Septic

            “Pay now or pay later.” That was a famous Midas Muffler commercial slogan. It also applies to real estate transactions.

            One home buyer (“Betsy”) was told by the real estate agent that the home had a septic system. Two (2) years after the purchase, the next door neighbor (“Fred”) was banging on Betsy’s front door demanding that Betsy pay Fred for half of the cost to repair the septic system. For the first time, Betsy found out that she did not have a septic system on her property. Fred then cut off Betsy’s use of the septic system, causing flooding of sewage into Betsy’s home, ruining her wood floors and causing Betsy plenty of grief.
            Betsy had a home inspection before buying. The home inspector probably just flushed the toilets for the extent of his sewerage inspection. Betsy should have obtained a separate septic tank inspection. Then the septic tank inspector would have looked for the septic tank and discovered it was not on Betsy’s property.
            After Betsy came to see me, I thought to look for an easement that may have given Betsy the right to use the septic system on the neighbor’s property. Betsy did not have her Owner’s Policy of Title Insurance, so I ordered the policy from the closing agent. There it was – a Declaration of Restrictions requiring the home owner and the neighbor to obtain a maintenance contract with a third party approved by the Department of Environmental Protection to regularly inspect the septic system.

Why did the closing agent, a law firm, not review with the home buyer the exception in the title policy for the Declaration of Restrictions so the new homeowner would then at least know she did not have her own septic system? That is why home buyers and buyers of commercial property need to understand the need for and the language in title policies. That is also why home buyers and buyers of commercial property need to have their own attorney knowledgeable in real estate transactions to review the (a) contract before signing it, (b) the title Commitment, and (c) the closing documents. For an explanation of a title Commitment, see my Article titled “Is the High Bid the Real Price” posted November 16, 2011.

                                                                                                                                                                                               

Michael S. Price, Esq., Florida Supreme Court Certified Circuit Civil Mediator, 1616 Jork Rd., Suite 102, Jacksonville, FL 32207; telephone (904) 396-4445; e-mail mprice@michaelpricelaw.com. Michael S. Price focuses on disputes related to divorce, criminal law, real estate, contracts, construction, leasing, foreclosure, property defects, binder deposits, probate, family owned property and disputes related to business, partnerships and shareholders.                  

Does a Successful Relationship Require a Control Burn?

            "The first thing we do," said the character in Shakespeare's Henry VI, is "kill all the lawyers." How many times have we all heard people say they hate lawyers? Of course, they hate lawyers - until they need one. Divorce lawyers are plentiful, so apparently a lot of people need them. How can the supply of lawyers, particularly divorce lawyers be reduced? The simple answer is to reduce the demand for lawyers. So, how can the demand for divorce lawyers can be reduced by a reduction in divorces?
             One gentleman who has been married for 50 years said that his successful marriage was due to the disputes he and his wife had and that they talked through. Invariably, the wife was happy each time just at having had the the talk, even though it was a dispute. The husband was just happy that his wife was satisfied.
             This "confrontational communication" is a controlled conflict or “controlled burn”, which may lessen the incidents of uncontrolled conflict between spouses. This also applies to unmarried parties in a relationship. The controlled burn is like a controlled burn in a forest, which is designed to lessen the chances of a major fire. Deliberately setting organized, planned fires in a contained area of the forest to prevent an out-of-control fire with extensive damage may be a good metaphorical lesson for the success of a marital or other personal relationship.
           The gentleman's solution describes “strategic conflict” as the method of timing conflict in a personal relationship to release silent friction in the relationship. Friction is brewing below the surface most of the time - it is just a matter of degree. Once that degree reaches the boiling point, then the communication is uncontrolled, explosive and counter-productive, often leaving permanent resentment and scars. The scars can last through the current relationship, and even into future ones with a short fuse or preconceived ideas of the new love interest, such as lack of trust.

            What are your thoughts about timing conflict, whether you need it or not?

                                                                                                                      

Michael S. Price, Esq., Florida Supreme Court Certified Circuit Civil Mediator, 1616 Jork Rd., Suite 102, Jacksonville, FL  32207; telephone (904) 396-4445; e-mail mprice@michaelpricelaw.com. Michael S. Price focuses on disputes related to divorce, criminal law, real estate, contracts, construction, leasing, foreclosure, property defects, binder deposits, probate, family owned property and disputes related to business, partnerships and shareholders.

