For example, assume a consumer responds to a card issuer's solicitation for a credit card account subject to 1026.60 that offers a range of balance transfer annual percentage rates, based on the consumer's creditworthiness. 1026.55 Limitations on increasing annual percentage rates, fees, and charges. The Florida Real Estate Commission (FREC) issued a seven-year suspension of a broker's license. In the state of North Carolina, a form called a "residential property condition disclosure statement" must be provided to the buyer before a contract can be signed. (ii) For home-equity plans subject to 1026.40, the terms finance charge and annual percentage rate,* when required to be disclosed with a corresponding amount or percentage rate, shall be more conspicuous than any other required disclosure. If the credit plan involves more than one creditor, only one set of disclosures shall be given, and the creditors shall agree among themselves which creditor must comply with the requirements that this part imposes on any or all of them. Sellers are legally required to disclose these issues, but by fully documenting them on the disclosure statement, sellers are better protected from future legal action (say, if a buyer was to sue the seller post-sale for undisclosed issues). 1026.38 Content of disclosures for certain mortgage transactions (Closing Disclosure). The broker decides to appeal FREC's final order. In order for creditors to provide disclosures in accordance with the timing requirements of this paragraph, consumers must be permitted to return merchandise purchased at the time the plan was established without paying mailing or return-shipment costs. On an adjustable rate mortgage loan, the lender's estimated overhead costs plus profit equals the lender's, The first step in protesting the assessed value of real property is to. While there are all kinds of issues that need to be disclosed when selling a house, here are some of the most common items, not including the federal mandate to report lead paint. In general, a creditor may not collect any fee before account-opening disclosures are provided. This is to protect buyers by ensuring they aren't hit with a surprise problem after purchasing the home. Disclosures shall reflect the terms of the legal obligation between the parties. 1026.5 General disclosure requirements. Within how many business days must the broker notify the FREC that the matter has been settled? If the consumer requests the service in electronic form, such as on the creditor's Web site, the specified disclosures may be provided in electronic form without regard to the consumer consent or other provisions of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. For example: A. 3. 1026.35 Requirements for higher-priced mortgage loans. If you fixed something, provide receipts to the buyer to document how the issue was remedied. If any information necessary for accurate disclosure is unknown to the creditor, it shall make the disclosure based on the best information reasonably available and shall state clearly that the disclosure is an estimate. Section 1026.5(b)(2)(ii)(A)(2) does not prohibit the card issuer from treating the required minimum periodic payment as late. Converting closed-end to open-end credit. Sellers who know they have lead paint in their home and fail to disclose it can be held liable for up to a decade, and they can be sued for triple the cost of damages suffered, so always disclose what you know about lead paint in the home. The disclosures should reflect the credit terms to which the parties are legally bound at the time of giving the disclosures. This type of sale puts the burden of any issues on the buyer, with the exception of latent defects that the buyer wouldnt see and could be a health and safety concern. However, within state laws you may find loopholes where agents are responsible to disclose more information than a for-sale-by-owner (FSBO) seller. A deferred interest or similar promotional program under which the consumer is not obligated to pay interest that accrues on a balance if that balance is paid in full prior to the expiration of a specified period of time is not a grace period for purposes of 1026.5(b)(2)(ii)(B). The fact that a term or contract may later be deemed unenforceable by a court on the basis of equity or other grounds does not, by itself, mean that disclosures based on that term or contract did not reflect the legal obligation. iv. Its a required form