MINNESOTA INTERACTIVE STUDY GROUP PROPERTY OWNERSHIP, TAXATION, AND DISCLOSURES

Transcription

1 MINNESOTA INTERACTIVE STUDY GROUP 1 PROPERTY OWNERSHIP, TAXATION, AND DISCLOSURES

2 Welcome! Take notes and 2 Participate using our chat/text tools on-screen (audio and video are not enabled). More info on our seminar: Instructor Contact: Stuart Johnson, CCIM stuartjohnsonccim@gmail.com Rolfe Kurtyka, Program Director rolfe.kurtyka@brightwood.edu

3 TONIGHT S TOPICS 5 Property Ownership Common Interest Communities Subdivided Lands Property Taxation Seller s Disclosure of Material Facts and Other Disclosures Well, Septic, and Underground Tank Disclosure Requirements

4 QUESTION 6 A decree of dissolution of marriage (divorce) severs all joint tenancies EXCEPT: a. joint tenancy in primary homestead b. joint tenancy in an investment property c. any joint tenancy preserved in the decree d. severalty joint tenancies

5 ANSWER c. any joint tenancy preserved in the decree 7 A decree of dissolution of a marriage will sever all joint tenancies, including the homestead. However, the parties to the divorce may have the decree amended to preserve a joint tenancy ownership. Severalty ownership is separate ownership by one person or entity, therefore no need to separate ownership.

6 QUESTION The document that is used to convey interests from one spouse to another at the time of dissolution of a marriage is most likely a 8 a. Special Warranty Deed b. Bargain and Sale Deed c. Marketable Warranty Deed d. Quitclaim Deed

7 ANSWER d. Quitclaim Deed 9 When the dissolution (divorce) is complete, one spouse will typically give the other a quitclaim deed to transfer his/her interests in said real estate. A quitclaim deed conveys whatever interests the grantor has and makes no conveyances or warranties of title.

8 QUESTION All of the following are considered a common interest community EXCEPT 10 a. condominiums b. cooperatives c. planned communities d. multi-family rental properties

9 ANSWER d. multi-family rental properties The occupants of rental properties are not owners, therefore rental properties are generally not common interest communities. 11

10 QUESTION All of the following are true regarding a Common Interest Community (CIC) EXCEPT 12 a. May charge unit owners a mandatory assessment b. Purchaser always receives a deed to the unit they occupy c. Must hold an annual homeowners meeting d. Require the purchaser of property to receive a disclosure and right of recession

11 ANSWER 13 b. Purchaser always receives a deed to the unit they occupy Purchasers of property covered by a common interest community may purchase a cooperative, which ownership is evidenced by shares of stock and occupancy granted by a proprietary lease.

12 QUESTION The purchaser of a condominium will have all of the following ownership interests EXCEPT a. Freehold ownership of the condominium unit b. Undivided interest as joint tenants in the common elements c. Undivided interest as tenants in common in the limited common elements d. Undivided interest as tenants in common in the common elements 14

13 ANSWER b. Undivided interest as joint tenants in common elements 15 Purchasers of condominiums receive a form of freehold ownership in their unit and an undivided interest in common and limited common elements as tenants in common.

14 QUESTION Limited common elements are owned by all unit owners as tenants in common, but not all unit owners have equal access to them. True False 16

15 ANSWER 17 True: Limited comment elements are owned by all unit owners, but are often reserved for the use of one owner to the exclusion of others. They include such things as assigned parking spaces, storage lockers, and balconies.

16 QUESTION 18 An apartment building owner converting the property to a condominium must give current tenants a day notice to vacant and a day option to purchase the unit which they occupy. a. 60 day notice to vacate/120 option b. 60 day notice to vacate/60 option c. 120 day notice to vacate/120 day option d. 120 day notice to vacate/60 day option

17 ANSWER d. 120 day notice to vacate/60 day option 19 Tenants are given a 60 day option to purchase their unit, once the property owner delivers notice to vacate and the terms of sale. Should the tenants choose not to purchase, they must vacate the unit by the 120 day of the original notice to vacate. 120 days = 1/3 of a year

18 QUESTION An owner of a condominium is required to do all of the following EXCEPT a. attend the annual meeting b. pay assessments c. belong to the homeowners association d. abide by the rules and regulations 20

19 ANSWER a. attend the annual meeting Association members are not required to attend the annual meeting. 21

20 QUESTION 22 According to Minnesota s Subdivided Lands Act, all of the following are true as relates to the offering of such properties for sale in the state EXCEPT a. Developer needs to register the offering of property with the commissioner. b. Prospective purchasers need to receive a copy of the public offering statement. c. The Commerce Department must conduct an inspection of the subdivision d. Buyers are given a 5 day right of recession

