When there are homeowners association (HOA) and/or condominium documents to be accepted as part of a real estate sale, the buyer's agent has a special responsibility to make sure that the buyer receives them and understands the provisions. That means that the buyer's agent must follow up to ensure the documents are delivered in ample time before settlement, and to explain the buyer's options to consider before signing off on documents. Sometimes an analysis of the documents uncovers a major drawback for the purchaser, and he or she might opt to cancel it. But, if the buyer doesn't receive the documents, or if he or she sees them for the first time at (or after) settlement, then no reasonable analysis can occur. So, even if the seller forwards the documents directly to the buyer without any agent involvement, it is still the responsibility of the buyer's agent to follow up with his or her client. Also, it would behoove a seller's agent to make sure that his or her client (the seller) delivers the documents and/or is thoroughly advised of the consequences if he or she delays in delivering the documents or provides incorrect documents.

In the wake of severe weather events like Hurricane Sandy, consumers tend to ask real estate agents and brokers for home improvement referrals much more frequently, since they are eager to recover from unanticipated damage. Plus, they tend to be more susceptible to the claims of unscrupulous contractors who often follow storms in order to prey upon unsuspecting homeowners.

Please remember your professional duty as a licensee to check a home-related contractor's Maryland license before you endorse his or her services. Even if you have known the home improvement contractor, plumber, electrician, or HVACR technician for years, you can't be absolutely certain that his or her license is current unless you inquire with the occupational board that governs the license. If the license has not been kept up to date or disciplinary actions have occurred, the homeowner who counted on your referral is not protected by the Maryland Home Improvement Commission's Guaranty Fund if the job goes awry. Also, if you recommend a person who does not have a valid, current license, then you have not met your duty of care to your client. Failing to adhere to the standards set forth in §17-532 of the Maryland Real Estate Brokers Act subjects you to disciplinary action by the Commission. If you are found to have violated the Act, the Commission could suspend or revoke your license, as well as assess a civil penalty of up to $5,000 for each violation.

Please check the Maryland Home Improvement Commission's Public Query page to look up the license status of any person you consider referring to clients for home improvement. The Home Improvement Commission can also be reached by calling 1-888-218-5925 (toll-free) or 410-230-6231 (Baltimore area). If you are unsure about which types of improvements require a Home Improvement Contractor's License, please refer to the list posted on the website. Searchable licensing information is also maintained by the State for electricians, plumbers, home inspectors and other home-related occupations. 

One of the most persistent problems associated with our national foreclosure crisis has been the laborious process of finding out contact information for owners of vacant homes that have fallen into disrepair. Sometimes, a sea of paperwork and a lengthy process of recording documents can delay finding responsible parties for up to 18 months. In that "limbo period" between the time a foreclosure sale occurs and a deed transferring title is recorded, a lot can happen to compromise the security and the maintenance of the property, causing major headaches for neighbors and local jurisdictions.

Chapter 155 of the Acts of 2012 created the Foreclosed Property Registry to eliminate that frustrating period of time that foreclosed properties' owners may not be easily contacted. The Registry is maintained by the Division of Financial Regulation of the Department of Labor, Licensing and Regulation and it contains the contact information for who purchased the foreclosed home and who is responsible for maintenance.

While the Division maintains the database, it is the responsibility of each foreclosure purchaser to enter the information into it. A "foreclosure purchaser" is defined in the law as the purchaser on the report of sale in a foreclosure sale of a residential property (typically the lender). By law, the person responsible for conducting the sale must provide the purchaser with instructions to register and obtain a written acknowledgment of receipt of the instructions. The instructions can be found here.

Any residential property sold at a foreclosure sale on or after October 1, 2012 must be entered into the database in two steps. The initial registry must be made within 30 days of the foreclosure sale. The fee is $50. After 30 days, the fee doubles to $100. Then, the second registry must be made once a deed for the property has been recorded. There is no fee for the second registry. In both steps, the foreclosure purchaser is required to enter the information, not any subsequent purchaser or real estate licensee involved in the sale.

The information contained in the database is intended for use by local jurisdictions and state agencies, and may be provided to homeowners on the same block as the foreclosed home or the appropriate homeowners or condominium association. It is not part of public record.

Enforcement of the Act has been left to the discretion of local jurisdictions. A local jurisdiction may enact an ordinance to impose a civil penalty up to $1000 for violating the law, and may collect costs associated with the abatement of a nuisance on the property. To read Chapter 155 in its entirety, please click here. If you need help with the instructions on the website for the Foreclosed Property Registry, please email ForeclosureOutreach@dllr.state.md.us. 