in real estate transactions and outlines any problems with a property that would impact the homes value or safety. (iii) Certain account-opening disclosures must be provided in a tabular format in accordance with the requirements of 1026.6(b)(1). Whether the card issuer provides the consumer with a new account number; C. Whether the account provides new features or benefits after the substitution or replacement (such as rewards on purchases); D. Whether the account can be used to conduct transactions at a greater or lesser number of merchants after the substitution or replacement (such as when a retail card is replaced with a cobranded general purpose credit card that can be used at a wider number of merchants); E. Whether the card issuer implemented the substitution or replacement on an individualized basis (such as in response to a consumer's request); and. THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN THIS COMMUNITY. (v) Certain disclosures provided on periodic statements must be given in accordance with the requirements of 1026.7(b)(12). New York State's Property Condition Disclosure Act requires sellers to notify buyers about whether the property is located in a flood plain, wetland, or agricultural district; whether it has ever. The card issuer shall furnish the disclosures for credit and charge card applications and solicitations in accordance with the timing requirements of 1026.60. No matter how great a home looks at first glance, a host of problems could be hiding right under that fresh coat of paintwhich is why buyers will want to scrutinize certain . Information is unknown if it is not reasonably available to the creditor at the time disclosures are made. 1. (See the commentary to 1026.17 on converting open-end credit to closed-end credit.). If the consumer rejects the plan, the creditor must promptly refund the membership fee if it has been paid, or take other action necessary to ensure the consumer is not obligated to pay that fee or any other fee or charge. iii. Multiple creditors. Not only will they provide you with the correct forms according to state law, but they can also answer all your questions about what needs to be disclosed and when. When most of the facts and circumstances listed below are present, the substitution or replacement likely constitutes the opening of a new account for which 1026.6(b) disclosures are appropriate. iii. Multiple consumers. 1. It consists of 35 sections, namely: Definitions Application of Title Variation of Provisions of Title by Agreement Prohibited Electronic disclosures. (See commentary to 1026.5(b)(1)(iii) below.). Zillow, Inc. holds real estate brokerage licenses in multiple states. Additionally, the statement requires the disclosure of whether or not the property is conveyed subject to one or more homeowner's associations and obligations to pay assessments or dues. A standard disclosure statement that includes anything related to the condition of the property, like HVAC, gutters, appliances, windows, sump pumps, garage doors and more, Environmental hazards like asbestos or gas leaks, Walls, fences or driveways that are shared with other property owners, as well as information on easements on the property, Renovations made without permits or renovations that are not up to code, A natural hazard disclosure statement, for things like earthquake faults, drainage issues or past flooding, A death on the property within three years (if a buyer directly asks about a death on the property, no matter how long ago it occurred, be honest about what you know). The right to void the contract can be waived in writing by the buyer. Relevant facts and circumstances. Examples include: i. The legal obligation normally is presumed to be contained in the contract that evidences the agreement. See A.R.S. (v) Application fees. If a disclosure becomes inaccurate because of an event that occurs after the creditor mails or delivers the disclosures, the resulting inaccuracy is not a violation of this part, although new disclosures may be required under 1026.9(c). A creditor that provides written materials to a consumer about a particular service but provides a fee disclosure for another service not promoted in such materials would not meet the standard. (B) Home-equity plans. Deferred interest and similar promotional programs. NW-1/4 of SW-1/4 and SE-1/4 of NE-1/4 of Section 6. When a consumer initiates a request, the creditor may permit, but may not require, the consumer