TAX BILL STATUS UPDATE

This Article is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.

Bob signed a contract to buy a home from Sam. The next day, a new buyer offers Sam $20,000 more. Who has what rights?

The most important thing is to read the contract. The contract imposes certain rights and responsibilities on each party. Each "Standard Contract" is different and close attention to every detail is vital to protect your rights.

Of course, Sam would rather sell to the new buyer. But does he have the right to get out of the contract with Bob? Has Bob satisfied every obligation required by the contract, or has he breached it, so Sam can make an extra $20,000?

Maybe Bob wants to sell what he hasn't yet bought, and make a quick $20,000. Can he?

These are real-life common occurrences in today's market.

Regardless of fault, if Sam decides not to sell to Bob, Bob might file a lawsuit for specific performance, as well as a lis pendens. A lis pendens is a recorded legal claim of ownership, effectively preventing Sam from selling or refinancing the property until the case is settled or reaches trial, often 18 months or more.

In the meantime, where does Bob live?

Regardless of fault, lawsuits are not fun. And often the only people who make money are the lawyers. As always, protecting and asserting your rights ahead of time is much better than fighting later in court.

So, read the contract and make a written timeline of every event required, including inspections, disclosures, contingency waivers, document exchanges and approvals, and financing. Make sure that you have the right starting date (usually, the date of acceptance of the contract offer, which is the date both sides signed without additional modification, or the date the final counter-offer is signed without modification). Review your timeline frequently; comply with every deadline as required by your contract, because if you don't, you might lose your rights.

Other News:
Proposition 90 allows qualifying Californian seniors who move from anywhere in California into a qualifying county to take with them their Proposition 13 tax base. Marin is dropping out of the Proposition 90 program, effective January, 1997.

This leaves Alameda, Kern, Los Angeles, Modoc, Monterey, Orange, San Diego, San Mateo, Santa Clara, and Ventura as qualifying counties.

For more on Prop 90 (and 60), see Homeowner's Tax Manual.

CALIFORNIA REALTOR ALERT:
If you owe past due child support, DRE can suspend your license!