PRESS RELEASE

FOR IMMEDIATE RELEASE

Contact: William L. Coulthard, Esq. or Michael J. Gayan, Esq.

Telephone: (702) 385-6000

Re: In Re Kitec Fitting Litigation; Clark County District Court Case No.: A493302

COURT EXTENDS DEADLINE FOR THOUSANDS OF CLARK COUNTY HOMEOWNERS TO CLAIM FREE REPAIRS OF DEFECTIVE KITEC PLUMBING SYSTEMS

At a hearing held on September 14, 2011, the Honorable Timothy C. Williams extended the deadline by three months for thousands of Clark County homeowners to claim free replumbs of the defective brass Kitec plumbing systems. The eligible homeowners now have until March 31, 2012, to claim the free replumbs made possible through settlements reached in the In re Kitec Fitting Litigation class action, including the $90 million settlement with the fitting manufacturer, Ipex, Inc. and Ipex USA, LLC. The homeowners must act now or they will forfeit any right to claim relief from the class action settlements and will have no rights to pursue Kitec-related claims against the manufacturer or the Home Builders or Plumbers responsible for installing the Kitec plumbing systems. Class Counsel, Michael Gayan of Kemp, Jones & Coulthard, LLP, explained that “[I]n extending this deadline, Judge Timothy Williams recognized the importance of class homeowners having a full and fair opportunity to claim their repair under this class action settlement.”

The deadline extension impacts more than 6,000 Clark County homes built by Del Webb, KB Homes, Richmond American, Avante Homes, Signature Homes, Astoria Homes, Pulte, Nigro, D.R. Horton, LBM Development, Wexford Homes, American Premiere, Concordia, Desert Wind, H&H, Pageantry, Platis, RL Homes, SBA Development, and Westmark Homes. A complete list of the developments involved is found on the Court-appointed claims administrator’s informational website, www.TotalClassSolutions.com/Settlements.

The class action lawsuit, which involves more than 32,000 Clark County homes, alleges that as soon as Kitec fittings are exposed to water, the brass in the fittings begins to deteriorate and corrode, which inevitably leads to reduced water flow, leaks, and breaks. There have been hundreds of reported leaks with resulting flood damage to homes. Kitec fittings not only cause substantial damage after they leak and burst, but also impair the ability of a home’s plumbing system to effectively provide water to appliances and plumbing fixtures.

Tim Taylor, President and CEO of the Court-appointed claims administrator, Total Class Solutions, LLC, stated that, “[T]hese homeowners have about six months left to claim the free replumbs. After that, Total Class Solutions will have to turn them away without any relief. It would be a real shame for homeowners to miss out on getting the repairs they need. Class Counsel recovered the resources to fix all the homes and it’s our goal to make that happen. Now we just need the homeowners to contact us and ask for the repairs.”

The approved plumbing contractors doing the work for the class are Delta Mechanical, Dynamic Plumbing, Repipe Specialists, Rakeman Plumbing, Hammer Plumbing, and Plumbing Express. If you are contacted by one of these plumbing companies regarding a free replumb, it is because you may be entitled to receive the repair at no cost to you as a result of this class action lawsuit. All of the homeowners are represented by the law firms of Kemp, Jones & Coulthard, LLP and Lynch, Hopper & Salzano, LLP. These firms were appointed as Class Counsel by Judge Williams on October 16, 2006, when the Court certified a class action lawsuit on behalf of all homeowners in Clark County, Nevada, who have brass Kitec plumbing fittings in their homes.

For information on how to claim the Kitec repairs, go to www.TotalClassSolutions.com/Settlements, which has been established by the Court-appointed claims administrator, Total Class Solutions, LLC.  For more information about the class action itself, please go to www.PlumbingDefect.com, which has been established by Class Counsel to inform potential class members about this litigation.

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For more information on this topic, please contact William L. Coulthard or Michael J. Gayan at (702) 385-6000.

