Prohibition on Certain Down Payment Assistance Programs Changes
to Federal Law regarding FHA Loans Subsection (b)(9)(C) has been
added to 12 U.S.C. 1709 to provide:
(C) PROHIBITED SOURCES.—In no case shall the funds required by
subparagraph (A) consist, in whole or in part, of funds provided by
any of the following parties before, during, or after closing of the
property sale:
(i) the seller or any other person or entity that financially
benefits from the transaction.
(ii) Any third party or entity that is reimbursed, directly or
indirectly, by any of the parties described in clause (i).
The funds required by subparagraph (A) are the down payment funds –
previously 3%, now 3.5% -- required on FHA loans.
October 1, 2008
(1 page, PDF)
Age-restricted Communities Have a New Recording Requirement
The State of
New Jersey has enacted legislation to require a special
certification whenever a deed of real property in an age -restricted
community is presented for recording in a County land records
office.
September 16,
2008 (1 page, PDF)
The State of New Jersey Has Posted New Forms to its Division of
Taxation Website
The State of
New Jersey has posted to its Division of Taxation website new
versions of the following two (2) forms:
1. RTF-1 (Rev. 7/08), Affidavit of Consideration for Use by Seller
2. RTF-1EE (Rev. 7/08), Affidavit of Consideration for Use by Buyer
The changes to these two forms are not substantive in nature, and
are instead technical revisions to the phrasing of Civil Union
references. The revised forms are below and also available from our
resources page.
RTF-1 (Rev. 7/08), Affidavit of Consideration for Use by Seller
RTF-1EE (Rev. 7/08), Affidavit of Consideration for Use by Buyer
September 15,
2008
ISRA Applicability Service to be Discontinued
This was recently released by the NJ DEP: Due to budgetary
constraints and a focus on required services, the Department's Site
Remediation Program will discontinue the issuance of applicability
determinations pursuant to ISRA on April 30, 2008. Applications for
applicability determinations (more commonly known as LNA's) received
after April 30th will be returned unprocessed. For assistance in
determining ISRA applicability, please see the article "How to
Determine if ISRA Applies to You" posted on the ISRA home page
http://www.nj.gov/dep/srp/isra/ .
SUPREME
COURT REVIEWS AND CLARIFIED OPINION 710 HOLDING: ACPE
Opinion 710 provides that fraudulent transactions by attorneys in
connection with real estate closings will violate the Rules of
Professional Conduct. The opinion does not suggest that
disclosed seller's concessions are, in and of themselves, fraudulent
or unethical.
January 6,
2008 (4 pages, PDF)
State of New Jersey Revises GIT/REP-3 Form to Address §1031 Tax-Free
Exchanges
The State of New Jersey, Division of Taxation, has revised the
SELLER’S RESIDENCY CERTIFICATION/EXEMPTION form to address the
unique concerns of a seller participating in a tax-free exchange.
Attached to this Bulletin are:
-
SELLER’S
RESIDENCY CERTIFICATION/EXEMPTION, GIT/REP-3 (11-07) (note the
new instructions added to the second page of the GIT/REP-3 on
the handling of tax-free exchanges), and
-
Memorandum
dated November 16, 2007 from the Acting Director of the Division
of Taxation addressing the §1031 issues.
The revised
SELLER’S RESIDENCY CERTIFICATION/EXEMPTION form is available on
our website under our heading Resources,
subheading Forms. As always, if you have any questions regarding
this Two Rivers Title Bulletin, please do not hesitate to contact us
at 732-747-3615.
December 3,
2007 (1 page, PDF)
Bulletin: IRS System Error - Invalid Lien Releases
Two Rivers Title has
recently learned that, due to an Internal Revenue Service (IRS)
system error on August 5, 2007, invalid lien releases were sent
to an unspecified number of taxpayers. This issue impacts all
states and is not limited to one geographic area. The IRS was
able to stop the shipment of releases that would otherwise be
sent to the local recorder’s office, but could not stop the
shipment of the taxpayer’s copy.
October
16,
2007 (1 page, PDF)
In Re: Connors, No 06-3321 (3rd Circuit Court of Appeals)
3rd U.S. Circuit Court of Appeals Rules Time to Cure Home Mortgage
Default Ends At Auction:: In a precedential decision, the 3rd U.S.
Circuit Court of Appeals held that the right to cure ends when the
property is sold at auction, rejecting the owner's argument that it
continues until the deed is delivered to the purchaser. The case resolves
a more than decade-old split among federal bankruptcy and district judges
in New Jersey.
September 13,
2007 (15 pages, PDF)
CIVIL UNION LAW EFFECTIVE
February 19, 2007
Assembly Bill
A3787 was enacted into law on December 21, 2006, and becomes
effective February 19, 2007. This new law implements the mandate
of the New Jersey Supreme Court that our Legislature guarantee
equal protection under law to all persons, by affording the same
rights and benefits to same-sex couples as are provided to
heterosexual couples through the institution of marriage. The new
law surveys New Jersey statutes comprehensively and makes
appropriate amendments and supplements to put formally-recognized
same-sex couples on an equal footing with married couples under
law. This extends to Real Estate and Probate matters.
February
19, 2007 (1 page, PDF)
1099-S
Certification for No Reporting On Principal Residence
The
“Certification for No Information Reporting on the Sale or
Exchange of a Principal Residence” form and procedures have been
changed by IRS Revenue Procedure 2007-121 effective January 22,
2007. Questions 5 and 6 have been added to the certification so
that the form corresponds to changes made to Internal Revenue Code
Section 121 in 2004 and 2005. Section 121 generally provides for
the exclusion of gain in the amount $250,000 ($500,000 if married
filing jointly) on the sale of a personal residence provided owner
has used it as a residence 2 of the last 5 years. The changes to
section 121 provide that the exclusion does not apply if the
principal residence was acquired in a 1031 likekind exchange
within the prior 5 years.
