Buyers, Sellers and “Dual Agency”

The Multiple Roles of Agents and Brokers

Buyers and sellers of real estate frequently don’t understand the role of real estate agents and brokers, their functions, and what interests they represent.

All real estate agents are licensed under a real estate broker, and a broker may employ many agents. It is therefore possible for a buyer to work with one agent who is licensed by the same broker as the listing (selling) agent. Legally speaking, real estate agents are categorized as “salespersons”, and who act under the “supervision” of a real estate broker.

When an undecided buyer, looking for a home, contacts an agent, they create a single agency relationship. The agent’s relationship with the buyer changes if the buyer chooses a home listed by that agent’s broker. This situation creates a dual agency. The agents could work at separate offices and be strangers to each other, but since they are licensed by the same broker, they are still operating under dual agency if one agent represents the buyer and the other represents the seller. Not all single agents note the distinction. As a practicality, most of these dual agents act the role of dual agency but continue to function as single-agency representatives.

In California, representing both buyer and seller (dual agency) is permitted with consent of all parties. Any confidential information pertaining to one party cannot be transmitted to the other party, and vice versa. This arrangement can be to the advantage of all involved, since all parties may work to achieve common goals, rather than one party trying to take advantage of the other party.

Real estate brokers and agents actually have no legal obligation

What buyers and sellers alike may not realize is that, in many cases, real estate brokers and agents actually have no legal obligation to look after their best interests. In a dual agency situation, both brokers and agents may guide the transaction to their own best advantage. All states provide avenues for brokers to “double end” a deal, working with both the buyer and seller in the same transaction. They then avoid the need to split commission income with a cooperating broker. In such instances, it is possible that neither the buyer nor seller is fully represented.

Many states now allow brokers to provide services to buyers and sellers as “transaction brokers” or “facilitators,” without traditional fiduciary duties of loyalty and obedience.

DiJulio Law Group

Defending Enforcement Actions in Environmental Law

A state that is a leader in innovative environmental regulation

Business in California contributes substantially to the nation’s economy, while being challenged by operating within a state that is a leader in innovative environmental regulation. The attorneys at DiJulio Law Group understand that environmental regulations are necessary and vital for the health and safety of all citizens. Environmental cases involve a mix of statutory and regulatory knowledge. They require the ability to present complex regulatory and scientific issues to persons with little or no experience in such matters.

Our practice includes the defense of property owners facing legal and regulatory challenges. We first seek negotiated solutions to environmental issues; however, we are prepared to pursue litigation in order to protect the rights of our clients. If your business or construction project has encountered environmental law problems, our law group provides strategic solutions for enforcement actions and identifies opportunities related to environmental law and policy.

Environmental Law and the Resource Conservation and Recovery Act

Enacted in 1976, most Resource Conservation and Recovery Act requirements are not industry-specific but apply to any company that generates, transports, treats, stores, or disposes of hazardous waste. DiJulio Law Group has helped effectively defend many Resource Conservation and Recovery Act (RCRA) enforcement actions.

The objectives of the RCRA are to protect human health and the environment from the potential hazards of waste disposal, to conserve energy and natural resources, to reduce the amount of waste generated, and to ensure that wastes are managed in an environmentally sound manner. RCRA regulates the management of solid waste (e.g., garbage), hazardous waste, and underground storage tanks holding petroleum products or certain chemicals.

In defending many Resource Conservation and Recovery Act (RCRA) enforcement actions, we often have obtained dismissal of claims or substantially reduced penalties. We have also represented many companies in numerous air quality enforcement cases and other environmental problems. The DiJulio Law Group is lead by David DiJulio, holder of a master’s degree in environmental science.

DiJulio Law Group

Legal Issues for Condominium and Homeowners Associations

…these homeowners associations often comes with extensive and complex rules

In southern California, condominium and homeowners associations have become an integral aspect of residential ownership for many people. Ownership under these associations often comes with extensive and complex rules. There may be rules that govern everything from where you can park, how expensive your assessments can be, what items your assessments can cover, and or whether you can display holiday lights or a flag. As a result, legal guidance from a qualified condominium or homeowners’ association attorney is well advised in order to understand your legal rights and responsibilities.

There are many areas of association business that require qualified legal advice such as document amendments, collections, contracts, rules, governance, and other such legal issues that will arise.

Assessment revenue provides necessary funding

Assessment revenue provides necessary funding for community associations. The legal obligation to collect delinquent assessments is the duty of the association’s Executive Board, Board of Managers, Trustees or a Board of Directors. This function is vital in order to protect the interests of the association as well as the property values of its members. The ongoing maintenance of the common areas, units or homes in the development helps maintain property values. However, it can be difficult to enforce at times and just one uncooperative owner can detract from the overall appearance of the development and substantially lower property values.

…increasingly defined in litigation

Homeowners and their community association relationships have been increasingly defined in litigation in recent years, due to the rapid growth of association governed communities and the issues being presented to the courts. Disputes that cannot be effectively resolved through mediation and non-judicial measures may require litigation.

