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Lease/Purchases and rentals

What Realtors ® Need To Know. Lease/Purchases and rentals. Presenters. Steve Byrd, Carolina Multiple Listing Services, Inc. (CMLS) H. Frazier Wallace II, Esq., Doyle & Wallace, PLLC Stephanie Gossett, Lake Norman Realty, Inc. Dana Rhodes, DREI, instructor, Mingle School of Real Estate

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Lease/Purchases and rentals

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  1. What Realtors® Need To Know

    Lease/Purchases and rentals

  2. Presenters Steve Byrd, Carolina Multiple Listing Services, Inc. (CMLS) H. Frazier Wallace II, Esq., Doyle & Wallace, PLLC Stephanie Gossett, Lake Norman Realty, Inc. Dana Rhodes, DREI, instructor, Mingle School of Real Estate Debbie Wey, CMLS
  3. LEASE/PURCHASEs and Rentals statistics Presented by: Steve Byrd
  4. Statistics: lease/purchase LISTINGS
  5. Statistics: rentals
  6. LEASE AND AGREEMENT TO PURCHASE, AKA LEASE/PURCHASE Presented by: H. Frazier Wallace
  7. Difference between a Lease/Purchase and: a lease agreement with an option to purchase traditional mortgage seller financing buyer possession before closing agreement LEASE AND AGREEMENT TO PURCHASE, AKA LEASE/PURCHASE
  8. When should I call a lawyer? When should the buyer do inspections? What needs to be in the agreement?
  9. Purchase The tenant is obligated to purchase the property at the end of the term based on the terms of the Offer to Purchase and Agreement that is entered into contemporaneously with the Lease/Purchase, and attached as Exhibit A and incorporated into the Lease/Purchase. LEASE/PURCHASE-TERMS OF THE AGREEMENT
  10. Term This paragraph lays out the term of the Lease/Purchase, when the first monthly rental payment is due, and the amount of the first payment if it has been prorated. LEASE/PURCHASE-TERMS OF THE AGREEMENT
  11. Non-Refundable Fee How much needs to be paid to the seller for taking the property off the market for the length of the term? This payment is non-refundable, and if agreed to, can be credited at closing. LEASE/PURCHASE-TERMS OF THE AGREEMENT
  12. Rent How much is the rent per month, and what, if any, of that monthly rent shall be credited against the purchase price at closing? LEASE/PURCHASE-TERMS OF THE AGREEMENT Commissions How do I as the agent get paid for bringing this deal together?
  13. Obligations during the term of the lease for Tenant Landlord Default If the tenant does not perform under the terms of the lease? If the landlord does not perform under the terms of the lease? LEASE/PURCHASE-TERMS OF THE AGREEMENT
  14. Personal property of landlord left in/on the property during the term of the lease Eminent Domain and Casualties: What happens if the house is struck by lightning and burns to the ground? Landlord’s insurance requirements Tenant’s insurance requirements Landlord bankruptcy: What happens if the landlord files for bankruptcy? What happens if the landlord is foreclosed upon?
  15. Lease/purchases and Rentals Presented by: Stephanie Gossett
  16. N.C. License Lawcommission rules Presented by: Dana Rhodes, DREI
  17. Article 1 93A-2 (a) Compensation Real estate brokerage For others
  18. Real Estate Brokerage Lists or offers to list Sells or offers to sell Buys or offers to buy Auctions or offers to auction
  19. Real Estate Brokerage, cont’d Leases or offers to lease Sells or offers to sell leases Rents or offers to rent
  20. Commission Rule A.0104 (a) Every agreement Brokerage services Shall be in writing Signed by parties
  21. Commission Rule A.0104 (a) cont’d Every agreement Brokerage services Between broker and owner Writing from time of formation
  22. Commission Rule A.0104 (B) Fair housing language must be included.
  23. Commission Rule A.0104 (C) Brochure Sales transactions
  24. Essential ElementsIn Agreement with Owner Parties identified Consideration spelled out Legally competent parties Performance of legal acts Be specific
  25. Essential Elements of a Rental Agreement Parties identified Land must be identified All material terms set forth