to pick up periodic statements. See interpretation of Paragraph 5(a)(1)(iii) in Supplement I. For example, if a consumer telephones a card issuer to discuss a particular service, a creditor would meet the standard if the creditor clearly and conspicuously discloses the fee associated with the service that is the topic of the telephone call orally to the consumer. Mark Smith is preparing to open a real estate office. Mandatory suspension of the license until the licensee has reimbursed the fund, including interest. For credit card accounts under an open-end (not home-secured) consumer credit plan, a card issuer must adopt reasonable procedures designed to ensure that: (1) Periodic statements are mailed or delivered at least 21 days prior to the payment due date disclosed on the statement pursuant to 1026.7(b)(11)(i)(A); and. (2) The card issuer does not treat as late for any purpose a required minimum periodic payment received by the card issuer within 21 days after mailing or delivery of the periodic statement disclosing the due date for that payment. Same facts as in paragraph i above. 1026.46 Special disclosure requirements for private education loans. A creditor may collect, or obtain the consumer's agreement to pay, membership fees, including application fees excludable from the finance charge under 1026.4(c)(1), before providing account-opening disclosures if, after receiving the disclosures, the consumer may reject the plan and have no obligation to pay these fees (including application fees) or any other fee or charge. If an annual percentage rate is required to be presented in a tabular format pursuant to paragraph (a)(3)(i) or (a)(3)(iii) of this section, the term fixed, or a similar term, may not be used to describe such rate unless the creditor also specifies a time period that the rate will be fixed and the rate will not increase during that period, or if no such time period is provided, the rate will not increase while the plan is open. 2. However, the seller reserves the right to NOT pay a commission if he sells the property. Which statement is FALSE regarding homeowners association disclosure requirements? Because 1026.7(b)(11)(ii) provides that 1026.7(b)(11)(i) does not apply to periodic statements provided for charged-off accounts where full payment of the entire account balance is due immediately, 1026.5(b)(2)(ii)(A)(1) also does not apply to the mailing or delivery of periodic statements provided solely for such accounts. Example. (A) Credit card accounts under an open-end (not home-secured) consumer credit plan. Who Inherits Your Property. If the right of rescission under 1026.15 is applicable, however, the disclosures required by 1026.6 and 1026.15(b) shall be made to each consumer having the right to rescind. If you wish to report an issue or seek an accommodation, please let us know. A single, complete set of disclosures must be provided, rather than partial disclosures from several creditors. Assume that, for a credit card account under an open-end (not home-secured) consumer credit plan, a periodic statement mailed on April 4 states that a required minimum periodic payment of $50 is due on April 25. Within how many days must a licensee take corrective action when issued a notice of noncompliance for a minor violation? Charge card accounts. (3) For purposes of paragraph (b)(2)(ii)(B) of this section, grace period means a period within which any credit extended may be repaid without incurring a finance charge due to a periodic interest rate. 5. What interest does Betty hold? 9 Mistakes to Avoid When Selling Your Home. Inaccuracies in disclosures are not violations if attributable to events occurring after disclosures are made. Similarly, in these circumstances, the limitation in 1026.5(b)(2)(ii)(B)(2) on treating a payment as late for any purpose applies for 19 days after the closing date of the billing cycle. A temporary license may be renewed only one time Ten years ago a vacant lot in a subdivision was purchased for $30,500. How is the documentary stamp tax on a promissory note entered on the closing statement? Tax advantages of owning a home do NOT include. The statute provides the form sellers must use to disclose the required information. These less common disclosures can vary by state, but in general, theyre not as common and often fall outside of the real property qualification. For purposes of 1026.5(b)(2)(ii)(A)(1), the payment due date for a credit card account under an open-end (not home-secured) consumer credit plan is the date the card issuer is required to disclose on the periodic statement pursuant to 1026.7(b)(11)(i)(A). Rejecting the plan. An account is deemed uncollectible for purposes of 1026.5(b)(2)(i) when a creditor has ceased collection efforts, either directly or through a third party. Charges that are imposed as part of an open-end (not home-secured) plan and are not required to be disclosed under 1026.6(b)(2) may be disclosed after account opening but before the consumer agrees to pay or becomes obligated to pay for the charge, provided they are disclosed at a time and in a manner that a consumer would be likely to notice them. The offering statement or "offering plan" required by section 352-e of the General Business Law (GBL) for membership in a homeowners association or other property owners association (HOA) that meets the requirements set forth below is subject to this Part, Newly Constructed, Vacant or Non-Residential Homeowners Associations. In many states, that information is shared through a disclosure form, where a homeowner outlines details about the house. Similarly, although 1026.5(b)(2)(ii)(B)(2) applies to open-end consumer credit accounts in these circumstances, 1026.5(b)(2)(ii)(B)(2)(ii) does not prohibit a creditor from continuing treating prior payments as late during the 14-day period following mailing or delivery of a periodic statement. An owner of an apartment complex pays $100 to each tenant that refers a person who becomes a tenant. The creditor normally may rely on the representations of other parties in obtaining information. The reasonably available standard requires that the creditor, acting in good faith, exercise due diligence in obtaining information. (d) Multiple creditors; multiple consumers. 4. For accounts under an open-end consumer credit plan, a creditor must adopt reasonable procedures designed to ensure that: (1) If a grace period applies to the account: (i) Periodic statements are mailed or delivered at least 21 days prior to the date on which the grace period expires; and. For example, when the terms appear as part of the explanations required under 1026.6(a)(1)(iii) and (a)(1)(iv), they may be equally conspicuous as the disclosures required under 1026.6(a)(1)(ii) and 1026.7(a)(7). Disclosure responsibilities are not satisfied by giving disclosures to only a surety or guarantor for a principal obligor or to an authorized user. 3. Section 1026.5(b)(2)(ii)(B)(1) does not require the creditor to provide a grace period or prohibit the creditor from placing limitations and conditions on a grace period to the extent consistent with 1026.5(b)(2)(ii)(B) and 1026.54. He has two sales associates, Betty Able and John Stone. Nothing in this chapter shall preclude a seller from using a form of property disclosure statement that contains additional provisions that require greater specificity or that call . What is the value of the property? 1026.32 Requirements for high-cost mortgages. Creditors must choose which of them will make the disclosures. See interpretation of 5(e) Effect of Subsequent Events in Supplement I, Explore guides to help you plan for big financial goals, Subpart B - Open-End Credit 1026.51026.16, Subpart C - Closed-End Credit 1026.171026.24, Subpart D - Miscellaneous 1026.251026.30, Subpart E - Special Rules for Certain Home Mortgage Transactions 1026.311026.45, Subpart F - Special Rules for Private Education Loans 1026.461026.48, Subpart G - Special Rules Applicable to Credit Card Accounts and Open-End Credit Offered to College Students 1026.511026.61, Supplement I to Part 1026 - Official Interpretations, Official interpretation of 5(a) Form of Disclosures, Official interpretation of Paragraph 5(a)(1)(ii)(A), Official interpretation of Paragraph 5(a)(1)(iii), Official interpretation of 5(a)(2) Terminology, Official interpretation of 5(b) Time of Disclosures, Official interpretation of 5(b)(1)(i) General Rule, Official interpretation of 5(b)(1)(ii) Charges Imposed as Part of an Open-End (Not Home-Secured) Plan, Official interpretation of 5(b)(1)(iii) Telephone Purchases, Official interpretation of 5(b)(1)(iv) Membership Fees, Official interpretation of 5(b)(2) Periodic Statements, Official interpretation of 5(b)(2)(i) Statement Required, Official interpretation of 5(b)(2)(ii) Timing Requirements, Official interpretation of 5(c) Basis of Disclosures and Use of Estimates, Official interpretation of 5(d) Multiple