1992 College Ultimate Trophy, missing 19 years, recently recovered. The search is over.

Is REO title safe?  I contacted Equity Title of Nevada and asked this exact question and here is what I have to report.

Yes.  Provided you have title insurance.

Then why these reports about REO, and foreclosure?  These indictments you hear about from the Attorney General are discussing the ‘procedures’ that some limited persons used in filing foreclosures.  The Attorney General is not representing the consumer in attempting to unwind any sales.  The question really is, will a former owner arrive and demand to be reinstated on title?  Well, since that would come with the debt also, let’s just say, I doubt it.

But if there is a claim about the foreclosure process that affected my home (literally my home is listed as one of those with potential previous foreclosure defects) am I safe?  Yes, again. The odds of there being a claim on your title are very remote.  If there was one, you have title insurance, and you are going to be able to get title insurance in the future.  So it is a non-issue for the normal consumer.

Let’s discuss title insurance.

On residential purchase transactions, there are three primary forms of title insurance that are currently available to buyers.

• The Homeowners Policy (most recently revised in 2010).
• The ALTA Residential Policy (1987 form).
• The ALTA 2006 standard coverage owners policy.

All of these policies provide coverage against loss or damage sustained by reason of title defects which exist as of the date of policy.  Imagine a hypothetical scenario in which, after the date of policy, a former homeowner files a lawsuit which seeks to set aside the prior foreclosure as defective.  If this former owner is successful and ultimately obtains a final, non-appealable court order which rescinds the foreclosure and reinstates his ownership interest then he will have established that the insured’s title was in fact defective as of the date of policy.  Even though the filing of the lawsuit itself was a post-policy matter, the outcome is a court determination of a pre-policy title defect, i.e. an invalid foreclosure.  In this scenario, a title defect or a marketability claim tendered by the insured under any of the above listed owners policy forms would presumably be determined by the underwriter to be a covered matter which must be defended.

There is however, a new law that went into effect on October 1, 2011.  This new law may cause some discussions.  Title companies may not be willing to insure post-foreclosure without a special exception for any claims that are based on an allegation that the foreclosure did not comply with the provisions of AB284.  An REO buyer must simply object to not receiving this coverage.  This is not happening now.  The coverage is being granted.  We need merely watch the field and see if the industry changes.

Equity Title of Nevada recommends to any residential buyer that they consider obtaining the Homeowners Policy. There are many additional benefits to this form of policy which are worth a buyer paying the additional 10% premium.

Any questions, email me darren@dwelshlaw.com or call me 7022451787.

Question #15 on the Nevada Seller’s Real Property Disclosure Form(SRPD)- “This property is subject to a Private Transfer Fee Obligation?”

What is a Private Transfer Fee?  It is an encumbrance on the property, which shows up like a mortgage deed.  It is a recurring fee paid back to the Seller, every time a sale occurs, in exchange for clear title.  The Seller maintains a financial interest in the property for decades after it’s been sold, not with a mortgage or a loan but with a private transfer fee.

As of May 2011, in Nevada they are not legal.  Per Nevada Assembly Bill 271

http://www.leg.state.nv.us/Session/76th2011/Bills/AB/AB271_EN.pdf

Nevada joined with more than half of the rest of the Country in banning private transfer fees on real estate– AB 271 makes all new private transfer fee obligations “void and unenforceable.”

If you have an “existing Private Transfer Fee” it remain legal, but the beneficiaries of currently recorded private transfer fee covenants are subjected to new recording and notice requirements to preserve their interest, including civil penalties for creation of new private transfer fee obligations or failure to comply with the recording requirements.

Question 15 of the Nevada Sellers Real Property Disclosure Statement (SRPD) asks if, “This property is subject to a Private Transfer Fee Obligation?”

Thus per the new SRPD, sellers of properties in Nevada with existing private transfer fee obligations must disclose this encumbrance.

