspondent for U.S. News and World Report, wrote this week that the stage could be set for a solid recovery in the housing market this year. “A buzzer won't go off when it happens, but 2011 could be the year that the housing bust officially ends,” he said. |
Nationwide, prices have fallen by about 30 percent since the peak in 2006, and Moody's Analytics thinks they could fall another 5 percent or so in 2011. “But improvements in the overall economy will lift the housing market sooner or later, with many buyers who have been sitting on the sidelines finally deciding to take the plunge,” Newman writes. “In a few markets, that already appears to be happening.”
U.S. News says home buyers are tiptoeing back into the market, amid an increasing number of signs that the fifth year of the housing bust might be the last. “Economists are watching closely for an inflection point at which the housing market turns upward for good. But for buyers planning to live in a home for years, precise timing matters less because they also need to take into account the direction of interest rates and their own personal need for housing,” Newman said.
“With flippers and speculators largely out of business, most buyers simply want to know that the home they buy won't plunge in value once they own it. In many U.S. cities, that now looks to be the case,” he adds.
U.S. News points to four reasons that home buyers may be feeling more confident that it's safe to step off the sidelines:
• In some markets, homes are now undervalued. According to the Case-Shiller home-price index, overall prices nationwide have fallen 30.3 percent since peaking in 2006. Moody's, for instance, says that homes are undervalued in many cities, based on the ratio of home prices to median income.
• Affordability is excellent. Falling prices, plus falling interest rates, have made homes more affordable than they've been in decades. The National Association of Realtors' affordability index, which goes |
back to 1970, is at the highest level it's ever been. The typical family today needs to spend just 13 percent of its monthly income to pay the mortgage on a median-priced home, compared with nearly 25 percent at the peak of the housing bubble.
• Economic factors that affect housing are improving. Most economists believe the recession is over for good, with the risk of a double-dip fading rapidly. Consumers are spending again, and the economy is growing. Big companies have lots of cash and are in a good position to hire once business picks up. A rally in the financial markets is helping many Americans recover some of the wealth they've lost through falling home values. Those trends all support increased higher demand for homes.
• The government will continue to support housing. There will likely be continued political debate over Fannie Mae and Freddie Mac, the troubled housing agencies now operating under government control. But despite some calls for a private system to finance housing, it's likely the government will remain a key player in the mortgage market until at least 2013, after the next presidential election. And once policymakers figure out how to replace Fannie and Freddie, it will probably happen slowly, so as not to upset the housing recovery.
While it’s still too early to tell for sure where we are in the recovery, anecdotal reports from our field offices tell us that things are gradually moving in the right direction. Buyers are easing back into the housing market in many Colorado communities. As we approach the spring buying season it will be interesting to see how this translates into sales. While it’s still too early to tell for sure where we are in the recovery, anecdotal reports from our field offices tell us that things are gradually moving in the right direction. Buyers are easing back into the housing market in many Colorado communities. As we approach the spring buying season it will be interesting to see how this translates into sales. |
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Luxury home sales in the Denver metro area jumped sharply in December compared to a year ago as the luxury market gained momentum heading into the new year, according to a report released today by Coldwell Banker Residential Brokerage.
A total of 51 homes sold for more than $1 million in the Denver Area in December, up 54.5 percent from the 33 that changed hands in December 2009. Sales were also up nearly 16 percent from November. Independent broker Gary Bauer released a report last week, showing a similar trend. Both Coldwell Banker and Bauer used data from Metrolist, publisher of the Multiple Listing Service.
The median sale price of million-dollar homes edged higher in December from November, reaching $1.25 million, up from $1.23 million the previous month, according to Coldwell Banker. However, the median was down 7.4 percent from last year's level of $1.35 million. |
Rich buyers bullish
"There definitely has been a lot more optimism in the market lately," said Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado. "High-end buyers are starting to feel more confident about the economic recovery, both in the U.S. and here in the Denver area."
