**Effective June 9, 2009**
The majority of SB253 is effetive 10.1.09, but per AB 350, section 8 of SB253 is, “effective upon passage and approval”
The debate is over – the seller must pay for it. Now, that likely does not stop the listing agent from asking the Buyer to pay for it up front (like an appraisal) and be reimbursed at time of closing.
If the Seller refuses to provide and the escrow closes, the Buyer still (even in this new law) loses any right to claim damages. If the Seller and Buyer agree (right or wrong) to simply not have the package delivered, this form will serve to keep your transaction folder complete, click on this title to retrieve it: Re-Sale’ Package Non Receipt Buyers’ Hold Harmless of Broker.
II. Packages Must Now Contain Amount of Transfer Fees.
A resale package must now contain a, “A statement of any transfer fees, transaction fees or any other fees associated with the resale of a unit.” NRS 116.4109 (1)(e). This is helpful. Many times the transfer fees were learned of after close of escrow. This not the fee for the package, rather a fee to ‘join’ the association.
June 11, 2009 at 6:04 am
Darren,
With respect, SB 253 does not actually take effect until October 1, 2009. See:
https://www.leg.state.nv.us/75th2009/Reports/history.cfm?ID=694
I only wish it took effect immediately.
June 11, 2009 at 9:32 am
Thank you for that clarification. I understood 10.1.09 also but was informed it was immediately. I have corrected the posting.
June 21, 2009 at 2:07 pm
Hi Darren,
At our company, we received a written notice to all agents stating that “Because of language added in AB 350 from the 2009 session which impacted this bill, the legislation is effective on June 9, 2009.” A copy of the bill was inserted which reads, “This section and section 8 of this act become effective upon passage and approval.”
June 11, 2009 at 6:47 am
Dang –
I was ready to write addendums to all my offers. So it is Oct 1 as an effective date?
June 11, 2009 at 9:32 am
Yes, effective 10.1.09. If I hear of any changes, I will report immediately.
June 11, 2009 at 8:45 am
Is that going to be enforced?
Banks are already breaking so many rules with absolutely no consequences….
June 11, 2009 at 9:33 am
I agree it will be difficult. I predict the listing brokers will be paying for these packages.
June 21, 2009 at 2:13 pm
The notice from our company states: “the seller is required by law to pay for and furnish the CIC package. If the seller does not pay for and provide the package, the Buyer will have the right to cancel the escrow at any time for any reason without penalty. This means that a full refund of the Buyer’s EMD would be required by Law.” So if the property is canibalized, vandalized, or the buyer has a change of heart, he has an out. Wonder if this would also cover post-closing, if the Buyer sues to reverse the sale?
June 22, 2009 at 9:32 am
If the Package is not received and transaction closes escrow, the Buyer has no rights as to the contents of the CIC package. If vandalism occurs prior to COE, NRS 113 would allow for a cancellation without penalty provided the escrow is canceled within four (4) days of Buyer’s knowledge of the vandalism.
June 11, 2009 at 10:08 am
I just logged on to MLS, and the notices there also reflect an effective date of June 9, 2009. I am unable to find any documentation that shows this to be the case, but I will certainly continue to look. Darren is almost certainly correct in his prediction that listing agents are going to eat some fees, at least until they get strong enough to demand reimbursement from their sellers!
June 11, 2009 at 10:49 am
**Effective June 9, 2009**
The majority of SB253 is effetive 10.1.09, but per AB 350, section 8 of SB253 is, “effective upon passage and approval”
June 11, 2009 at 10:58 am
[...] Please also see my June 10, 2009 Update on CIC Packages. [...]
June 11, 2009 at 10:59 am
[...] Please also see my June 10, 2009 Update on CIC Packages. [...]
June 11, 2009 at 11:01 am
[...] Please also see my June 10, 2009 Update on CIC Packages. [...]
June 11, 2009 at 2:40 pm
I stand corrected. I was unaware of AB350 having an effect on SB 253. Hurray for the legislature! Let’s modify those contracts!!
July 9, 2009 at 4:45 pm
I was told by the state that the seller or sellers agent has to pay for the HOA package up front, no buyer pay for it and be reimbursed.
You mention “Now, that likely does not stop the listing agent from asking the Buyer to pay for it up front (like an appraisal) and be reimbursed at time of closing.”
I thought that was what the law was stopping ?
July 10, 2009 at 1:22 pm
It’s confusing. I also contacted the NRED and was informed that if the Buyer and Seller agree to a ‘reimburse’ by Seller, that is a private contract that the NRED is not going to comment on/get involved with. The true problem, riddle, is that if the transaction closes escrow..and the CIC package is not delivered, the Buyer loses “all rights” in connection with the package. So the Buyer is left with little choice if the Seller won’t provide. What can a Buyer do? Cancel? What if the they don’t like the cancellation option? Close? If they close escrow without the package, their rights are wavied. The law is poorly written.
July 10, 2009 at 1:47 pm
I just can’t understand why most of these laws are so poorly written. The only thing I can think of is they can be read so many ways that they are arguable in court no matter what side you are on. Also NRED not getting involved in private contract…if it is breaking the law, then the NRED should get involved as the contract is void if it breaks the law, correct ?
My situation is.. Fannie Mae is the seller. They require the buyer to be responsible for all costs, whether buyer or seller in the transaction. So the buyer has to pay the transfer tax, HOA docs, Owners and Lenders Title insurance, etc. They added an extra 3% of reimbursed funds to cover the buyers closing costs but all loans require no more than 6% of closing costs to be reimbursed by the seller. So buyer is required to pay for the HOA package up front AND WILL NOT be reimbursed at closing by the seller as it is strictly a buyers fee. That to me is illegal.
