Archive for the 'Laws' Category
City Plans are Important because they can increase kindness
Today’s lesson began with a brief history of how the “states have become slaves to the Federal government”. Once our instructor finished with his conservative rant, he went on to describe the police power which states hold over counties, and county-city relationships.
Sadly the lesson got a bit boring as we covered a lot of zoning issues, laws, and learned how cities in other states can take your land away to make room for such city necessities as a Walmart.
Cities must have a Master Plan in order to incorporate county land into an organized city.
Utah County has seen the establishment of Eagle Mountain, Cedar Hills, and Saratoga Springs all within the past decade.
Each city’s plan must address:
-Land Use
-Housing Needs
-Movement of People and Goods
-Community Facilities and Utilities
-Energy Conservation.
While discussing each of these in detail, our teacher shared with us that he had noticed that Spanish Fork is intending to build a commercial airline here in southern Utah. This would trump Provo Utah’s current attempt to open a commercial airport, which has been slow in coming about due to lack of land. Airports mean money to cities, as things such as Rental cars bring in huge amounts of taxes.
He then warned that water is a serious issue here in the west, with only a select number of cities (Provo and Orem) actually possessing enough water for their populations. All water rights in Utah are already owned in some form.
Our instructor then shared his opinion that California should cede its rights to the Colorado river and get their water from the ocean. While that would be incredibly noble of California I personally don’t imagine that happening.
Most city websites share their comprehensive plans online, including codes and city regulations.
We were then shown the Orem City Plan, and shown one unique aspect of the plan dealing with Student Housing. Most cities do not address such, but with two Universities at close proximity, this is a major issue for Orem.
One of the other somewhat humorous parts of the plan, besides the constant rhetoric about how the city of Orem hopes to do nothing but good, was Orem’s designed plan to integrate their motto “Family City USA” in all city projects, signs, and references to Orem, to provide good housing to everyone and also to be kind. Orem (Family City USA) can be silly.
We then went through maps of all the cities with Utah County, with the teacher explaining that Draper has crawled into Utah county, though it finds itself unable to share sewer lines with any other city in Utah County. Cities such as Orem (Family City USA) do not appreciate cities in other counties annexing Utah county land. They do not show kindness to that.
Counties can occur as an islanded area surrounded by city limits. This occurs when other areas of the county ask a city to be annexed, but the remaining area does not. Cities on the other hand, cannot annex islands unless they already exist surrounded by the city itself. As long as the land is not annexed by a city, it remains part of the county.
Zoning ordinances restrict use of land and structures within designated zones:
These provide for:
-Permitted Uses
-Building Height
-Lot Sizes
-Setbacks
-Style and appearance of structures
-Density
-Protection of Natural Resources
Zoning Restrictions are in place in order to meet certain objectives:
-Residential, commercial, industrial, agricultural and multiple use.
-To establish buffer zones
-Bulk Zoning to control density
-Aesthetic zoning to control neighborhood appearances.
-Incentive zoning which is meant to encourage neighborhood improvement.
The mention of Incentive zoning brought about a story about a relative of the instructor who was working with two brothers who wanted to develop a supply warehouse for various hotels in need of food supplies. He found an area where several freeways crossed that he judged to be ideally located, so he contacted the city manager who he knew (always a big plus if you plan on development), and received funding from the city of Las Vegas to exercise eminent domain, and seize the homes by paying ‘fair market value’ in order to put up their new warehouse. Essentially, Las Vegas bought the land for the new food warehouse for this relative. They tore down people’s homes to make room for a warehouse.
Eminent domain has been used he in Utah for some time. State Street in Utah used to be the only main highway, but some time ago as the government put up the Interstate freeway system, many land owners lost their land, and often had their farms cut in half in order to put up the highway. This was explained as being a good and necessary use of eminent domain. I’d imagine the farmers who lost their farms would disagree.
Our instructor shared, that Utah has recently passed a law restricting the use of eminent domain to only public development.
This will hopefully limit the abuse that can run rampant when private groups are able to convince a city to exercise eminent domain in order to fund the private projects.
Complaints regarding a zoning issue are addressed at a zoning hearing board.
This brought about a discussion of Nonconforming use, which applies to properties which once conformed with zoning requirements, and have been grandfathered in as legally zoned, though they could potentially lose their zoning privileges if their use is changed.
For example, a duplex in a neighborhood full of rental properties may be able to continue to be a duplex, even as the zoning changes to prohibit properties from being anything but single unit.
Variances are permanent exceptions to zoning ordinances. They must be requested, and are rarely granted.
