2011 August Archive - Combs Law Group

Arizona Association of REALTORS Legal Hotline Almost 25 Years Later

Combs Law Group has had a contract with the Arizona Association of REALTORS® (“AAR”) to administer the Hotline program since March 1, 1988. This program has been available to all Arizona Realtors® since Chris Combs took the first Hotline call. From 1988 to 2011 there have been at least 50,000 Hotline calls from Hotline members; at least 20,000 letters, faxes, and emails by Combs Law Group to Hotline members; and at least 1,000 Hotline questions and answers from Combs Law Group published in the monthly Arizona REALTOR® Digest. The success of the AAR Legal Hotline program served as a model for Hotline programs in Minnesota and Colorado.

Every two years AAR surveys their membership about the Hotline program. Combs Law Group has consistently received high marks from the AAR membership. For example, in the last 2011 survey, more than 93% of the AAR membership voted the Hotline program excellent (65.5%) or good (27.6%). Less than 3% of the AAR membership said that the Hotline program was fair or poor.

AAR has now decided to go in a new direction, however, and after next month a new law firm will administer the Hotline program.

Combs Law Group would like to say thank you to all of the Hotline members who have called on the Hotline in the last 24 years who have uniformly been courteous and pleasant. A great group of people representing the finest in the REALTOR profession. Carolyn Curtis in Safford; Angela Antilla in Globe; Sandy Griffin in Yuma; J.T. Tsighis, John Hamner, and Mark Shinn in Tucson; and Marge Lindsay, Bob Stephens, Heidi Quigley, Jim Amdahl, and Rol Johnson in the Phoenix area are just some of the many wonderful Realtors who have called on the Hotline through the years.

Finally, thanks for the opportunity and the pleasure to work in the last 24 years with dynamic AAR leadership such as Ty Strout, Alice Martin, and Barbara Freestone.

Note: Combs Law Group remains focused on commercial and residential real estate transactions and disputes, bankruptcy, probate/estate planning, and general business law.

In addition, Combs School of Real Estate offers continuing education classes for REALTORS®. Aaron Green, Ben Skinner and Adam Martinez are excellent instructors with the experience of answering 1000′s of Hotline calls and emails.

Arizona Real Estate Still a Good Investment Even in Market Today

Question: Next year, our son will be graduating from Arizona State University. He recently told me that he has borrowed $40,000 in student loans for down payments to purchase three homes in a Queen Creek subdivision, in the past year. He is saying that in the next three to five years home values will appreciate rapidly, and that he should then be able to make over $100,000 on the sale of these three homes. I know that student loans are not dischargeable in bankruptcy, and I am concerned that he may have gotten himself in a financial mess. Is it realistic for my son to expect that the values of Arizona real estate and these three homes will appreciate rapidly in the next three to five years?

Answer: According to a Case-Shiller study the value of homes in the 100 years from 1900 to 2000 increased by 3.35% per year, just a little better than the rate of inflation. In other words, if your son bought a $100,000 home today, based on the historical 3.35% annual increase in home values, the home after three to five years would be worth $110,000 to $120,000. In light of a seller’s normal payment of 8 to 10% for closing costs such as broker’s commissions and title insurance, your son’s profits would be minimal, if any. However, home ownership today is a better investment than home ownership has been historically. Homeowners today who live in their home have tax deductions for mortgage interest and real property taxes, and since a 1997 federal tax law generally pay no tax on any gain on the sale of their home. In light of these tax advantages, and current low interest rates, values of homes, including your son’s three investment homes, should increase in the next three to five years greater than the historical 3.35% annual rate

Protection on Anti-Deficiency Statutes Available for Real Property “Utilized” as Home

Question: We purchased a small home with a mortgage loan a small home on Bethany Home road in Phoenix, five years ago. After the closing, we were able to change in the zoning of the home to permit my husband, who is a chiropractor, to convert the home into a small office building for his chiropractic practice. However, due to the poor economy my husband’s chiropractic practice has suffered, and our income is down considerably. In addition, we are now “underwater” at least $120,000 on the mortgage loan because of the declining property values in the area. We know from reading your columns that most homeowners are protected from any liability if the mortgage lender on home foreclosures. If the bank forecloses on my husband’s office building, will we have any liability for the $120,000 deficiency after the foreclosure?

Answer: Probably. The Arizona anti-deficiency statutes generally protect homeowners from any deficiency after a foreclosure only if the secured real property is “utilized” as a home. A.R.S. §33-814(G). Therefore, inasmuch as your mortgage loan is no longer secured by real property that is “utilized” as a home, you probably will have liability for the $120,000 deficiency after the foreclosure.

What is Tenant Lease Liability After Domestic Violence

Question: My sister and her boyfriend moved in together about 3 months ago. They signed a one-year lease to rent a Scottsdale condominium. Last week the boyfriend beat up my sister quite badly, and the police had to be called. My sister obviously no longer wants to live with him. However, there are nine months remaining on the lease, and my sister does not want to have to make lease payments on the Scottsdale condominium plus lease payments on her new apartment. According to Arizona landlord tenant law, will my sister be required to pay the remaining nine months of the lease on the Scottsdale condominium? Also, my sister paid $500 of the $1,000 security deposit. Will she be entitled to the return of her $500 portion of the $1,000 security deposit?

Answer: If your sister furnishes the landlord a copy of the police report, plus a notice requesting termination of the lease within thirty days, your sister should be able to avoid paying any rent after this time period. A.R.S. §33-1318. In addition, if the Scottsdale condominium is in good condition at the time your sister terminates the lease, your sister should be able to get a refund of her $500 portion of the $1,000 security deposit.

Landlord and Tenant Disputes Seminar

Combs School of Real Estate Presents:

Landlord-Tenant Disputes Seminar

What Every Property Manager Needs to Know

3-Hour ADRE-Approved CE in Real Estate Legal Issues

Thursday, August 18th

1:30 – 4:30

1:00-1:30 Check-In

Seminar Fee: $15 pre-register; $20 event day registration

REGISTER ON-LINE

Location:

3200 E. Camelback Rd.; Phoenix

North American Title

Community Room

SEMINAR HIGHLIGHTS

Landlord-Tenant Law

Arizona Residential Landlord Tenant Act
Commercial Statutes
Common Law

Landlord Obligations and Tenant Remedies

Security Deposits
Disclosures
ProtectingTenants After Foreclosure

Tenant Obligations and Landlord Remedies

5-Day Cure Notice
Damages to the Property
Abandoned Personal Property

Eviction

Property Management Statutes

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