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Mortgage rates have just dropped to the lowest level in almost 50 years, compelling both homeowners and home buyers to get off the couch to take advantage of record-level savings on their mortgage.

“The average 30-year fixed-rate mortgage hit a record 3.29% this week, the lowest level in its nearly 50-year history,” said Sam Khater, chief economist of mortgage giant Freddie Mac. “Meanwhile, mortgage applications increased 10% last week from one year ago and show no signs of slowing down.”

To put this record rate in perspective, 3.29% even dips below levels seen during the housing crisis. The average 30-year fixed-rate mortgage dropped to 3.31% in 2012. [More: Go to link here.]

Introduction.  This question is important for at least two reasons:

  1. It determines the time after which neither party can withdraw from the transaction without facing legal consequences; and
  2. It determines the time from which events, such as contingencies, begin and end.

Section 32 (Definitions/Instructions).  Here is what the Sale Agreement says:

(8) The phrase “signed and accepted” in the printed text of this Sale Agreement, or any addendum or counteroffer, however designated (collectively, “the Agreement” or “the Sale Agreement”), shall mean the date and time that either the Seller and/or Buyer has/have: (a) Signed their acceptance of the Agreement received from the other party, or their Agents , and (b) Transmitted it to the sending party, or their  Agent, either by manual delivery (“Manual Delivery”), or by facsimile or electronic mail (collectively, “Electronic Transmission”). When the Agreement is “signed and accepted” as defined herein, the Agreement becomes legally binding on Buyer and Seller, and neither has the ability to withdraw their offer or counteroffer, as the case may be.

Breaking Down The Text of Subsection (8).  Several rules emerge:

  1. Signing alone is not acceptance.
  2. For acceptance to occur (of the offer, the counteroffer, or counteroffer to counteroffer, etc.) it must be signed by the recipient and transmitted to the other side (or their agent).[1]
  3. Until acceptance, an offer or counteroffer may be withdrawn without legal consequences.
  4. Although not expressly stated above (perhaps it should be) transmitting a signed acceptance late, i.e. after the deadline, is not per se’ binding on either party – since the late transmission is a nullity unless the parties expressly agree otherwise, or through performance, act in a manner affirming the contract. In such cases, best practice is for both parties to agree in writing to treat the contract as binding.
  5. It is not sufficient to merely sign an acceptance to make a contract binding – the signed document must be hand-delivered or electronically sent (i.e. email or facsimile) to the party (or their agent) making the offer or counteroffer. Let’s refer to these forms of delivery as “transmission”.
  6. Once timely transmission of the signed acceptance occurs, a legally binding contract is formed. Note that it is “transmission” of the signed acceptance that counts – not receipt by the other party. Thus, if a seller signs their acceptance of an offer and it is immediately emailed back to the buyer or buyer’s agent, the contract is binding, even though the buyer is unaware that the transmitted document remains unopened in their inbox.
  7. Once the contract becomes binding, legal consequences arise: (a) A buyer cannot withdraw their offer without risking the loss of the earnest money deposit;[2] and (b) A seller cannot refuse to close without triggering a specific performance and/or damage claim from the buyer.[3]
  8. Transmission by email is essentially the same as hand delivery. 

Triggering Performance Dates. Once the Sale Agreement becomes binding based under the above rules, the buyer contingency periods are triggered.[4] Item (10) of Section 32 (Definitions/Instructions) provides:

Time calculated in days after the date Buyer and Seller have signed and accepted this Agreement shall start on the first full business day after the date they have signed and accepted it.