This is a series of Disclosure Entries see also:

Nevada Disclosure In Residential Sales

An Updated All Inclusive & Belt Way Disclosure

The New, Improved All Inclusive Disclosure

Nevada Condominium Hotel Disclosure

Nevada S.R.P.D. New Clarification of Real Estate Disclosure  Laws in Nevada

Any questions, you can call me Darren Welsh 702 245 1787.

SB 314

http://www.leg.state.nv.us/Session/76th2011/Bills/SB/SB314_EN.pdf

For those salespersons that have REO clients, this new statute is fun. Look for a Nevada Real Estate Division update very soon.  Here is a sneak preview.

Short Version, to get ahead of the curb get your property management certificate by attending this course.  http://americanaacademy.com/Default.aspx?pageId=1141702  A list of all schools that provide property management certificate is located here http://red.state.nv.us/forms/502.pdf.  That should render you exempt from most of these new rules.  But as I say above, stay tuned, the real direction from the NRED is on the way.

Long Version, Let’s discuss…

1.) what is an asset manager?

2.) why you should get your Property Management Permit,

3.) what you can and cannot do for your clients? and

4.) the guidance on how to handle abandoned personal property.

What is an Asset Manager and does it apply to me?

An “Asset management company” means a person, for compensation and pursuant to a contractual agreement,
engages in asset management on behalf of a bank.

An “Asset manager” means a person engaged in the business of asset management who is an independent contractor of an asset
management company.

“Asset management” means oversee or direct actions (preserve, restore or improve the value and to lessen the risk of damage to the property) taken to maintain real property on behalf of a client before or in preparation for sale of real property owned by the client pursuant to a foreclosure sale. (This definition would also include any person that buys at a trustee sale, but the definition of client singles out only banks.  Therefore listing homes for trustee sale flippers would not appear to be asset management.)

The statute does not apply to a person or broker who has a current permit to engage in property management pursuant to chapter
645 of NRS.  However, to be exempt the provisions concerning asset management services (see definition above) must be
included in the property management agreement entered into pursuant to NRS 645.6056.  Application will still be required, a fee, etc., reporting and mandatory errors and omissions insurance requirements.

Therefore, if you are directing actions to preserve, restore or improve the value and to lessen the risk of damage to the property which is owned by a client pursuant to a foreclosure sale, you apparently are “asset managing.”

What am I allowed to do?

As an asset manager you are allowed to perform the following on foreclosed properties. (Although the rule says in foreclosure
and it defines “in foreclosure” correctly. Obviously, they meant “after foreclosure” as the lender has no rights to
entre the property until the completed foreclosure sale.  So we will ignore that issue.)

1. Securing real property in foreclosure once it has been determined to be abandoned and all notice provisions required by law have been complied with;  Providing maintenance for real property, including
   landscape and pool maintenance;
2. Cleaning the interior or exterior of real property;
3. Providing repair or improvements for real property;
4. Removing trash and debris from real property and the surrounding property.
5. Dispose of personal property abandoned on the premises of a residence in foreclosure or left on the premises after the
   eviction of a homeowner or a tenant of a homeowner only in the following manner:

30 Days – You shall provide a safe storage of the property for 30 days.  You are liable for your negligence
in storing the property.

Disposal – 14 days Notice.  Prior to disposal you must notify the homeowner/tenant in writing of your intention
to dispose of the property and allow 14 days to elapse. It must be mailed to the homeowner/tenant at the present address of the homeowner/tenant and, if that address is unknown, then at the last known address.  After the expiration of the 30-day period, you may dispose of the property.

• Vehicles must be disposed of in the manner provided in chapter 487 of NRS for abandoned vehicles.

What am I not allowed to do?

