Multi-Family Disclosure

New Connecticut Fair Housing Notice Disclosure for Purchase or Sale of Multi-Family Real Estate

CT Multi-Family Purchase Disclosure Requirement

Connecticut Creates Mandatory Disclosure Place Buyers of Multi-Family Real Estate On Notice of Equal Opportunity Housing Laws

We live in a heavily regulated legal landscape. Often we perform a task we think is relatively simple, but it may expose us to a host of legal issues, some of which we may not even be aware of. However, as the old saying goes, “ignorance of the law is no excuse”.

In an attempt to weed out some of the lack of understanding in housing laws, the Connecticut Senate passed Public Act No. 16-16, AN ACT CONCERNING THE DISCLOSURE OF HOUSING DISCRIMINATION AND FAIR HOUSING LAWS, which went into effect on September 1st, 2016.

The law creates a mandatory disclosure that must be PROVIDED BY THE SELLER and SIGNED BY THE BUYER any time a multifamily property is bought/sold.

What is a Multi-Family Property?

A multifamily property is any piece of residential real estate containing two or more units. These are very popular in cities and big towns such as Danbury, Waterbury, Stamford, Norwalk, etc. They are often bought by real estate investors who rent the individual units out to tenants.

What is in the Multi-Family Disclosure?

The disclosure places the Buyer on notice of State and Federal fair housing laws. It notifies the Buyer that race, color, national origin, ancestry, sex, creed/religion, disability, family status, source of income, sexual orientation, gender identity and expression, age and marital status are all Protected Classes for which it is illegal to discriminate against in the housing market.

Further, it gives examples of fair housing violations based on those protected classes:

  1. Refusing to rent, sell or show the dwelling;
  2. Steering towards certain neighborhoods;
  3. Increasing security deposits;
  4. Requiring “employment” when other legal sources of income exist;
  5. Failure to negotiate or refusal of rent based on source of income;
  6. Refusing to waive “no pet” policies for tenants with disabilities; and
  7. Refusing to allow tenants with disabilities to build a ramp.

What needs to be done with the Multi-Family Disclosure?

Idealy, the Multi-Family Disclosure will be attached by the Seller to the Purchase and Sale Agreement, Exchange Agreement, or Lease with Option to Buy. The Multi-Family Disclosure is then signed by the Buyer when signing the agreement/contract. However, the Public Act specifically protects the validity of Agreements where the Seller does not attach the Multi-Family Disclosure; those contract with still be enforceable.

If the Multi-Family Disclosure is not attached to the contract, it must be signed before or at closing on the multi-family property.

Where Can Realtors and Sellers get a copy of the Multi-Family Disclosure?

The Multi-Family Disclosure can be found on the Commission for Human Rights and Opportunities website, and is also attached hereto in JPEG format.

land record documents

Validation of Defective Documents Recorded on the Land Records

Can Land Records Documents be Valid if Defective?

The land records of a town or county contain the relevant documents in regards to land ownership in the that location. Whenever buying or selling property, a title search must be performed to make sure the seller is giving the buyer clean title. Sometimes during these searches, attorneys come across documents that are defective, or missing something require by Connecticut law to make that document effective. One of the common areas where we have seen this is when individual attempt to create or manage their on trusts, but it happens in other situations as well.

The good news is, Connecticut General Statute 47-36aa can validate certain defects in recorded documents, as long as those documents were recorded 2 or more years earlier and have not yet been challenged in court.

What Kind of Defective Documents Can Be Validated?

CGS 47-36aa, known as the Validating Act, can cure defects in a multitude of common land records documents. The documents which can be validated if defective include:

  • Deeds
  • Mortgages
  • Powers of Attorney
  • Releases
  • Notices of Lease
  • other documents affecting real estate

What Kind of Document Defects Can Be Cured?