  26. Property Ownership Rent – intangible right Appurtenant to land Needs to be addressed
  27. Commission Rule A.0107 (a) Tenant security deposits Deposited in trust or escrow account PB must deliver immediately to BIC
  28. North Carolina Real Estate Law Chapter 42, Article 6 “Tenant Security Deposit Act” Outlines three major areas of security deposits
  29. Tenant Security Deposit ActHow Much and Kept Where Security deposit based on term of lease Rental income and tenant security deposits Trust account
  30. Tenant Security Deposit ActPermitted Uses Outlined in Article 6 Tenant’s money – not owner’s
  31. Tenant Security Deposit ActAccounting to Tenant Trust account location Notify tenant Accounting letter 30 days/60 days Abandoned property/deposits
  32. Code of Ethics – Article 11 Standards of practice Competence
  33. N.C. Real Estate Law Residential Rental Agreements Act Act prohibiting retaliatory eviction Tenant Security Deposit Act Act prohibiting self-help eviction Unfair and Deceptive Trade Practices Act
  34. N.C. Real Estate Law, Cont’d Pet fee Eviction procedure Tenant’s personal property Service Members Civil Relief Act Rental insurance
  35. N.C. Real Estate Law, cont’d Remedies for returned check Method of eviction for violation of lease Sexual harassment Forfeiture of real property Contracts requiring writing
  36. N.C. Real Estate Law, cont’d Damage to property Summary Ejectment Victims of domestic violence, sexual assault or stalking
  37. N.C. Real Estate Law, cont’d Mortgages and deeds of trust Escheats and abandoned property Persons with disabilities Damage to property
  38. Lease/Purchases & Rentals Presented by: Debbie Wey
  39. Cash Conventional Federal Housing Administration (FHA) Farmers Home Administration (FMHA) Lease purchase Loan assumption N.C. bond Other Owner financing Personal loan Trade/exchange Veterans Administration (VA) Add/Edit: lease/purchase Proposed Financing
  40. Searching: lease/purchase
  41. Status: lease/purchase “Pending” (ignore the 60-day e-mail) Some agents include a statement in the “Remarks” explaining that the listing is a lease/purchase. “Sold” when sale is final TEMPO™ Advisory Group to consider a suggestion for a separate status for lease/purchase listings that are under contract
  42. MLS Rules: rentals Rental listings are optional Written agency agreement required A single-family or condo/townhouse property listed for sale or lease is permitted to have a second listing in the rental section of the MLS. “Agreement to Procure Tenant” (Use w/ NCAR standard form 101)
  43. MLS Rules: rentals Member Participants and Subscribers must disclose in the listing if they are the owners of or have an ownership interest in the property submitted to the service. Subscribers must sign an agency agreement with the listing brokerage when listing their own property in the MLS.
  44. MLS Rules: rentals There is no standard NCAR form for listing a residential rental only to find a renter, without also acting as a property manager. Proceed with caution Ask an attorney to draft an agency agreement. Commercial form 572 “Exclusive Right to Lease Listing Agreement” is not designed for residential listings. Listings cannot be full service, i.e., “Full Service=No”
  45. COOPERATIVE COMPENSATION All listings must offer cooperative compensation. Percentage of gross sales price Set (or fixed) dollar amount Cooperating brokerages have a right to know what their compensation shall be prior to their endeavor to sell/lease. Cooperative compensation depends upon sale/lease.
  46. COOPERATIVE COMPENSATION: Lease/purchase If not specified in the listing, any amount paid prior to the sale is a matter of mutual agreement. Examples: ½ of first month’s rent ½ of cooperative compensation paid at inception of lease Remainder paid at closing
  47. Cooperative Compensation: rentals Set (or fixed) dollar amount Percent of first month’s rent (common) Other
  48. Q & A
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