As an asset manager you are not allowed to perform on foreclosed properties

1. Evict a real property owner or a tenant of a real property owner until after the time during which the real property owner
   may redeem the real property in foreclosure.
2. Perform any repair, maintenance or renovation on the real property in foreclosure:* Which is required to be performed by a person holding a license unless such repair, maintenance or renovation is done by a person licensed in this State to perform such repair, maintenance or renovation; or

   * Which requires a permit or inspection by any governmental entity in this State, unless the permit is first obtained and the inspection is performed after completion.

   * Receive, collect, hold or manage any money which belongs to another person, including, without limitation.

    …… The statute controlling this form (NRS 113) was modified within Senate Bill 314 in the July 2011 Nevada Legislative Session removing the section that allowed a seller and buyer to mutually agree that the SRPD would not be provided. Such a waiver had to be signed before a notary by a buyer.  The Law can be found here NRS 113

  …… This will affect many sales such as probate, short sales, and bank owned (REO). Exceptions are foreclosure (when the trustee sale occurs, not a bank selling after they have already foreclosed) between co-owners and new home. All sellers in Nevada must now provide this form. Some sellers have not lived in, or even seen these properties, but the statute is clear, it must still be filled out. If a Seller does not provide the form, a buyer may cancel, without penalty.

…… This should not affect the August 7, 2007 entry on disclosure – New Clarification of Real Estate Disclosure Laws in Nevada.  Remember in that case (the Nelson Case), the Nevada Supreme Court ruled on the scenario where a defect, now repaired, was not disclosed on the Nevada SRPD – “Once the [damage] was repaired … it no longer constituted a condition
that materially lessened the value or use of the [home. Accordingly, [the Seller] did not have a duty to disclose the …. damage.” This rule would still apply.

This is a series of Disclosure Entries see also:

An Updated All Inclusive & Belt Way Disclosure

The New, Improved All Inclusive Disclosure

Nevada Condominium Hotel Disclosure

Nevada S.R.P.D. New Clarification of Real Estate Disclosure  Laws in Nevada

Any questions, you can call me Darren Welsh 702 245 1787.

Three 3 key changes.

1. Eviction – no longer requires court order, details below.
2. Abandonment – can be deemed by the landlord, details below.
3. Disposal of Property – is shorted to 14 days, details below.

You can read the new bill by clicking here:

and or here —-  http://www.leg.state.nv.us/Session/76th2011/Bills/AB/AB398_EN.pdf.

1.  Commercial Property Eviction. Landlord/Tenant Law for commercial properties (any real property not considered a dwelling, as defined in NRS 118A.140)
2. Eviction Nonpayment Rent.  Now. Self policing.  Section 14 allows the landlord (or his agent) to change the locks on a commercial tenant’s premises upon delinquency.   No court order is needed.  You must post notice for a minimum of 5 days, informing the tenant where the keys are.   Landlord may demand all past-due rent before releasing the key.
3. Abandoned Property.  “[G]goods, equipment or other property, in an amount substantial enough to indicate a probable intent to abandon the commercial premises, is being or has been removed from the commercial premises,” the landlord may consider the property as having been “abandoned” by the tenant.  If the lease discusses remaining personal property, the provisions of that written agreement pertaining to personal property will take precedence over the language in AB 398.
4. Disposal of Abandoned Property. No longer 30 days.  Upon determination that personal property is abandoned, landlord must send by certified mail, notice giving tenant 14 days to claim the property. There is no requirement of tenant’s signature acknowledging receipt of the notice before disposal on 14 days.

YOU ARE ADVISED TO CONSULT WITH AN ATTORNEY BEFORE COMMENCING ANY EVICTION IN NEVADA. I HAVE A REFERRAL LIST OF REAL ESTATE ATTORNEYS , JUST EMAIL ME, AND I WILL SEND IT TO YOU.  darren@dwelshlaw.com

• real estate brokers can conduct short sales and
• can collect advance fees if they follow their own state guidelines.
• real estate brokers do not have to make several disclosures required by MARS.
• that as more and more American homeowners seek short sales, it is especially important that MARS not inadvertently discourage real estate professionals from helping consumers with these types of transactions.