February
20, 2007 (1 page, PDF)
New
Realty Transfer Fee Registration Eliminate the Exemption for
Nominal Consideration Deeds Between Related Entities:
The New
Jersey Administrative Code was amended in September by the
adoption of Rules found at N.J.A.C. 18-16 pertaining to the Realty
Transfer Fee (hereafter called the “RTF”). These Regulations (www.state.nj.us/treasury/taxation/pdf/lpt/regs/reg1816.pdf.
) largely reflect the common practice and understanding of how the
RTF applies to sellers on deed transfers of real property (note:
there was no discussion of any “Mansion Tax’ issues). The
Regulations make an important change in the classes of
transactions that are eligible for exemptions, by taking the
position that transfers between related entities are NOT
eligible for the nominal consideration exemption.
January 22, 2007 (1
page, PDF)
Hopkinson v. Bd. Of Adj. Of the Borough of Kinnelon et. al., App. Div.
(per curiam), August 30, 2006:
LAND USE – MERGER OF PROPERTY
Since the
undisputed facts show that merger of the two back-to-back lots that
front on different streets would not further the purposes of the
merger doctrine since it would not cause the property to meet the
zoning laws or bring the property into conformity, the trial court
erred in reversing the Board of Adjustment and finding that the two
lots in question had merged by application of law.
August 30, 2006 (1
page, PDF)
TRT Bulletin: Revised Forms Available for
“Mansion Tax” on Commercial Properties: August 1, 2006:
REVISED FORMS FOR COMMERCIAL PROPERTY MANSION TAX
The revisions to
the Buyer’s Affidavit (RTF-1EEE, Rev. 8/2006, Affidavit of
Consideration for Use by Buyer) as well as the Seller’s Affidavit
(RTF-1. Rev/ 8/2006, Affidavit of Consideration for Use by Seller),
require Municipal Codes and Equalized Assessed Valuations. You may
find a copy of the new forms in the Forms section of the Resources
page of our website at
www.tworiverstitle.com .You may find a copy of the Municipal Codes
on the
www.tworiverstitle.com
under the heading Resources,
subheading Documents. For the Equalized Assessed Valuations that may
be considered for Class 4A commercial properties, you can go to page
252-255 of the 2006 New Jersey Lawyers Diary and Manual under the
subheading “New Jersey Real Estate Tax Rates by Counties” where the
second column after each taxing district is the County
Equalization-Average Ration of Assessed to True Value of Real Property
or go to
www.tworiverstitle.com under the heading Resources, subheading
Useful Links.
“Mansion Tax” Extended to Commercial Properties: Effective August 1,
2006
COMMERCIAL PROPERTY MANSION TAX
The latest resolution of New Jersey’s budget craze has extended the
“Mansion Tax” to commercial properties. On July 8, 2006, Governor Jon
Corzine signed into law Assembly Bill No. 4701, which states:
Assembly Bill No. 4710 (ACS), as amended, imposed upon the
grantee(buyer) of commercial real property . . . , for consideration
in excess of $1 million, a fee for the recording of the deed separate
from the realty transfer fee imposed on the grantor (seller) equal to
1 percent of the full amount of the consideration paid. Class 4A
“commercial properties” are any kind of income-producing real property
other than property classified as vacant land, residential property,
farm property, industrial properties, and apartments.
July 8, 2006 (1 page, PDF)
Kielty etc. v. Arena, etc., HNT-C-014046-05, Chancery Div. -Somerset,
Hunterdon and Warren Counties
DISCHARGE OF MORTGAGES ; ESTATES:
The Court granted a
motion to discharge a mortgage based on a showing of “special
circumstances,” pursuant to N.J.S.A. 2A:51-1, which requires a
plaintiff to (a) present satisfactory proof that the mortgage has been
paid in full; or (c) present such special circumstances as to satisfy
the court that the mortgagor no longer has an interest in the
mortgage.
March 17, 2006 (7 pages, PDF)
Highland Lakes Country Club & Community Association v.
Franzino,
A-1324-03T2 (N.J. Super. App. Div. 2004) (Unpublished)
COMMON INTEREST COMMUNITIES -- RESPONSIBILITY FOR ARREARS OF PRIOR
OWNER
The Court
considered whether a common-interest community may compel a current
homeowner to pay arrears attributable to prior owners of the property
pursuant to the community associations recorded bylaws. Lower court
held that the current owner was liable to pay arrears accrued by any
prior owner. The appellate court overturned the lower court’s
decision stating that the bylaws
were ambiguous as to whether a current owner is liable for arrearages
created by a predecessor owner and therefore the current owner is not
liable.
December 15, 2005 (1 page, PDF)
Davis v.
Strazza, 380 N.J. Super. 476, 882 A.2d 980 (App. Div. 2005)
CONTRACTS; MORTGAGE CONTINGENCIES:
A mortgage commitment that lists, as a condition to satisfying the
mortgage, that the applicant must sell an existing home is not
considered a "firm" commitment. Thus, if the mortgage contingency
clause in the contract is based on the buyer obtaining a "firm,"
commitment, then it has not been satisfied.
October 4, 2005 (Synopsis 1 page, PDF) (
Rutgers Law Library)