For example, if the Sale Agreement became binding on Wednesday, January 15, 2020 – that is, the date seller’s agent transmitted their client’s signed acceptance to the buyer’s agent – calculating a 10-business day contingency period would occur as follows:

  • Thursday, January 16, 2020 – is the first business day of the inspection contingency period;
  • Friday, January 17, 2020 – is the second business day;
  • Monday, January 20, 2020 through Friday, January 24, 2020 are the 3rd through the 8th business days; and,
  • Monday, January 27, 2020 and Tuesday January 28, 2020 would represent the 9th and 10th business days.[5]

Broker Tips on Dates and Deadlines. Below are some reminders to avoid arguments down the road. Both the seller’s and buyer’s brokers should coordinate with each other to confirm important dates and deadlines:

  • Business days do not include weekends or holidays;
  • If a day is listed in ORS 187.010 as a holiday in Oregon OR in 5 US Code §6103 it is not a business day.
  • Don’t get confused with dates the Governor may declare certain days as holidays for state employees – these are days that have been so designated in collective bargaining agreements, such as the Friday after Thanksgiving – which is not listed in ORS 187.010 or 5 US Code §6103.
  • If it does not appear in either the above statutes/codes, it’s not a “holiday” for purpose of the OREF Sale Agreement; if it appears in one of the above lists, it is a “holiday”. Hint: The two lists are the same, except for Columbus Day.
  • Remember that Columbus Day is not a “business day” because even though Oregon doesn’t recognize it in ORS 187.010, it is recognized in 5 US Code §6103; therefor it is a holiday under the Sale Agreement.

If in doubt about a particular day, treat it as a business day, which will have the effect of making the contingency period end too early rather than too late.  [The same rule applies to calculating all important deadlines – better to be safe than sorry!] ~Phil

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[1] Technically, one making an offer (or counteroffer) is called the “offeror” and the one receiving the offer (or counteroffer) is the “offeree”.

[2] The Sale Agreement provides that in the event of a buyer’s default, the earnest money can be forfeited to the seller – but this is the seller’s sole remedy.  This is why listing agents need to be careful about allowing the seller to accept a small earnest money deposit; the lower the deposit, the easier it is for the buyer to walk away.

[3] The Sale Agreement provides that if the seller refuses to perform, the buyer may file a claim asking that the arbitrator make an award of “specific performance” to the buyer, forcing the seller to sell. Significantly, this is not a buyer’s sole remedy; he or she can also seek damages in addition to specific performance.

[4] I say “buyer contingencies” because all of the pre-printed contingencies in the Sale Agreement are for the buyer’s benefit, such as inspection, title, financing, private well, septic, lead based paint. Unless waived or expired, a buyer may terminate the transaction based upon the occurrence of a contingency. For example, a buyer can terminate the transaction under the inspection contingency  by rejecting the inspection report, if properly and timely exercised.

[5] Note that pursuant to item  (13) of Section 10 (Definitions/Instructions), except for calculating the federal lead- based paint contingency period, the last day of the buyer’s inspection contingency period ends at 5:00 PM on January 28, 2020.

FIRPTA and Buyer Liability. Until the last few years,  the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) was just an arcane acronym; most residential real estate brokers had no knowledge of what it stood for, what it was, or how it worked. Fewer cared. After all, they had never handled a FIRPTA transaction involving the sale of real property by “foreign persons”.[1]

But during the Great Recession, it was widely believed that as prices plummeted, many foreign persons were purchasing homes in the United States for investment. It was also widely assumed that eventually these buyers would become sellers, so the real estate industry needed to familiarize itself with FIRPTA, since it levies a 15% tax on gross proceeds at closing.

Eventually, alarm bells began to go off when it became known that if the law applied to a transaction, but was ignored, the buyer becomes automatically liable for seller’s tax bill.  Suddenly, real estate agents and their brokerages began to become concerned about their duty to appropriately inform their buyer-clients about the application of FIRPTA if the seller was a foreign person.[2] And how would they know which seller was a foreign person and which one was not?

As many brokers know, the RMLS™ listing form asks sellers whether they are a foreign person.  And until the 2019 OREF Sale Agreement form was published, it contained a representation that the seller was not a foreign person.[3]  So, the question naturally arises, “If FIRPTA applies, and the seller is a foreign person, but says they are not, are the representations in the RMLS™ listing and Sale Agreement sufficient to insulate the buyer from liability for the seller’s taxes?”  Unfortunately, the answer is “No”.

