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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.

foreclosure defense attorney

Right to Foreclosure Mediation Extended to Divorcees and Surviving Spouses – Connecticut Public Act No. 15-124

Right to Foreclosure Mediation for Divorcees and Surviving Spouses

Connecticut Public Act 15-124 – An Act Extending The Foreclosure Mediation Program

One of the benefits of being in a multi-partner law firm is the overlap between our different practice areas, allowing us to better help our clients in difficult situations. Since our firm represents divorce clients, probate clients, and foreclosure clients, Connecticut Public Act no. 15-124 is going to allow us to help clients better solve their foreclosure issues when relating to residential real estate property that was part of divorce or probate proceedings.

The Problem Was Standing

Perhaps you are a divorcee. You just finished the long and stressful process of divorce. Part of the Court ordered Divorce Decree is that your ex-spouse execute a quitclaim deed transferring a house or condominium to your ownership. The deed is drafted and recorded on the land records and as far as you are concerned the property is now yours.

Perhaps your spouse recently passed away. You just finished the extremely complicated probate process. In their will your spouse left you residential real estate property. The Executor of your spouse’s estate drafted an Executor’s Deed, which was approved by the probate court and recorded on the land records, transferring title in the property to you.

In either case, let’s assume there was a mortgage on the property. Either your ex-spouse had not been making payments or the probate estate had not been making payments and the mortgage is in default. Or, even if the payments are current, the mortgage has a “due on transfer” clause, which states that if the property is ever transferred from the ownership of the borrower under the mortgage, the entire outstanding amount is due and payable in full. As is common, the collateral on the mortgage is the property itselfThe bank is now foreclosing on the property.

As the new owner, you want to enter foreclosure mediation so that you can find a way to keep your family home; through mortgage modification or refinance. Until October 1, 2015, YOU COULDN’T!

The issue was standing! Since you were not a party to the mortgage, you had no “privity of contract”, and therefore no standing to challenge the foreclosure in court. The foreclosure would proceed and the bank would be allowed to either repossess or sell your property to pay off the money owed to them.

The Connecticut Legislature Solves The Problem

The Connecticut Legislature saw the issue of removing spouses from the family home without letting them be heard when a court order had given them possession of the residential real estate property. After all, how is it fair to completely stonewall the new owner of the property from mediating a solution to the foreclosure?

Therefore, Public Act No. 15-142 has extended the foreclosure mediation process to include spouses who became “successors in interest” due to divorce, separation, or death of the other spouse.

What this means for our clients

The new law allows the divorcee or decedent’s spouse to stand in the shoes of the previous owner, at least as far as defending against foreclosure of the property is concerned. This means that we can now offer assistance to our foreclosure clients who became owners through divorce or death of their spouse. Previously, we would have had to turn these people away as there was no legal procedure available for us to resolve their problem. It is not guaranteed that the successor-in-interest spouse will be allowed to keep the property, but at least now they have a fighting chance.

Short Sale Debt Forgiveness Tax Relief

Tax Relief for Short Sale Debt Forgiveness

Short Sale Tax Relief

Exemption for Tax Liability Created by Short Sale Debt Forgiveness

The Budget Bill signed into law by President Obama on December 18th, 2015, has received a lot of coverage in the news for many reasons. One of the good thing hidden in the Bill is that The Mortgage Forgiveness Debt Relief Act, which had expired in 2014, has been retroactively extended through 2016. Let’s take a look at why further relief is necessary when debt is forgiven through short sale.

Debt Forgiveness is a Taxable Event

In this world, very few people are strangers to debt. Whether it is unsecured debt such as credit cards or student loans, or secured debt such as a mortgage on real estate property or car loan, almost everybody owes somebody else money. However, lenders do not always successfully collect debts owed to them. In these cases, the lender may elect to cancel all or part of the debt of the borrower.

With unsecured debt, the lender might not be able to collect the debt or may simply give up on trying to collect. With secured debt, the lender will usually chose to foreclose or repossess the property, or allow a short sale as discussed below.

What many people do not know, is that the forgiveness, discharge or cancellation of debt (whichever term you chose to use), is generally a taxable event. The IRS expects people to pay taxes on the difference between the amount they owed and the amount they actually paid. How does the IRS know? Because the lender is required by Federal Law to file Form 1099-C “Cancellation of Debt”, for any debt forgiveness greater than $600. the 1099-C contains pertinent information such as the borrower and lender identification, amount of debt forgiven and date of discharge. you are then required to show the amount of forgiven debt as income on Form 982 and submitted with your Form 1040 “Income Tax Return”.

How Does Debt Forgiveness Tax Impact Short Sale?

In a Short Sale, the lender allows the property owner and borrower to sell the property for less than they owe, and forgive the remainder of the debt, in an attempt to save themselves the time and cost of foreclosure and property maintenance. Technically, this debt forgiveness would be a taxable event as discussed above.