Creditors; Multiple Consumers, Official interpretation of 5(e) Effect of Subsequent Events. Notwithstanding paragraphs i and ii above, a card issuer that replaces a credit card or provides a new account number because the consumer has reported the card stolen or because the account appears to have been used for unauthorized transactions is not required to provide a notice under 1026.6(b) or 1026.9(c)(2) unless the card issuer has changed a term of the account that is subject to 1026.6(b) or 1026.9(c)(2). When changes in a creditor's plan affect required disclosures, the creditor may use inserts with outdated disclosure forms. Brokerage. If there is more than one consumer, the disclosures may be made to any consumer who is primarily liable on the account. What information is NOT required to be included on the brokerage entrance sign? The Maryland Homeowners Association Act controls the creation, authority, operation, and management of homeowners associations in the state. 4. B. See comment 7(b)-1.iv. If youre thinking about selling your home, you may be wondering what to tell prospective buyers about that water leak you had last year or that DIY repair you made a while back. ii. 1026.12 Special credit card provisions. Estimates redisclosure. Talk to an attorney or real estate agent about how to avoid negative outcomes in the disclosure process. The terms need not be more conspicuous when used for periodic statement disclosures under 1026.7(a)(4) and for advertisements under 1026.16. Creditors institute a delinquency collection proceeding by filing a court action or initiating an adjudicatory process with a third party. Paying for repairs:Even after closing, you may be required to go back and pay for repairs on the property related to the known defect. You can also apply $10,000 of any unused portion of the homestead exemption towards any property you own using a " wildcard exemption ." For example, let's say your house is worth $100,000. If your disclosure statement includes lead paint, make sure the disclosures are signed, and keep copies for at least three years. (iii) Telephone purchases. Which legal description contains 2.5 acres? Some states are incredibly strict about seller disclosures, while others have so few regulations, buyers are pretty much purchasing at their own risk. Appendix A to Part 1026 Effect on State Laws, Appendix B to Part 1026 State Exemptions, Appendix C to Part 1026 Issuance of Official Interpretations, Appendix D to Part 1026 Multiple Advance Construction Loans, Appendix E to Part 1026 Rules for Card Issuers That Bill on a Transaction-by-Transaction Basis, Appendix F to Part 1026 Optional Annual Percentage Rate Computations for Creditors Offering Open-End Credit Plans Secured by a Consumer's Dwelling, Appendix G to Part 1026 Open-End Model Forms and Clauses, Appendix H to Part 1026 Closed-End Model Forms and Clauses, Appendix J to Part 1026 Annual Percentage Rate Computations for Closed-End Credit Transactions, Appendix K to Part 1026 Total Annual Loan Cost Rate Computations for Reverse Mortgage Transactions, Appendix L to Part 1026 Assumed Loan Periods for Computations of Total Annual Loan Cost Rates, Appendix M1 to Part 1026 Repayment Disclosures, Appendix M2 to Part 1026 Sample Calculations of Repayment Disclosures, Appendix N to Part 1026 Higher-Priced Mortgage Loan Appraisal Safe Harbor Review, Appendix O to Part 1026 Illustrative Written Source Documents for Higher-Priced Mortgage Loan Appraisal Rules, Comment for 1026.1 - Authority, Purpose, Coverage, Organization, Enforcement and Liability, Comment for 1026.2 - Definitions and Rules of Construction, Comment for 1026.5 - General Disclosure Requirements, Comment for 1026.6 - Account-Opening Disclosures, Comment for 1026.8 - Identifying Transactions on Periodic Statements, Comment for 1026.9 - Subsequent Disclosure Requirements, Comment for 1026.11 - Treatment of Credit Balances; Account Termination, Comment for 1026.12 - Special Credit Card Provisions, Comment for 1026.13 - Billing Error Resolution, Comment for 1026.14 - Determination of Annual Percentage Rate, Comment for 1026.15 - Right of Rescission, Comment for 1026.17 - General Disclosure Requirements, Comment for 1026.18 - Content of Disclosures, Comment for 1026.19 - Certain Mortgage and Variable-Rate Transactions, Comment for 1026.20 Disclosure Requirements Regarding Post-Consummation Events, Comment for 1026.21 - Treatment of Credit Balances, Comment for 1026.22 - Determination of