Yes, Home Seller, You Should Mention the Snakes!

snakeSometimes the law and ethics match up nicely, other times, not so much. That’s one of the reasons “The Ethicist” column in The New York Times can be both an entertaining and a frustrating read.

A recent column, “You’re Going to Sell Your Home. Should You Mention the Snakes?” provides an example of when the law and ethics line do match up; yet it reflects a total lack of awareness on the questioner’s part that the matter at hand is primarily a legal one.

The basic situation is that the prospective home sellers live in an area with a “snake problem.” About three times a year, they encounter poisonous copperheads, and have been bitten. They worry that if they reveal the snake issue to prospective home buyers, said buyers will go running in another direction.

The Ethicist basically advised speaking up. Otherwise, he explained, the homeowners will have to live with their conscience if the home’s new owners get bitten; and by speaking up, the sellers can help prepare the new owners to avoid snake contact, and thus minimize the risks. Sensible advice.

The Ethicist also got it right when he said, “Your lawyer or real estate agent would be able to tell you whether you have a legal duty in your state to reveal the facts that you have told me.”

But The Ethicist veered a little off course with the statement that, “Scruples like yours help explain why real estate agents don’t like to have the sellers around when they bring in prospective buyers.” The fact of the matter is that, in most U.S. states, both home sellers AND their real estate agents have an obligation to be forthcoming with any known “material” facts that would affect the value or salability of the property.

Most states have created lengthy, detailed disclosure forms that home sellers, and in some cases their real estate agents as well, must fill out. These forms advise prospective buyers of everything from a leak in the roof to a refrigerator with a wiring problem to a crack in the foundation. Few of these forms actually mention snakes; but no matter, most of them have an “other” clause.

Not only that, but it’s often the real estate agent who explains to the home seller that, far from giving in to the urge to hide problems, being forthcoming is a way to inspire trust and to ease negotiations. The buyer is going to be a lot less inclined to close the deal if, while touring the property, he or she runs into a snake or hears about the problem from a neighbor.

Moreover, full and complete disclosures are an important way to avoid later lawsuits. Failing to provide them is its very own “cause of action” (basis upon which to sue) in many states.

That doesn’t mean there aren’t unscrupulous sellers out there. That keeps lawyers and judges busy, with ongoing lawsuits about what the sellers should have disclosed. But for any seller curious about his or her obligations, and wanting to avoid such lawsuits, a good starting point is Nolo’s state-by-state series of articles on what disclosures are legally required.

Another Court Says the Fourth Amendment Doesn’t Apply to Credit Card Swipes

The U.S. Eighth Circuit Court of Appeals is among the latest courts to consider whether the police need a legal justification in order to swipe someone’s credit card. In a June decision, it took the popular view that examining a card in this way isn’t a Fourth Amendment “search.” According to this position, there’s no real difference between looking at the information on the front of a card and using a device to examine the magnetic strip on the back of it. (United States v. DE L’Isle, No. 15-1316 (8th Cir. 2016).)

To the Eighth Circuit and several other courts, an officer doesn’t need a warrant or other legal justification in order to swipe or scan a card. An officer who has legitimately accessed a card—as opposed to one who has, say, arbitrarily stopped someone on the street and snatched the card away—can run it through a machine in order to investigate its legitimacy.

In the case that led to the ruling, law enforcement came by a stack of credit, debit, and gift cards during a search after a traffic-stop-turned-arrest. Suspicious, as they tend to be when encountering big bunches of cards, officers scanned the plastic. The scans confirmed their suspicion of identity theft, exposing the cards as having either stolen information or no account information at all.

For more on the case, including the court’s rationale and potential differences in court rulings on this issue, see Can the Police Swipe or Scan Your Credit Card?

Check Out the Writing-Award Winners From the 2016 National Association of Real Estate Editors’ Conference!

The Annual National Association of Real Estate Editors (NAREE) Conference just concluded in New Orleans, bringing together real estate writers, journalists, and industry experts from around the United States.

As always, the announcements of NAREE’s 2015 journalism and book award winners were event highlights.