However, The Mortgage Forgiveness Debt Relief Act shields homeowners from tax liabilities created by mortgage debt that is forgiven due to Short Sale of a principal residence (as well as debt forgiven through mortgage modification or deed in lieu of foreclosure). Up to $2,000,000 of forgiven debt is eligible for tax exclusion.

Is Tax Relief for Short Sale Debt Forgiveness Fair?

Whether the forgiveness is fair or not is up for debate, but it definitely makes sense. People seeking Short Sale to avoid foreclosure do not have the money to pay their mortgage. How can the IRS expect the borrower to pay taxes on money they couldn’t pay? With the great number of financially distressed properties in this housing bubble, they can’t.

Consult a Professional

You need to make sure you are making use of the right professionals so that you do not pay the price at a later date. Your account should be consulted whenever a large scale taxable event occurs; such as the forgiveness of thousands of dollars or more in debt. They will need this information to accurately file your tax return. Your real estate attorney needs to make sure that the lender provides you with a 1099-C that is complete and accurate. Finally, you need to make sure that your team is communicating and exchanging information efficiently.

Click for More Reading on Short Sales…..

Click for More on Tax Relief…..

 

power of attorney in purchase or sale of real estate

Power of Attorney for Real Estate Transactions

Power of Attorney When Buying or Selling Real Estate

Authorizing Somebody Else to Act on Your Behalf

A power of attorney is the term used for an express authorization allowing somebody else to act on your behalf for a specific purpose. A power of attorney can be as general or as specific as the person creating the authorization wants and can allow somebody to make healthcare, financial, and other decisions on their behalf.

One common use for a power of attorney is in the context of a real estate transaction. The main use for a real estate power of attorney is to allow somebody else to execute, or sign, documents on behalf of a buyer or seller who is not present at the time of conveyance (or transfer) of the real estate property.

For example, if a Seller has moved to another state but is selling property in Connecticut, they may want to authorize a family member or their attorney to sign the deed transferring title on their behalf. A Buyer who is not present for a closing, for example if they are on active duty, can authorize a family member or their attorney to sign the mortgage and other loan documents on their behalf. Even entities such as corporations or LLC’s can authorize an individual to act on their behalf for the purpose of executing closing documents.

Whenever the use of a power of attorney is being considered, an experienced real estate attorney should be involved. The power of attorney must contain certain terms and be drafted properly, and then needs to be executed in a certain manner, to be compliant with Connecticut General Statute subsection 47-5. The deed will also need to be recorded on the land records in proper order, or the documents executed under that power of attorney will not be enforceable. Finally, an authorized individual under a power of attorney signing documents on behalf of the buyer or seller must sign in a specific way. An experienced Connecticut real estate attorney can make sure a power of attorney is drafted, signed and recorded properly and direct the authorized agent on how they must sign documents.

At G&G Law, LLC we draft Connecticut compliant power of attorney authorizations for our real estate clients, and will even act as power of attorney, at no extra cost if they are hiring us as closing agents to buy or sell property. We can also draft power of attorney authorizations for all other clients for a fee. If you need our assistance please call us at 203-906-9622.

ct real estate title law

Title Search and Title Insurance When Purchasing or Refinancing Residential Real Estate

Title Search and Title Insurance in a Purchase or Refinance of Residential Real Estate

Lender Requirements and Buyer Protections

When you are buying residential real estate, you are paying money in exchange for title to the property. It is in the interests of the buyer, and the lending institution giving the buyer a mortgage, to make sure that title is clear and “marketable”. The buyer wants to make sure they are actually being buying the property rights as promised by the seller. The lender wants to make sure that the collateral on the mortgage is as promised; the property has marketable title and is clear of other encumbrances, such as mortgages or liens. So, how do the buyer and lender make sure that title is clear and marketable?

Title Search

The buyer will need to hire a real estate attorney to perform and/or review a title search. A title search reviews the history of the property by looking at the land records. The title search will provide the legal description of the property, showing exactly what the buyer is buying.

For purchases, all conveyances, mortgages, liens and releases are reviewed going back 40 years (called the “chain of title”). By reviewing the title search, the real estate attorney for the buyer will be able to tell if the seller owns the property, how the seller or sellers hold title, do they have the right to sell it, are there any liens or mortgages on the property that must be paid off to make title marketable, and if there are any relevant powers of attorney relating to the property.

The Buyer may also choose to do a municipal search, which reviews all zoning and building permit for compliance with local laws.

For a refinance, only a current owner search is necessary. Through a current owner title search, the real estate attorney performing the refinance closing will be able to see if the borrower is truly the owner, and what mortgages and liens must be paid off to give the new lender first priority.

Title Insurance

Lenders are not willing to rely on title searches and attorney opinion when it comes to making sure they have actual collateral when making mortgage loans. Therefore, Title Insurance was invented to cover losses in the case that a title defect is discovered after the closing on the property. Title insurance is available to protect both the Lender and the Buyer from title defects that could result in loss of property value, or even loss of ownership of the property. In Connecticut, real estate attorneys act as title insurance agents and will prepare and secure the policy on the Buyer’s behalf.