I am keeping track of the Federal Trade Commission (FTC) Mortgage Assistance Relief Services (MARS) Rule.  My previous post proposing that MARS did not apply to the real estate profession from May 4, 2011 is here Advance Fees – Short Sales – FTC II.  As stated prior, I believe MARS should not affect licensed real estate sales persons, rather is directed at individuals and companies that do not already have a structure in place to police their conduct.

As of July 15, 2011 the FTC has stayed enforcement of many of the provisions of MARS against real estate professionals helping consumers obtain short sales.  The FTC declared the stay on enforcement includes a stay on the collection of advance fees.  Therefore brokers can conduct short sales and can collect advance fees if they follow their own state laws and regulations. See the July 15, 2011 FTC press release here:  http://www.ftc.gov/opa/2011/07/mars.shtm The FTC has ruled on a unanimous vote the following:

FTC will not enforce most of the provisions of the MARS Rule against real estate professionals who are engaged in obtaining short sales for consumers. The stay applies only to real estate professionals who:

1) are licensed and in good standing under state licensing requirements;

2) comply with state laws governing the practices of real estate professionals; and

3) assist or attempt to assist consumers in obtaining short sales in the course of securing the sales of their homes.

The stay exempts real estate professionals who meet these requirements from the obligation to make disclosures and from the ban on collecting advance fees. These professionals, however, remain subject to the Rule’s ban on misrepresentations. As a result of the stay on enforcement, these real estate professionals will not have to make  several disclosures required by the Rule that, in the context of assisting with short sales, could be misleading or confuse consumers. As more and more American homeowners seek short sales, it is especially important that the Rule not inadvertently discourage real estate professionals from helping consumers with these types of transactions.”

See my earlier blogs on Advance Fees

Advance Fees – Short Sales – FTC II May 4, 2011
Advance Fees Continued and the FTC 01.06.2011
Short Sale Advanced Fees 12.3.2010
Charging for negotiating short sales/Negotiators 10.1.2010

READ the entire bill here ===>http://www.leg.state.nv.us/Session/76th2011/Bills/AB/AB273_EN.pdf

There are changes to debt collection as to short sales in Nevada.  This bill has many points, from Seconds to Guarantors.  For real estate sales the major change is effective July 1, 2011.  There are certain restrictions on the ability to recover deficiency at all by Junior Lien Holders of a secured note created after June 2011.  But the 5 star change, is that as of July 1, 2011  junior lien holders (and perhaps senior) have only six (6) months to file suit against a home owner after the foreclosure.

A civil action by the junior lien holder against the home owner after a foreclosure sale of the real property or a sale in lieu of a foreclosure sale may only be commenced within 6 months after the date of the foreclosure sale or sale in lieu of a foreclosure.  This six month rule section applies only to an action commenced after a foreclosure sale or sale in lieu of a foreclosure sale that occurs on or after July 1, 2011.  But that is only foreclosures you ask?  Nope.  It is for short sales also.  A “sale in lieu of a foreclosure” is a short sale.  Sale in lieu of a foreclosure means a sale of real property pursuant to an agreement between the seller and lender in which the sales price of the real property is insufficient to pay the full outstanding balance of the obligation and the costs of the sale.  The short sale (close) or foreclosure (trustee sale) must occur after July 1, 2011.  Then, the Second Lien holder has 6 months, NOT SIX YEARS as was previous rule, to file a law suit for debt collection.  Here exactly what the law says,

A civil action not barred by NRS 40.430 or section 3 of this act by a person to whom an obligation secured by a junior mortgage or lien on real property is owed to obtain a money judgment against the debtor after a foreclosure sale of the real property or a sale in lieu of a foreclosure sale may only be commenced within 6 months after the date of the foreclosure sale or sale in lieu of a foreclosure.”