Conditional-Use Permits are granted to a property owner to allow a special use judged to be in the public interest. These are generally temporary, such as in the case of Firework’s stands.
We then moved on to discussing Subdivision.
A subdivider is someone who purchases acreage and divides into smaller lots for sale.
The Developer is the person who constructs improvements on subdivided parcels.
Utah uses a block based street pattern, often using either a gridiron block system, or a curvilinear system which adjusts to a curved street or river.
Class concluded with a description of Private Land-Use controls, such as CCNRs (Contracts covenants and restrictions) which a developer can create to restrict land usage on the subdivision.
These controls are in place to control and maintain the desirable quality and character of a property.
These can be enacted through deed restrictions, such as an easement.
Restrictive covenants can restrict the type of building on property, the use to which the land may be put, and the type of construction.
The regulation of Land Sales is restricted under the Federal Interstate Land Sales Full Disclosure Act.
This was intended to prohibit subdividers from splitting up land and selling useless land to people in other states, such as swampland. Although such restrictions now exist, it’s still horribly stupid to purchase any real estate without seeing it in person.
Buyer beware on all land marketed in another state. There is a reason why it’s being sold to those who can’t ever reasonably inspect it prior to sale.
Our instructor concluded with a story about how many in Utah suffered some years ago from such scams, with many Utah citizens buying up useless portions of privately owned Florida Swampland.
That did it for the day, and I was grateful to be done. Some of this stuff can be pretty boring.
Reading the Obituaries = Profit
Heading into the third part of this lesson, our instructor told us about a property which he had wanted to buy, but had failed in his attempts to convince the owner to sell it. In his research on the property, he had found that much of the backyard was actually partitioned off by a narrow sliver of land owned by a large university here in Utah. Assuming that he would eventually succeed in purchasing the home, he decided to contact the University and see if they wouldn’t sell him the sliver of land.
Upon contacting the lands administration department of the School, he was delighted to find that the University had recently decided to liquidate some of its land holdings which it deemed to be of little or no value. This sliver of land was considered to be one such holding.
The man in charge of selling off these excess lands asked our instructor to make a fair offer. He thought for a moment, considered that the going price for 30,000 square feet of land at the time was 4 or 5 thousand, and decided to lowball with $500. “Done” came the quick reply, and our instructor stated that in retrospect he wished he had offered $200.
Some time passed, and he still found himself unable to persuade the home owner to sell the property. He moved on to other investments, until he noticed some months later while reading the obituaries (”I read the obituaries because…well I read them” he confessed) that the owner had passed away.
Excited, he called the home and spoke with the daughter who had inherited the property. He offered $30,000 which she laughed at and refused. Some days passed, and he received a phone call from the daughter’s attorney angrily demanding that the parcel of land which our instructor had bought from the University be turned over to the daughter immediately. He threatened to sue, claiming adverse possession. Our instructor explained that he was greatly amused by this, as they hadn’t paid the taxes on the property for all these years, he had.
After some time, he was again contacted by the attorney who had evidently done some more research, and in a calmer tone asked what the property could be purchased for. Our instructor was quick in his reply that he would sell it for the same as he had offered to buy the other property for. “The price is $30,000″. This evidently did not go over too well, and the attorney finally called and claimed that he would be seizing the land under prescriptive easement. This means, that if a piece of land is used by someone else for 20 years, then it reverts to that person’s ownership.
This claim got our instructor worried and he called his attorney to find out what his legal standing was. The lawyer chuckled, and as they discussed it, they found that the home had been owned by the daughter and her family for 19 years and 2 months. The attorney recommended that to avoid a court battle, he just sell it for a fair price, but if not, to at least do something with the land.
And so the instructor told the story to his real estate class, and got some volunteers to help him set up a rudimentary garden on the property. Before doing so, he decided to try and be diplomatic, and called the daughter’s attorney and offered to sell for $12,000. They accepted, and our instructor netted a healthy profit from his brief purchase.
He went on to warn us again that being a landlord can get dirty, telling us how he once had to call the police to have a woman removed from his offices because of a vicious argument they had over a $25 fee. Many in the class appeared appalled that arguments can occur between the landowner and renter. Again, this may explain why most agents have no intention of ever owning more than one property.
The lesson concluded with the definitions of freehold estates:
Fee simple
absolute: Highest form of ownership, no limitations
defeasible: two limitations (special with revertership [sp?]) and (conditions subsequent to with right to reentry)
And:
These definitions were long, and I’d recommend reading wikipedia to get a feel for what they mean.
The lesson concluded with this final bit of advice:
In a community property state like California, you share everything obtained in marriage, but gifts from relatives can be separate. Utah doesn’t do that. That means you may have no claim if your spouse dies with property in their name. Time for me to make that will…
In the second part of the class our teacher moved on to legal descriptions and their meanings.