For a purchase, the Lender will demand that the Buyer purchase title insurance to cover the Lender. The Buyer will also have the option to purchase additional coverage that will protect their interest in the property.

For a refinance, the Lender will similarly demand title insurance to cover their interest, but no Buyer policy is necessary. The homeowner will still be covered by the title insurance from their purchase. It should be noted that even if the refinance mortgage lender is the same as the purchase mortgage lender, a new title insurance policy will need to be purchased.

What does title insurance cover?

  1. Insures against anyone else making a claim that he or she is the owner of all or part of the property;
  2. Insures against liens or other encumbrances that were missed by the title search or misindexed by the town clerk;
  3. Can offer protection of ownership even where defects in title marketability exist (such as old unreleased mortgages);
  4. Insures a legal right of access (though this may be just by foot);
  5. Insures against violations of government regulations, but only those violations listed on the land records;
  6. Insures against the exercise of eminent domain in certain situations;
  7. Insures against fraudulent conveyances in the chain of title;
  8. Any defect in title that arises from the date of the policy (the closing date) and the date the deed and mortgage are recorded;
  9. For the Lender, it insures the enforceability of their lien created upon the title of the property by the mortgage;
  10. For the Lender, it insures the priority of their insured mortgage lien against other liens or encumbrances;
  11. For the Lender, it insures the priority of their mortgage lien against liens for services, labor or materials for work done on the property (in conjunction with an Owners Affidavit signed by the Seller);
  12. For the Lender, it insures the assignment and assignability of any mortgages that are assigned to and assumed by the Buyer;
  13. Pays attorneys fees and costs of defending title and the insured mortgages.

There is also available an expanded title insurance policy; which is a good idea for Buyers and may be necessary for the Lender in certain situations. In addition to the protections of a standard title insurance policy, the expanded title insurance policy also covers:

  1. Correcting or removing existing violations of restrictive covenants;
  2. The inability to obtain building permits due to existing violation of subdivision regulations;
  3. Removal of existing structures that were built without proper building permits;
  4. Removal of existing structures due to non-compliance with zoning laws;
  5. If the property cannot be used as a single family home due to zoning regulations;
  6. Removal of an existing structure that is then found to encroach upon the land of a neighbor;
  7. If a neighbor builds a structure that encroaches upon the property of the insured;
  8. For one to four family homes that have a valid certificate of occupancy and no recent boundary line changes, offers survey coverage even without a survey.

What does title insurance not cover?

  1. Government regulations for which a violation was not recorded on the land records;
  2. Rights of eminent domain where a notice of exercise was not recorded on the land records;
  3. Defects, liens or encumbrances that:
    1. were created or agreed to by the insured;
    2. known by the insured but not disclosed to the title insurance company;
    3. that do not result in any loss to the insured;
    4. were created or attached after the date of the policy;
    5. resulting from the Buyer’s lack of “bona fide purchaser” status.
  4. For the Lender, enforceability issues created by the Lender’s inability to meet Connecticut business practices requirements;
  5. For the Lender, enforceability issues created by the Lender’s lack of compliance with consumer protection or truth in lending laws;
  6. Any liens for services, labor or materials for work performed after the date of policy and not paid for by mortgage proceeds;
  7. Any claim arising from bankruptcy or other creditors’ rights laws.

How much does title insurance cost?

The cost of title insurance is set by statute and controlled by the legislature. With that said, title insurance premium are set increase beginning January 1, 2016 for the first time in decades.

With that said, we will look at the pricing structure at the time of the writing  of this article, even though we are only weeks away from the increase.

Let’s use the example of a house that will cost $200,000 (the amount of Owner coverage) and where the mortgage will be for $170,000 (the amount of Lender coverage). A standard lender title insurance policy will cost $607.00. If the Buyer decides to purchase a standard owner policy in addition to the standard lender policy, the total for both is $750.00. Expanded coverage for both Buyer and Lender would cost $825.00 for both policies. This is money well spent for the Buyer, as the title policy remains in effect until the property is sold.

In a refinance, there is no need for an owner policy as the owner is not conveying the property and will be covered by the title insurance policy from their purchase. The Lender policy will need to be purchased to cover the new mortgage, even if the refinance lender is the same as the purchase lender. The good news is that policy is discounted so that a $170,000 lender policy for a refinance would only cost $400.00.

At any time you can get a title insurance quote from the Connecticut Attorneys Title Insurance Company on CATICulator.com.

The Bottom Line on Title Insurance

The title search and title insurance are sometimes unanticipated and unwelcome expenses when the Buyer is presented with their closing costs. However, the Lender policies are required by the mortgage companies and banks, and the Owner policy is a relatively cheap addition that provides a lot of protection. Expanded policies offer buyers the peace of mind that they will not have to incur costs of compliance with violations that were not discovered before the purchase, and even some issues that arise after the purchase. If the Lender MANDATES title insurance to cover its investment, shouldn’t the Buyer similarly protect themselves?