As a service to consumers, the Maryland Insurance Administration (MIA) has recently published a short flier about consumer rights in the real estate settlement process. The flier, The Title Insurance Consumer's Bill of Rights----9 Things You Should Know Before Signing a Contract of Sale or Refinancing Your Property, may be downloaded from the MIA website. The MREC strongly urges licensees to make every effort to provide a copy of the document to their clients before they sign contracts. A longer publication, A Consumer Guide to Title Insurance, can also be found on the site.

Image courtesy of jannoon028/FreeDigitalPhotos.net

ASK BEFORE YOU ADVERTISE

An unusual question was posed during the September 2012 meeting of the MREC: Can a licensee make an appointment to view a property listed by another broker and take a video of the property for the purpose of posting it online? The short answer is no, if the seller has not given the licensee the authority to do so.

Online advertising is a powerful tool for selling real estate, but licensees should always be granted permission before utilizing it. The seller must approve an initial production, as well as any edited videos that add to, subtract from, or enhance the original listing material. This principle also applies to any changes made to an MLS listing that was not originated by the licensee. 

When SB134----Sunset Extension and Program Evaluation took effect on July 1, 2012, an important change in the administration of the MREC's Guaranty Fund began. Since that date, consumers are eligible to recover a higher amount of money if they suffer a financial loss due to licensee misconduct. Previously, the statutory award cap was $25,000. That cap has now been increased to $50,000, effective July 1, 2012. The new cap applies to all claims pending before the Commission as of that date, as well as to those filed subsequently.

Also, the new law increased the award cap for consumer claims that do not result in a formal hearing before the Commission. Consumers are now eligible to receive up to $5,000 in compensation for their losses, increased from the prior cap of $3,000.

The Commission has deployed a new Continuing Education (CE) banking program for all approved Maryland CE providers. The providers will now begin to upload all continuing education records directly to the Commission within 14 days of the completion of a class. The uploading will be mandatory effective January 1, 2013.

Immediately upon receipt of the attendance data, the Commission will notify the licensee that the provider has uploaded the attendance record to the Commission. The email will contain the name of the provider, topic, course name, course number and the number of credit hours. It will also cite instructions in the event the data is incorrect. In the event a licensee has multiple licenses, the course data will be automatically applied to all licenses.

The Commission will also be adding a link on our home page that will allow a licensee to sign in using his or her current e-licensing profile and verify the course attendance records as submitted by the schools. The portal is not available yet; however, we will notify you and your broker when it is available for use.

Effective January 1, 2013, education providers will not be required by the Commission to issue paper certificates of completion of Continuing Education. In the event a licensee is selected for an audit of his or her continuing education, he or she will only be required to provide proof of completion of Continuing Education taken prior to January 1, 2013. Classes taken after January 1, 2013 will be automatically calculated by the Commission. 

The MREC is pleased to announce a new publication available for brokers who are considering owning and/or operating a real estate brokerage, ARELLO's Supervising Broker Best Practices----A Broker's Guide to Creating a Policy and Procedure Manual. The guide was developed by a task force created by the Association of Real Estate License Law Officials (ARELLO), and two of MREC's representatives served on the nine-member task force. MREC Chair John Nicholas (Nick) D'Ambrosia, who served as Vice Chair of the 2011--2012 Supervising Broker Best Practices Task Force, and Executive Director Katherine Connelly met with representatives from all over the United States and Canada to create the guide. It covers topics including employment contracts, office policies, records management, trust accounts, consumer affairs and crisis management. The manual is intended to serve as a basic template that can be modified according to local laws and rules, as well as brokers' individual policies. To download a copy, please click here.

The MREC recently made another technology-based improvement in the license renewal process, and it has been working smoothly since inception. Until now, brokers have always had to contact the MREC prior to renewal to find out if we had received their credit reports. That step has now been eliminated. Once a credit report is received by us, an automatic confirmation email is sent to the broker at the email address we have on his or her licensing record, signaling that the broker can proceed with renewal. We hope that brokers remember to keep their email addresses current with us, since so many of our streamlining efforts are based on faster electronic communication.

Have you taken advantage of your ability to make most of your information changes with the MREC online? If you are still picking up the phone or sending letters, then you are missing out on the convenience, personal security and quick turnaround times.

When you need to notify us of a name or address change, an alteration in the status of your license, or when you've transferred to another broker, you can easily enter that information yourself into the MREC's status change area of the website. It's easy, your information is more secure, and the changes take effect immediately. If you weren't convinced to make the switch before now, and you've forgotten your password, let us know. We will email it to you so that you can begin to make your changes quickly and securely.