Here’s a sampler of the writings that caught the judges’ eyes:

  • Josh Salman, of the Sarasota Herald Tribune, discussed flaws in administration and oversight of the EB-5 investor visa program, which many non-citizens use as a way to get a U.S. green card, in many cases by buying into sometimes dubious real estate investments.
  • Ken Harney, Washington Post Writers Group, revealed “Why an agent might refuse to show a house (the low commission).”
  • Jonathan O’Connell of The Washington Post examined the idyllic plans to upgrade Washington for the 2024 Olympics, and explained why, even without having won, the effort could still transform the city.
  • Emilie Rusch, Denver Post, looked into how legalization of marijuana has gobbled up empty commercial real estate in Denver, Colorado.

sell1_1_1And Nolo picked up an award as well: The book “Selling Your House: Nolo’s Essential Guide,” by Ilona Bray won gold in the annual Robert Bruss competition, which recognizes excellence in books covering the field of real estate.

NAREE’s judges commented that the book is a “clear, thorough handbook on selling a house” and noted that the helpful tips serve as “good preparation for those who may not have been in the market for a while.”

Fewer Employees Will Qualify as Exempt From Federal Overtime Laws Under New Rule

Last Overtime2summer, the Department of Labor (DOL) issued a proposed rule that would increase the minimum salary requirement for workers to qualify as exempt from federal overtime rules. The DOL recently finalized the rule, which will go into effect on December 1, 2016. The DOL estimates that 4.2 million workers will now be eligible for overtime pay as a result of the changes.

Federal law requires employers to pay employees time-and-a-half when they work more than 40 hours in a workweek. However, employers can avoid paying overtime if employees fall within certain exemption categories. Some of the most common exemptions are the “white collar” exemptions for executive, administrative, and professional workers. In addition to meeting other requirements particular to each exemption, these employees must all be paid a minimum salary. The minimum salary has remained at $455 per week (or $23,660 annually) for many years.

Under the new rules, the minimum salary will increase to $913 per week for the white collar exemptions, which is the equivalent of $47,476 per year. The minimum salary will be automatically adjusted every three years, beginning on January 1, 2020, to make sure that it is consistent with increases or decreases in workers’ average weekly earnings in the U.S.

The new rule also increases the minimum salary necessary to qualify for the highly compensated employee exemption. This exemption is reserved for employees who perform office or nonmanual work and perform at least one of the duties required by the executive, administrative, or professional exemptions. The minimum salary will increase from $100,000 to $134,004 on December 1, 2016 and will receive automatic updates every three years as well.

In the past, employers could only count regular wages towards the salary threshold requirement. However, the new rule allows employers to count commissions and nondiscretionary bonuses (bonuses for meeting production goals, for example) towards up to 10% of the salary requirement, as long as such payments are made on at least a quarterly basis.

Charity Navigator Eases Pressure on Nonprofits to Show Minimal Overhead

starsA back-end change to the rating system metrics used by a watchdog organization for nonprofits may not sound like a big deal, or make for snazzy headlines. But the recent announcement by Charity Navigator that it is “upgrading” the way it evaluates charities and ultimately decides how many “stars” each one merits (one a one to four scale) represents a huge change in attitude, and one that will hopefully trickle down through the entire philanthropic community.

The main change to which I’m referring is in the way Charity Navigator will evaluate a nonprofit’s so-called “administrative expenses” going forward.

Currently, only charities that can claim to have no overhead expenses at all can earn Charity Navigator’s top score for that particular measurement, or ten points. Unless yours is an entirely volunteer-run organization, or never has to actually ask donors for financial support or hire people to handle accounting, development, or other management, that’s almost impossible to achieve.

Under Charity Navigator’s newly announced system, a nonprofit can score ten points if it comes within a given range of overhead expenses, taking into account the type of organization.

It’s a change that seems infinitely more realistic. For years, commentators have noted that, while excessive overhead may mean that someone is lining his or her pockets, some level of overhead is a necessary part of simply running an organization. (What for-profit corporation exists without management?!)

A quote in The York Times sums it up nicely: Elizabeth A.M. Searing, assistant professor at the Rockefeller College of Public Affairs & Policy at the University of Albany and a member of the Charity Navigator task force, explains that the change will make it easier for charities to avoid having to “starve themselves” so as not to appear as if they are spending excessively on overhead.