Mediation 101

            Mediation may be ordered by the court or voluntary. Court ordered mediation is described in Florida Statutes Chapter 44, titled “Mediation Alternatives to Judicial Action”.      “Mediation” means a process whereby a neutral third person called a mediator acts to encourage and facilitate the resolution of a dispute between two or more parties. It is an informal and non-adversarial process with the objective of helping the disputing parties reach a mutually acceptable and voluntary agreement. In mediation, decision-making authority rests with the parties. The role of the mediator includes, but is not limited to, assisting the parties in identifying issues, fostering joint problem solving, and exploring settlement alternatives.” F.S. §44.1011 (2).   

        All mediation communications are confidential, with certain exceptions. F.S. §44.405. Some of the exceptions to the confidentiality include criminal activity, abuse, neglect or exploitation of children, disabled adults or the elderly, professional malpractice, and voiding or changing the settlement agreement. The specific circumstances and limitation of these exceptions are set out in F.S. §44.405(4)(a). A violation of the confidentiality rules can result in equitable relief, compensatory damages, and attorney’s fees and costs. F.S. § 44.406.

            Mediation is an opportunity for the parties to self-determine an outcome and eliminate the risk that the court rules unfavorably for one of the parties. With crowded court dockets, mediation allows the parties to reach a settlement much sooner than waiting for a trial. Mediation reduces the economic fallout from attorney’s fees and court costs that no longer accrue after the case is settled. The cost of mediation is often split between the parties, thus making mediation a very cost-effective option to reach a resolution of the dispute so the parties can devote their mental energy and financial resources to more productive activities.            Copyright 2010

            For questions or comments on the use or selection of a Florida Mediator, contact Michael S. Price, Esq., Florida Supreme Court Certified Circuit Civil Mediator, 1616 Jork Rd., Suite 102, Jacksonville, FL  32207; telephone (904) 396-4445; e-mail mprice@michaelpricelaw.com. Michael Price focuses on disputes related to real estate, contracts, construction, leasing, foreclosure, property defects, binder deposits, probate, family owned property and disputes related to business, partnerships and shareholders.

Is the high bid the real price?

Liens in the “fine print”

Thousands of distressed and foreclosed properties are being sold at auction.  There are very expensive pitfalls in buying property through auction. The auction company often posts on the internet a Preliminary Title Report along with the contract form and disclaimers and disclosures.

In one case, I looked at the Preliminary Title Report. The Preliminary Title Report is a Commitment to Insure Title, which is promise by a title insurance company to issue a Policy of Title Insurance after the closing to protect the buyer from liens that should have been paid off before closing or defects in the title. Never purchase real estate without the contract requiring a Policy of Title Insurance.

The Preliminary Title Report  in this instance showed exceptions for City of Jacksonville liens. I also looked at the contract form, which said that the title and title insurance would be subject to any exceptions shown in the Preliminary Title Report. One matter shown as an exception was a fine since January 5, 2010 of $50 per day, which would have been $18,250 within just a couple months after the auction! The unsuspecting high bidder will have to pay off that lien before selling the property, adding significantly more price than expected.    

When looking at properties to buy at auction, carefully read the Preliminary Title Report (also known as the Title Commitment). This is very informative, and you will become a savvy investor. Also, get a copy of all the documents listed on the Exceptions portion of the Title Commitment. There are 3 parts to Preliminary Title Report (Title Commitment): (1) Schedule A, which identifies the proposed buyer, the current owner, and the legal description of the property; (2) Schedule B-1, which shows the requirements to be satisfied before the title insurance company may issue a title insurance policy; and (3) Schedule B-2, which shows the exceptions to the title insurance policy, just like exclusions in a health insurance policy.

                                                                                                                       

For any questions or clarification, contact attorney Michael S. Price, Esq.,

telephone (904) 396-4445, website http://www.michaelpricelaw.com/. Michael S. Price, Esq. is a Florida Supreme Court Certified Circuit Civil Mediator, located at1616 Jork Rd., Suite 102, Jacksonville, FL 32207; telephone (904) 396-4445; e-mail mprice@michaelpricelaw.com. Michael S. Price focuses on disputes related to divorce, criminal law, real estate, contracts, construction, leasing, foreclosure, property defects, binder deposits, probate, family owned property and disputes related to business, partnerships and shareholders.