July 11, 2009 at 8:55 am
Both Bob and Darren raise interesting dilemmas to which there are few answers. I can comment on a couple of areas however. First, the NRED is not empowered to investigate the actions of Buyers or Sellers or enforce NRS, except as it specifically relates to real estate license activities. So the actions that a Buyer or Seller take in a particular transaction that are in violation are not the purview of the NRED. The state calls them “civil” violations and requires that the offended parties hire legal counsel to go after the violators. It stinks, but there you have it.
Secondly, in my experience, the honest and ethical sales executives on the street have properly advised their sellers and asset managers of the new requirements and are having little trouble getting these fees paid. Of course, the honest and ethical are, as usual, way outnumbered by the lazy, the liars, and the weak, who are either too afraid or too disorganized to properly counsel their clients, most of whom really will to do the right thing, but only if it is pointed out to them. As for the case with Fannie, if we know going in that Fannie is not going to pay any costs, but allow 6% for the Buyer to pay them, it is up to us to negotiate that into the transaction, then work with our lender to try keep the costs within that range. It will never be perfect, but if it were easy, then everyone would be in real estate. (Oh wait a minute–I think everyone IS in real estate!)
July 16, 2009 at 4:12 pm
Put on your seatbelt. I just received a copy of a rather nasty e-mail from the licensed and permitted community manager of the HOA where my seller lives. In this e-mail, my seller is told that he does not have an active real estate license, and therefore cannot order his own Re-sale package and pay for it. She writes to the seller, “I don’t see that you have an active Real Esate license, so frankly, your agent should be doing this for you. this is why you are paying them a commission.” She then refuses to honor the seller’s written request for the re-sale package unless he submits a signed “Addendum to the Listing Agreement for CIC Properties.” This woman actually has a real estate license and a property manager’s permit in Nevada. OK, guys. Professional Standards or Real Estate Division?
July 16, 2009 at 5:26 pm
Nancy,
This should be immediately reported to the RE Division AND Pro standards. You should make the complaint to Pro Standards and have your client make the complaint to the RE Division.
July 16, 2009 at 7:02 pm
Thank you, David. I am on it.
My seller is an inactive licensee, and fortunately had the good sense to copy me on the HOA property manager’s correspondence to him.
July 31, 2009 at 9:15 am
Hi,
I came into this blog when I was searching for a related issue on CIC capital contribution and transfer fees. I’m about to close on a house in LV I purchased and when I got my HUD-1 addendums, I was surprised to see a couple of fees imposed by the HOA on the buyer– the capital contribution and transfer fees. My agent is currently fighting to have the seller pay for them since he says that these CIC fees are the responsibility of the sellers in accordance with the Nevada state law that just took into effect (this is how I got to your blog).
Now from what I understand and the explanations above, are these fees the seller’s responsibilities? I think they are based on the laws of the resale agreement described in this blog. I would appreciate any comments on this. Thanks!
July 31, 2009 at 9:25 am
Larry,
Transfer fees and capital contibutions, while technically negotiable, are almost always Buyer costs. The changes in NRS 116 only relate to the CIC “Resale” package. It does not affect Capital Contributions or Transfer Fees, other than to require that those be properly disclosed in the Resale Package.
July 31, 2009 at 9:42 am
Thanks David,
I guess I’m not sure what exactly is a “resale” package. The thing is, I do not see any line items related to CIC on the seller side. I only see them on the buyer side, and that’s the capital contribution + transfer fees. That’s why I lumped them together and assumed they were related to the “resale” of the home.
Anyway, here’s my dilemma. On the purchase agreement, IIRC, the transfer fee and capital contribution fee was checked as seller’s responsibility. So I’m not sure what’s going to happen. My agent told me that there was a new law in effect in Nevada that puts the onus of all CIC-related fees on the seller, not just the “resale” package. I know my agent is not a lawyer by any means, but he is convinced that the seller must pay for these items.
The problem I’m having is that these fees are brought to my attention a couple of days before closing. If I understood these way before making a decision on purchasing this house, I *may* have backed out. Combined, they’re almost $1500 in what I consider BS fees.
Any other comments would be appreciated. Thanks again!
July 31, 2009 at 3:05 pm
Larry,
I’m neither your agent, nor an attorney, so I must be cautious in how I approach this response. I believe your agent is misinformed as to the responsibility for some the fees. I would be very careful in examining your purchase agreement and any addenda that were signed by all parties, to determine who pays what to whom. With the exception of the CIC Resale package, which is specifically defined in NRS (Includes CCRs, Budget, Reserve Study, Rules & Regs, Litigation Report, Financial Statements) no other costs are specifically required to be paid by the Seller. HOAs often charge transfer fees, statement fees, capital contributions, etc. Again, you must look at your specific contract, in conjunction with your agent, to determine who is responsible for payment, but the requirement for a Seller to pay for the Resale Package does NOT also obligate the Seller to pay for anything else.
I’m sorry you have this kind of heartburn at the end of a transaction. It’s too bad you did not get a better look at these fees earlier in escrow. By the way, these fees ARE available, and are not a secret, so your agent could have asked for a preliminary HUD-1 (closing statement) at any time during the escrow process. While some fees do not become known until the very end, most escrow agents can approximate them with reasonable accuracy.
June 22, 2009 at 9:33 am
Yes, effective June 9, 2009.