Mygatt added that buyers in general are realizing that there are unusually good opportunities in the market. "This is a rare situation where you still have interest rates near record low levels at the same time that home prices are extremely affordable and inventory is plentiful. I think buyers understand that these conditions won't last forever, especially as the economy gains momentum."
Source: CB Agent Info |
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How Smoke Alarms May Save Lives
By: Diana Rodriguez
A smoke alarm can save lives, but it must be used properly for the best fire safety. Install smoke alarms throughout your home, and check batteries regularly.
By the time flames are roaring through a house, it may be too late to stop the fire. Even worse, it may be too late to safely get your family out of your burning home. Fires can start and spread quickly, often while you're asleep. So to protect yourself and your family from fires, install a smoke alarm in every crucial area of your home.
Buying a Smoke Alarm
A smoke alarm, also called a smoke detector, can sense a fire early on and warn a family of impending danger before tragedy strikes.
Smoke alarms are sold at hardware and home improvement stores, and even some supermarkets. You might even be able to get a free smoke alarm from your local fire department.
You can buy a smoke alarm that runs only on battery power or one that is wired into the electrical system of your house and runs on electricity with a battery backup. Above all, each smoke alarm you buy must carry the UL (Underwriters Laboratories) label on it.
There are three types of smoke alarms on the market:
Ionization smoke alarm. This alarm detects big, open flames.
Photoelectric smoke alarm. This alarm detects a smoky fire that's smoldering, before any big flames get started.
Dual sensor smoke alarm. This is a combination smoke alarm that detects both types of fires.
You should have both an ionization and a photoelectric smoke alarm, or a dual sensor smoke alarm. And, remember, you will need smoke alarms at multiple sites throughout your home.
Installing a Smoke Alarm
A smoke alarm tucked in a far corner of your home might not detect smoke from the opposite end of the house until it's too late. So it's important to install a smoke alarm on each floor of your home — don't forget your basement — and at strategic areas on each level if you have a lot of square footage. Install a smoke detector |
Don’t install your fire alarm:
 Near a window
Just above the stove where steam is likely to set it off
Near a fireplace
On the ceiling right next to a wall
On the wall right next to the ceiling
Above doors or heating and cooling ducts
You will need an electrician to install a hard-wired smoke detector that runs on electricity, but installing a battery-powered smoke alarm is pretty simple. Most battery-operated smoke alarms can be attached to the wall using a regular screwdriver. Some even come with an adhesive pad that affixes the smoke alarm to the wall for you.
Maintaining a Smoke Alarm
Once your smoke alarms are properly installed, you need to test them regularly to make sure they’re working. Here are some tips to test and maintain each smoke alarm:
Each month, test your smoke alarms by pushing the test button — make sure you hear the alarm sound; always test the batteries in your wired smoke alarms, too, to know that they’re working as a backup.
Replace the batteries in your smoke alarm if it makes a light beeping noise — this signals that the batteries are running out.
Keep smoke alarms clean and free of dust, dirt, and debris with regular dusting or a light vacuum with the hose attachment. This will allow air to circulate in the device, providing you with better results, earlier detection, and superior fire safety.
Replace the smoke alarm unit every 8 to 10 years.
If your smoke alarm goes off while cooking dinner, fan smoke away from the device; don't disable it.
You'll need to change the batteries in your smoke alarm at least once each year. Pick a time that's easy for you to remember and stick to it. Many people like to change the batteries in their smoke alarms when daylight savings ends each fall. You could also choose a holiday or a birthday.
Remember to perform this regular maintenance — statistics show that while more than 90 percent of homes have smoke alarms, half may not be working because of missing or dead batteries. And if smoke alarms aren’t working, they can’t help save a life.
Source: Everyday Health |
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Your spring cleaning may never become effortless, but you can make the project more manageable -- and even enjoyable. This printable checklist offers an overview of everything you need to know -- including information on cleansers, stain removal, fabric care, and storage -- to zip through the process and arrive at a happy end.