In Utah, when you receive your property tax notification at the end of the year, it has some weird numbers. These specifies the page and book of information pertaining to your property. Fences lead to many disputes, this is because when you build the fence, you frequently build based on the telephone marker, or the grass division. In Utah there is case law on fences, it’s necessary that both owners agree to fence line becoming the recognized property line. If they don’t, and the fence was built wrong, you may find yourself having to move it.
There is an exception, a fence must be in place 20+ years and must be recognized as the division line between the two parties for this time. After the passage of such a period of time, it can be petitioned that the property line be recognized as the fence line.
County records and property lines apply to many real estate transactions. For example locally, the State road commission controls some of the larger roads, and restricts the access given to businesses. This means that even if you own a business bordering one such street, you cannot legally have a driveway feeding into or from the road. The prime reason behind this is the state doesn’t want people driving onto the road, particularly ones with 50 mph speed limits.
In Utah in order to maintain the right to control a road privately, one must chain the road for at least one day a year. Many universities do so on Christmas as a means of limiting the inconvenience caused to students by complying with said requirement.
Interestingly, the state puts fences one foot INSIDE their land along the freeway when bordering private property.
Much of Utah has been divided based on a square system composed of 36 square mile blocks called townships, all numbered based on their distance from the SE corner of temple square in Salt Lake.
Each town square is numbered from the top right something we were reminded would be on the test. Town squares are then separated into increasingly smaller squares using some peculiar forms of measurement:
Links: 7.92 inches
Rods: 16 1/2 feet
Chains: 1660 feet
Class closed up with the teacher telling us that computers had greatly simplified the act of handling land records. Metes and bounds, using degrees were once done by hand with primitive compasses.
His closing words of advice to us were to write everything down, and read everything that’s written in real estate transactions, and finally, we were reminded that it would be our job to catch and fix the errors committed by title companies. He ended class, and proceeded to go to work cleaning that board.
I waited until the class had cleared, and asked for a handout. He kindly handed me one…guess I haven’t been discovered yet!
Title Insurance: Insurance that’ll get you sued
Today’s class was given by a 30 year veteran in the title business. Title offices here in Utah are generally used when one closes on a house, with the buyer and seller both paying a smorgasboard of fees for intangible services such as ‘title insurance‘. When I closed on my house, we paid nearly $1,000 to the title company, prices which most buyers refer to as part of their normal closing costs.
The instructor began by complaining that Utah has some of the cheapest title fees in the nation. He then mumbled: “Some people think there is no money in title research, I think they are wrong.”
We were then given the exciting disclaimer: “Believe it or not this might be interesting…but the topic is boring.” He then started out explaining the bundle of rights which real estate encompasses, and explained how such rights are subject to city, county and federal laws.
I should add, that while this school allows students to choose their own schedules for the most part, they do have a select group of required classes which we must attend, this was one of them. I expect that this is done for the purpose of granting these guest speakers a captive audience. They have a vested interest in us using their services, so they come and speak to the new crop of agents upon whose business they rely upon.
We were told that Utah is unique in that all of it’s records are held by the county. He then surprised my by saying that utahcountyonline is the most advanced land records technology system in the nation. Having used it before to try and look up records, I can testify that the website is by far one of the buggiest databases I’ve ever tried searching. It gives frequent database errors, lacks a uniform method of searching, and is just plain confusing to the average user. “That website gives away all the information I have…anyone using that site can see the same thing I do” he glowed.
He then proceeded to outline how this great newfangled web technology has revolutionized the lands records process telling us hundreds of years ago, just like western movies portray, there was a land records office which was far more confusing and likely led to many gun fights…his hypothetical was interrupted by an elderly woman who stammered “how do they…how do they work if there is more than one land office? I’m so excited…so glad that you’re here.”
Clearly she didn’t catch the end of his hypothetical based upon spaghetti westerns, they gunfighted if there was more than one land office. I swear some people just don’t listen.
Moving on, he told us that out of necessity (or perhaps people got tired of gunfighting) legal descriptions and land records emerged and all real estate began to be done in writing. He then gave the class a handout. Everyone but me. I worried. Were they on to me?
We’re then invited to read through our handouts while he washes the white board. Everyone does so, but I find myself too distracted to bother interrupting and asking for a handout. You see, he was working tirelessly to wash the whiteboard, which was already clear. He spent at least five minutes wetting napkins, rubbing the board, throwing them out then repeating the process. I suppose I have a bit of OCD myself, in that I find it fascinating to see people do pointless things repeatedly because they cannot help themselves. After at least 30 cleanings, he finally seems content and continues teaching.