This Section 3.3 this act apply only to an action commenced after a foreclosure sale or sale in lieu of a foreclosure sale that occurs on or after July 1, 2011.

The explanation of this Section from the Legislature is here —-> Existing law authorizes a creditor under an obligation secured by a junior mortgage or deed of trust to bring an action to obtain a personal judgment against the debtor only if the action is commenced within 6 years after the date of the debtor’s default. (NRS 11.190) Under property securing such an obligation is the subject of a foreclosure sale, a trustee’s sale or a sale or deed in lieu of such a sale, the creditor may bring an action to obtain a personal judgment against the debtor only if the action is brought within 6 months after the foreclosure sale, the trustee’s sale or the sale in lieu of a foreclosure sale or trustee’s sale.

WHAT what does it mean?.  Since the complete ban on debt pursuit only applies to loans from here on, a consumer will not be able to rely on that now.  BUT, what is important is that all short sales (close) and foreclosures (trustee sale), after July 1, 2011, now leave the homeowner exposed for a law suit from the Junior Lien Holder for only six months.  This appears to be both owner occupied and investor.

II.  First Deed Rights To Sue On Short Sale -  SB 414

READ the entire bill here ===>    http://www.leg.state.nv.us/Session/76th2011/Bills/SB/SB414_EN.pdf

There are changes to debt collection as to short sales in Nevada.  The blog – TGIF Legal Tip: FORECLOSURE / DEFICIENCY is now outdated.  Effective June 13, 2011.  Pursuant to SB 414,  an owner occupied seller involved in a short sale, is not liable for a deficiency judgment provided 1.) the obligation secured by a mortgage or deed of trust was created on or after October 1, 2009; 2. ) the debt on the property was used to purchase 3.) the seller continuously occupied the home as her principal residence 4.) the lender approved the short sale and either A) did not mention the amount of money still owed or B) the lender specifically waived its right to recover the amount owed.

What does it mean?  The short sale lender approval is more important than ever.  Obviously if the deficiency is waived, great, but now if the approval does not declare exactly what future monies are owed, the lender is barred from seeking these monies (but only on loans issued since 2009 and owner occupied, personally it really does not seem to cover many homeowners.)

But the 6 star (bigger than 5) question is what about investor short sales?  Is the statute of limitations 6 months or 6 years for first on short sales?  Not clear.  NRS 40.455 which states, “the judgment creditor or the beneficiary of the deed of trust within 6 months after the date of the of the foreclosure sale or the trustee’s sale” must file.  It does not appear that this section was modified.  If this section is modified elsewhere in the law to define “foreclosure sale or the trustee’s sale” to include “short sale” as was clearly done when it comes to Junior Liens, this question will be answered.

***

This is part of my short sale series listed below in alphabetical order:

7 Tips for Short Sale

Addendum to Short Sale Listing

Advance Fees Continued and the FTC

Advance Fees – Short Sales – FTC II

Charging for negotiating short sales/Negotiators

Deficiency Judgments Nevada

Foreclosure and the One Action Rule in Nevada

HAMP the Federal Shortsale Program coming April 2010

Income Taxes & Foreclosures/Shortsales

Lender Short Sale Approval Addendum

Nevada Supreme Court Mandatory Mediation Program and How it Affects Shortsale

Nevada Short Sale Documents

Seller Being Released From Liability Language in Shortsale

Seller Liability After Short Sale

Short Sale Advanced Fees

Short Sale Addendum to Purchase Agreement October 2010

Short Sale Wallet Size Answer Sheet

IRS PUBLICATIONS shortsales/foreclosures:

IRS publication on how 1099 taxes are calculated, exempt, etc.

IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.

Ten Facts about Mortgage Debt Forgiveness

Questions?  Call me. Darren Welsh, Esq. 702 245 1787  email me darren@dwelshlaw.com or drop me a TPS by filling out this form