Annual Percentage Rate, Comment for 1026.23 - Right of Rescission, Comment for 1026.26 - Use of Annual Percentage Rate in Oral Disclosures, Comment for 1026.27 - Language of Disclosures, Comment for 1026.28 - Effect on State Laws, Comment for 1026.30 - Limitation on Rates, Comment for 1026.32 - Requirements for High-Cost Mortgages, Comment for 1026.33 - Requirements for Reverse Mortgages, Comment for 1026.34 - Prohibited Acts or Practices in Connection With High-Cost Mortgages, Comment for 1026.35 - Requirements for Higher-Priced Mortgage Loans, Comment for 1026.36 - Prohibited Acts or Practices and Certain Requirements for Credit Secured by a Dwelling, Comment for 1026.37 - Content of Disclosures for Certain Mortgage Transactions (Loan Estimate), Comment for 1026.38 - Content of Disclosures for Certain Mortgage Transactions (Closing Disclosure), Comment for 1026.39 - Mortgage Transfer Disclosures, Comment for 1026.40 - Requirements for Home-Equity Plans, Comment for 1026.41 - Periodic Statements for Residential Mortgage Loans, Comment for 1026.42 - Valuation Independence, Comment for 1026.43 - Minimum Standards for Transactions Secured by a Dwelling, Comment for 1026.46 - Special Disclosure Requirements for Private Education Loans, Comment for 1026.47 - Content of Disclosures, Comment for 1026.48 - Limitations on Private Education Loans, Comment for 1026.52 - Limitations on Fees, Comment for 1026.53 - Allocation of Payments, Comment for 1026.54 - Limitations on the Imposition of Finance Charges, Comment for 1026.55 - Limitations on Increasing Annual Percentage Rates, Fees, and Charges, Comment for 1026.56 - Requirements for Over-the-Limit Transactions, Comment for 1026.57 - Reporting and Marketing Rules for College Student Open-End Credit, Comment for 1026.58 - Internet Posting of Credit Card Agreements, Comment for 1026.59 - Reevaluation of Rate Increases, Comment for 1026.60 - Credit and Charge Card Applications and Solicitations, Comment for 1026.61 - Hybrid Prepaid-Credit Cards, Comment for Appendix A - Effect on State Laws, Comment for Appendix B - State Exemptions, Comment for Appendix C - Issuance of Official Interpretations, Comment for Appendix D - Multiple-Advance Construction Loans, Comment for Appendix F - Optional Annual Percentage Rate Computations for Creditors Offering Open-End Credit Plans Secured by a Consumer's Dwelling, Comment for Appendix G - Open-End Model Forms and Clauses, Appendices G and H - Open-End and Closed-End Model Forms and Clauses, Comment for Appendix H - Closed-End Forms and Clauses, Comment for Appendix J - Annual Percentage Rate Computations for Closed-End Credit Transactions, Comment for Appendix K - Total Annual Loan Cost Rate Computations for Reverse Mortgage Transactions, Comment for Appendix L - Assumed Loan Periods for Computations of Total Annual Loan Cost Rates, Comment for Appendix O - Illustrative Written Source Documents for Higher-Priced Mortgage Loan Appraisal Rules. Section 1026.5(b)(2)(ii)(B)(1) applies if an account is eligible for a grace period when the periodic statement is mailed or delivered. ii. Caveat emptor means buyer beware. In Alabama, Arkansas, North Dakota, West Virginia and Wyoming, the seller has no legal obligation to disclose anything about the physical condition of the home, but there can be a few exceptions: Its also worth noting that real estate agents who belong to professional organizations in caveat emptor states (and other states) may be held to higher ethical disclosure standards, which can mean that sellers may end up disclosing issues anyway, even if state law doesnt specifically require it. Right of survivorship is contained in which tenancy? Because 1026.7(b)(11)(ii) provides that 1026.7(b)(11)(i) does not apply to periodic statements provided solely for charge card accounts other than covered separate credit features that are charge card accounts accessible by hybrid prepaid-credit cards as defined in 1026.61, 1026.5(b)(2)(ii)(A)(1) also does not apply to the mailing or delivery of periodic statements provided solely for such accounts. The only law thats applicable across all 50 states is the requirement to disclose the. - If spouse and no children. Assume that, for an account under an open-end consumer credit plan that does not provide a grace period, a periodic statement mailed on September 10 states that a required minimum periodic payment of $100 is due on September 24.
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