Or at least he tries to, as he is quickly interrupted by his cell phone going off with a female voice soothing “someone would like to speak with you master…someone would like to speak with you master…” Technology is a great thing.
The instructor then explained title transactions by sharing with us a situation in which he recently been involved. A buyer was in the process of purchasing a large amount of land which brought with it certain water rights, along with an option on purchasing additional water rights for a very hefty price.
Due to an error on the part of the title company, they required the buyer to overpay by purchasing those additional (and in this case unnecessary) water rights for roughly $100,000 too much. He exclaimed that the seller was a lion in sheep’s clothing and that despite his best efforts, they had not been able to convince the seller to return the money. The buyer angrily asked “You can actually go home and sleep and night about this deal?” “Ya, the deals done.” responded the seller. Holy $#!@ the instructor commented.
At this point the class was quite sympathetic, with one student exclaiming “surely you can sue the seller” to which the instructor replied “Oh yeah, I’ve told him we’re going to sue”
Another classmate interjected “but isn’t the title company liable?”
And received the reply “Oh yeah, it’s all my fault.” He stated that although his underwriter would foot the bill for his mistakes, if they did not pursue legal action they could lose their company’s policy and be out of business.
Understandably, this caused the class some level of confusion. Particularly as the teacher continued telling us about another recent transaction in which his partner misread the date on a tax lien and they ended up having to pay the owed taxes after the transaction. He told the class that they were in the process of trying to collect the tax bill from the seller in the transaction, and were again contemplating suing the seller in order to regain the lost $1100. “Oh yeah, that came out of my pocket.”
“I make the deal good” he continued” but if a mistake is made….I go after you…I have the right..I buy the right” He then added “sebredation (sp?) means we can buy their position and sue the crap out of you”.
We were by this time all a little confused. It would appear that title insurance, at least through this man’s company, offers no actual insurance protection. That any mistake made would cause the title company to become litigant against either the buyer, seller, or both. This man had summed up Title Insurance for us. In effect, you pay the title company a large part of your closings costs in order to grant them the right to sue you.
He did admit on smaller errors that “it’s useless to sue…attorney costs $1000, and so I’ve paid lots of stupid little fees…Salt Lake is ridiculous…garbage and stuff…”
He even shared a anecdote about how when he first started contemplating becoming a title agent sharing his plan with his father, who was a normal insurance agent. “I got a job, you don’t do anything”, my dad said, “take it…it’s a racket.”
One of my classmates then raised his hand and asked: “I got a question, I understand title insurance…and it seems you’re saying that the insurance is worthless?”
Our instructor again restated his position, explaining that yes they will pay out when they make mistakes, but that they will go after the buyer or seller to recoup those losses in most cases. He then stated that it was our duty as agents to prevent his mistakes…to read everything and catch them before they happen. So apparently that’s the purpose for being a Real Estate Agent! To cover the Title company’s rear!
You think you own this? You don’t own nothin’
Today we were again warned as the instructor began, that this lesson would be boring. True to his word, he delivered a lesson regarding real estate interests and restrictions. This began with an explanation of PETE.
PETE stands for the the four powers which can interfere with real estate ownership. They are defined as follows:
Police power - Despite the name, this power actually applies to the powers which the local governent receives from the state to protect and enforce the public health, safery and welfare. Under these powers, the city is allows to test your pool water’s PH, or respond to a complaint of Mold to force you to replace your carpet. I had a neighbour growing up who’s yard caused him to experience the police power of the city firsthand. In response to complaints, they were forced to spend a healthy sum cleaning up the jungle that was their backyard. The yard quickly reverted back to it’s grown over state as the years went by. Makes me wonder if it worked out to be cheaper to just let the grass grow and wait until the city intervened instead of going to the hassle of maintaining it. Police power provides the city with the right to enforce zoning, and hopefully to protect city residents from becoming recipients of the federal superfund by doing something stupid like allowing development over a landfill.
Eminent domain - Thanks to the news, most people know that legally, a city can exercise it’s right to eminent domain and condemn a home within city limits assuming it has a valid need to do so, and pays fair market value. Cities rarely condemn, as they don’t want to look evil, recently here in Utah a man painted on his house “The City is Stealing my home”. Papers love to cover such stories and so, at least locally, the city generally pays 1.5 times fair market value in order to avoid trouble.
Taxation: This has been covered in other lessons.
Escheat: If a home is left with no heirs, it goes to the state.
The lesson then delved into estates, and the respective interests offered by each. I’ll go over this in part 2.