21 ANSWER c. The Commerce Department must conduct an inspection of the property. The Department of Commerce does not conduct an inspection of the subdivision. 23

22 QUESTION 24 Real estate property taxes are due and payable on May 15 and October 15 each year. If not paid on time, an interest penalty is charged on the amount of unpaid taxes. True False

23 ANSWER 25 True: Real estate property taxes and payments for special assessments are due and payable on or before May 15 and October 15 each year. An interest penalty is levied on the amount of unpaid taxes

24 QUESTION The interest penalty for delinquent property taxes is determined by all of the following EXCEPT 26 a. Homestead status of the property b. The value of the tax delinquent property c. Date the county treasurer sends out the property tax statement d. Date the property owner submits the property tax payment

25 ANSWER b. The value of the tax delinquent property 27 The delinquency penalty is determined by the homestead status of the property, postmark on the tax statement, and the postmark on the payment. The property s value, assessed value, or amount of taxes unpaid are not a consideration in determining the penalty.

26 QUESTION All of the following may assess charges against a property which are enforced by a foreclosable lien EXCEPT a. counties for property taxes b. CIC associations for association dues c. cities for snow shoveling and mowing d. trade associations for unpaid dues 28

27 ANSWER 29 d. trade associations for unpaid dues Trade associations (such as the Realtors Association) do not have the authority to levy assessments against a property.

28 QUESTION A seller of residential property is not required to provide a disclosure of material facts if the seller is selling the property as is. True False 30

29 ANSWER False: A seller of residential property must disclose material facts when selling as is. 31 As-is means the seller will not fix anything wrong with the property.

30 QUESTION The seller of residential real estate in the state of Minnesota must provide property and environmental disclosures to a prospective buyer before a second showing of the property may occur. 32 True False

31 ANSWER 33 False: Seller of residential property in Minnesota must provide property and environmental disclosures before the seller can accept and sign a purchase agreement to sell the property.

32 QUESTION 34 A seller s property disclosure on residential real estate is required in which of the following situations? a. Selling the property to a former tenant b. Giving the property as a gift c. Providing a deed to a lender in lieu of foreclosure d. Providing a home inspection report from a qualified third party

33 ANSWER a. Selling the property to a former tenant 35 Sellers of residential property are required to provide disclosures to prospective purchasers. Sellers are exempt from such disclosures when the seller provides an inspection report from a qualified third party, foreclosure or deed in lieu of foreclosure, gifting or donating the property, selling to a family member or selling to a current tenant.

34 QUESTION Sellers of residential real estate are exempt from providing disclosure of all of the following EXCEPT 36 a. The owner has been diagnosed with HIV or AIDS b. The home may have paranormal activity. c. The property is located in a neighborhood containing a nursing home d. There was a homicide that occurred on the property

35 ANSWER d. There was a homicide that occurred on the property 37 There is no requirement that a seller disclose if there was a suicide, accidental death or natural death that occurred on the property. However, a murder must be disclosed. Adult family homes, nursing homes, paranormal activity or the property is occupied by one who has HIV or AIDS is not required to be disclosed.

36 QUESTION 38 A home s septic system is certified based on which of the following elements? a. The square footage of the lot the home is on b. The square footage of the home on the property c. The construction style of the home d. The potential for the number of bedrooms in the home

37 ANSWER 39 d. The potential for the number of bedrooms in the home Neither square footage of a home or lot, style of construction are factors in the certifying of a septic system. The more bedrooms in a home the more potential for occupants and thus demand on the septic system. Therefore, systems need to be sized accordingly.

38 QUESTION 40 Underground fuel storage tanks are not considered material facts if they are not leaking and therefore, no disclosure of the tank is required. True False

39 ANSWER 41 False: Aboveground and underground storage tanks are considered material facts, even if they are not leaking and therefore must be disclosed to potential buyers.

40 QUESTION 42 The installation or removal of a petroleum storage tank would require a day advance notice to the Minnesota Pollution Control Agency before work could commence. a. 10 b. 15 c. 30 d. 45

41 ANSWER 43 a. 10 Notice to the Minnesota Pollution Control Agency (MPCA) is required 10 days before the installation or removal of a commercial storage tank. Additionally, a notice is required to the MPCA within 30 days of the completion of the installation or removal of storage tank.

42 Thank you! Questions? 42 More info on our seminar: Instructor Contact: Stuart Johnson, CCIM Rolfe Kurtyka, Lead Instructor