When searching land records, it is not simply enough that the document is there. Documents must be drafted in a specific manner, contain specific information, must be executed via specific procedures and be recorded in a specific manner; all of which is regulated by Connecticut law. While it is impossible to go over every type of defect that can occur in land record documents, here are the types of defects that can be cured by the Validating Act:

  • defective or non-existent acknowledgement (the person signing the document did it wrong or forgot to do it)
  • lack of a witness or witnesses
  • missing, incorrect or conflicting dates
  • where a business or trust entity is the grantor, but an individual signs the document in their individual capacity
  • where a business or trust entity is the grantor, but an individual signs without disclosing their authority to sign
  • a document signed under a power of attorney, but signed without referencing the power
  • if a document is signed under a power of attorney which is effective but not recorded until after
  • a document transferring property to a recipient who does not have the legal capacity to hold interest in real estate

What Kind of Defects CAN NOT be Cured?

The validating act does not cure any and all defects in documents that have been recorded yet unchallenged for 2 or more years. The following defects are NOT cured by the Validating Act and therefore make their documents invalid:

  • errors in or missing property description
  • errors in the names of relevant parties
  • Incorrect references in deeds, mortgages and releases (to other land record documents)
  • documents not signed by the original signature of the grantor
  • unrecorded or missing documents
  • defects in foreclosure proceedings
  • gaps in chain of title

How Do You Stop Defective Documents from Being Validated?

If you want to make sure that a defective land records document is not cured and validated, you must challenge the document by bringing a court action and recording a lis pendens within 2 years of the document being recorded.

What is the CFPB Closing Disclosure Addendum to Real Estate Purchase & Sale Contract

What is the CFPB Addendum and Why is it Necessary?

The CFPB Closing Disclosure addendum is a document that is often attached to standard form real estate purchase and sales contracts after October 1, 2015. It became necessary because the CFPB, the Consumer Financial Protection Bureau, passed TRID, TILA RESPA Integrated Disclosures, a law that changed the settlement practices for real estate purchases and sales.

The purpose of the CFPB Addendum is to set forth the respective responsibilities of Buyer and Seller, and to specify the consequences of failure to comply.

How does the CFPB Addendum modify the Real Estate Purchase and Sale Agreement?

Due to the strict requirements of TRID, lenders for Buyers have strict time line requirements. Since they have to have the Closing Disclosure acknowledged by the Buyer at least 3 business days before closing, most Lenders are requesting final figures from all parties 10 days and sometimes even 14 days before closing.

The CFPB Addendum contains terms that:

  1. Make parties aware that CFPB regulations of the Lender may cause delays ;
  2. Make parties aware that any delay in getting the Lender figures may result in financial hardship for the other party, and lists the information that must provided to the Lender;
  3. Waive any “time is of the essence” requirements in the contract;
  4. Seller to provide figures 10 days before closing or waive their right to collect the adjustments;
  5. Address discrepancies in real estate adjustment figures;
  6. Seller agrees to meet Buyer requirements for any discovered condition issues during walk through;
  7. Waive any Seller damages that may result from Closing Disclosure acknowledgement delays.

It should be noted that the CFPB Addendum is heavily in favor of the Buyer and drafted against the Seller. It protects the Buyer from Seller delays and Protects the Buyer from Lender delays, however, it places the burden of Buyer or Lender delays on the Seller without compensation.

ct real estate title law

2016 Connecticut Law Changes How A Trust Handles Real Estate

Trusts and Real Estate Conveyance

Trusts can be used for a variety of purposes in estate and wealth planning. A common use for a Trust is to hold real estate property. Whether holding the real estate is the sole purpose of the Trust, or just one of the assets with which the Trust is funded, the real estate must be conveyed into the Trust, and one day the property may be sold and will need to be conveyed out of the Trust to a Buyer.

The Current Law for Conveying Real Estate into a Trust

Currently, the law regulating transfers of real estate property into a Trust holds that a Deed conveying real estate to a Trust directly does not convey good title because a Trust does not have the capacity to hold title to land. In order to properly convey title the Deed must name the Trustee of the Trust as the “Grantee”, or individual receiving the property. The idea here being that the Trustee is holding and caring for the property on behalf of the Trust.