Small Claims Court for Resolution of Some Issues

There are matters that may arise matters that don’t justify the need of legal counsel, or the expense to achieve an acceptable resolution. Some associations employ Small Claims Court to resolve issues relating to the collection of fines and delinquent assessments.

DiJulio Law Group

Protection From Foreclosure Fraud

California’s Homeowner Bill of Rights and Foreclosure Fraud

Foreclosure fraud in California has increased due to the number of homeowners who were talked into buying more property than they could afford. Predatory lending practices became commonplace as brokers used any means possible to qualify marginal borrowers. Mortgages with affordable initial rates that quickly adjusted to much higher rates put many in an untenable financial position. Extreme types of adjustable rate mortgages reset periodically throughout the life of the mortgage, continuously going higher. Mortgages with inconspicuous balloon payments that required borrowers to produce enormous sums of money were included in many contracts.

The increasing number of unaffordable mortgages led to an endemic number of foreclosures and with them followed foreclosure fraud. Foreclosure fraud utilized faulty documents and/or procedures, which resulted in homeowners wrongfully losing their homes. State and local government agencies are now investigating allegations of improper foreclosures by banks and other lending institutions. Meanwhile, homeowners have also filed foreclosure lawsuits, alleging banks used an unethical foreclosure process to force them out of their homes.

Between 2008 and 2011, more than one million homes in California were foreclosed. In many cases, lenders did not provide homeowners with a significant opportunity to obtain loss mitigation options to avoid foreclosure and also engaged in extensive mortgage servicing misconduct

A law, California’s Homeowner Bill of Rights, that reformed some aspects California’s foreclosure process went into effect on January 1, 2013. It was formulated in order to better protect homeowners in foreclosure. The Homeowner Bill of Rights makes the nonjudicial foreclosure process in California more fair and transparent. The law’s protections for homeowners and now the Homeowner Bill of Rights can aid homeowners facing foreclosure in California.

The Service members’ Civil Relief Act and Foreclosure Fraud

A federal law that provides foreclosure benefits to those on active military is called the Service members’ Civil Relief Act (SCRA). If you took out a mortgage before you went on active duty, you are entitled to a variety of protections against foreclosure.

Under the Service members’ Civil Relief Act (SCRA), all states are required to have judicial review of foreclosures and a judge is required to authorize foreclosures on homes of military members. Foreclosure authorization can only be given after a hearing at which military members are properly represented. The SCRA was enacted to protect active military members, some of them on duty overseas and with no ability to make mortgage payments. It has been reported that some service members have returned from active duty to discover that their home was in active foreclosure.

DiJulio Law Group

The Limited Liability Company or LLC

A Limited Liability Company (LLC) is Flexible and Also Provides Tax Benefits

Unlike a corporation, a limited liability company (LLC) is a flexible, hybrid type of legal enterprise. They provide the limited liability features of a corporation and the tax benefits and operational characteristics of a partnership. The LLC’s main advantage over a partnership is that the liability of the LLC’s owners (members) for debts and obligations of the LLC is limited to their financial investment. This limited liability for its owners applies in the vast majority of United States jurisdictions. Businesses that engage in professional services requiring a state professional license, such as legal or medical services, may not form an LLC but may find that a Professional Limited Liability Company (PLLC) suits their requirements.

LLC’s Offer Tax Benefits and Liability Advantages

For U.S. federal income tax purposes, an LLC isn’t considered a separate entity from its owners. An LLC is treated by default as a “pass-through entity.” All profits and losses are “passed through” the business to each member of the LLC. This means that an LLC will not pay taxes by itself; rather, the members pay the taxes on their personal tax returns. If there is only one member in the company, the LLC is treated as a “disregarded entity” for tax purposes. The individual owner would report the LLC’s income or loss on Schedule C of his or her individual tax return. Thus, income from the LLC is taxed at the individual tax rates.

LLCs shield members from personal liability if the business goes bankrupt or injures someone or otherwise incurs legal liabilities. This means that, although your business might fold, courts and creditors will generally not be able to take the member’s personal assets. Separation between business and personal responsibility and assets is maintained.

There Are Some Disadvantages

LLCs generally do not have specific roles like directors, managers, and employees. Unlike corporations, they are not required to have a board of directors or officers. Lack of a traditional management structure can make it difficult for the company and especially investors to determine authority for various company functions. This management structure of an LLC may be unfamiliar to those used to corporations and could be used by some to gain unfair advantage. Creation of an LLC operating agreement may define roles and eliminate confusion.

LLCs are usually subject to self-employment taxes unless members choose to be taxed like a corporation. Choosing to be taxed like a corporation may lead to increased tax liabilities. For this reason, when choosing to start an LLC, it’s wise to speak to a knowledgeable lawyer who can explain this fully. Since laws and taxes vary from state to state, the best choice for a LLC may be some state other than the one under current consideration.

DiJulio Law Group

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