If the property is in fact conveyed to a Trust directly, it is not validated until 2 years have passed without issue.

When it came time to transfer the property out of the Trust, once again the Trustee would be needed, but it is in fact the Trustee who is holding the property.

New Law Takes Effect October 1, 2016

Coming into effect this October is Public Act 16-194 which changes the procedure for transferring real estate property into a Trust. The Act reads:

“Any conveyance of an interest in land to a trust rather than the trustee or trustees of the trust shall constitute a valid and enforceable transfer of that interest. Any conveyance by the trust, which conveyance is signed by a duly authorized trustee of such trust, shall be treated as if the conveyance was made by the trustee.”

The new law should resolve any confusion or problem when transferring property into or out of a trust by allowing the trust, and therefore any trustee, to convey the real estate.

tree over fence

Trees and Property Lines – My Neighbor’s Tree Is On My Property!

Trees As Encroachment Issues

What Can I Do If My Neighbor’s Tree Is On My Property?

The Tree Problem

A very common type of “encroachment” is when a tree, or any form of vegetation, grows onto or across somebody else’s property. What is an encroachment? An encroachment is like a trespass, but instead of trespassing with one’s body, the trespass is performed with a building, a fence, or for purposes of this article, a tree.

So why is a tree a problem? What can somebody possibly have against plants? Well, plants aren’t always as harmless as they appear. Roots can cause serious damage to foundations, lawns, fences, and drainage systems. Branches can block sunlight, impede construction or break and fall causing damage to whatever is beneath them. Fruit and Berries can fall onto decks and roofs and cause further issues. Finally, there is the ultimate right of a property owner to do what he wishes with his property (within the confines of the law) and not have it affected by the actions or wishes of another.

What Can a Property Owner Do?

So, your neighbor has a giant oak tree growing right against your fence. The branches extend tens of feet over the fence and onto your property. Its roots come up in your lawn, creating tripping hazards all over. In the Fall, it drops acorns and leaves all over your yard. What can you do to stop this nuisance?

Actually, this is one area where Connecticut law allows you to help yourself. You can chop out any roots that are on your property and cut off any branches reaching over your land. Your neighbor may complain but you are still within your legal rights. There are two exceptions, however; (1) You cannot cut down the tree completely or knowingly cause its death and (2) with FRUIT TREES, you cannot cut down the branches or take the fruit. Further, if you cut down somebody else’s tree where you knew it wasn’t your tree, you could be liable to the owner for up to 3 times the “reasonable value” of that tree (Conn. Gen. Stat. §52-560).

What If A Tree Or Branch Falls Onto My House or Car?

It is a possibility that a tree or branch will fall and damage somebody else’s property. This is possible with trees that are already encroaching or trees that are not encroaching while standing, but are once they fall. Sometimes, when these trees and branches fall onto the property of somebody else, they damage the house, a car, a fence or other property. However, the owner of that tree (or the land it was growing on) is not necessarily liable for the damage.

Factors that control an owner’s liability for damage caused by his tree falling on somebody else’s property are (1) whether they are a private owner or a commercial owner, (2) whether the tree was healthy or diseased/damaged, (3) did the tree or branch fall due to an “Act of God” such as a hurricane, or because it was unstable, and (4) are the properties located in a rural or urban area.


Encroachment Resolution

Many tree and vegetation encroachment issues can be resolved by negotiation. If your neighbor isn’t reasonable, you may want to have an attorney write a letter on your behalf explaining your rights and the actions you are going to take. When roots and falling branches or trees cause damage to your property, you may want to seek compensation from the responsible person or persons. If you are having encroachment issues with a neighbor, our real estate attorneys are ready to help.

Reading More on Connecticut laws regarding vegetation and real estate.