Seller Certification (or Affidavit) of Non-Foreign Status. But the buyer is absolutely protected – like crosses to vampires – if the seller signs a Certification of Non-Foreign Status (“Certificate”). It is a fairly benign document: (a) stating that the seller is not a nonresident alien for purposes of U.S. income taxation; (b) identifying their Social Security Number (or Employer Identification Number); and (c) their home address.

Above the seller’s signature is an acknowledgment that it may be disclosed to the IRS by the buyer, and that if any of the above statements are false, it could be punishable by fine, imprisonment, or both. Then, “under penalties of perjury” the seller signs declaring that they have examined the document and to the best of their knowledge and belief it is true, correct, and complete.

The Rub. Hmmm. Sounds simple enough. Nada. You see, under the FIRPTA law, the Certificate is to be given to the buyer to hold for five years. How many sellers do you suppose would willingly turn over their Social Security Number to their buyers to hold for half a decade?

 Enter the Qualified Substitute Rule. The answer is obvious – find someone else to do so. In 2008, the “Qualified Substitute” law went into effect, which “…means, with respect to a disposition of a United States real property interest— (A) the person (including any attorney or title company) responsible for closing the transaction, other than the transferor’s agent, and (B) the transferee’s agent.”[4] So in Oregon, the buyer’s real estate agent or the title company closing the transaction may serve as the Qualified Substitute for the buyer to hold the Certificate. In that capacity they must deliver to the buyer a signed declaration under penalty of perjury that they are in possession of the Certificate.

The Other Rub.  How many sellers do you suppose would willingly turn over their social security number to their buyer’s real estate agent/brokerage to hold for half a decade?

Role of Oregon Title Insurance Companies as Qualified Substitutes. Though it was not always the case, as of 2019, all major title companies in the Portland Metro area have agreed to serve as Qualified Substitutes. I believe this is also the case in the Bend area of Central Oregon.

This is an accommodation that only makes sense – who is in a better position to electronically retain the Certificate with the seller’s social security number or Tax ID Number than the title company that handled the transaction from the opening to closing of escrow, disbursement of funds, and recorded the deed of conveyance? And we know that sellers do not object to providing escrow with their social security number or Tax ID Number – it is required in order that escrow can complete and submit the 1099-S (Proceeds from Real Estate Transactions) to the IRS.

In short, Oregon title companies are the obvious entities to serve as Qualified Substitutes. And if truth be told, many – if not all of them – have been having sellers sign a Certificate for every transaction they close, regardless of whether they are “foreign persons”. What they haven’t been doing, at least until now, is “formally” acting as the Qualified Substitute, and providing every buyer with a declaration they received the seller’s Certificate and will hold it for the required five-year period of time.  This is no burden, since under Oregon Real Estate Agency regulations, title and escrow companies are required to hold their transactional records for not less than six years.

Why is This Important for Oregon Realtors?  When buyers or sellers are damaged, or believe they have been damaged, or are threatened with damage, the first place they look is to their real estate broker. If a seller lied about being a “foreign person” subject to FIRPTA and the buyer got tagged for the seller’s tax liability, it is likely they would ask their own broker why they weren’t warned about this.  And that broker could likely ask the seller’s broker why it wasn’t vetted at the time of taking the listing.

And what will escrow say when asked why they didn’t vet the issue? They will respond that they act as a “neutral” and do not render advice, and have no duty to vet the FIRPTA issue with sellers and buyers.  And lest you doubt this, sit down in a quiet room free of distractions for an hour, and closely examine the carefully drafted escrow instructions that both parties sign, and the title insurance disclaimers on their policies.

The Solution Going Forward.  Oregon Realtors have no business doing something escrow should be doing when a real estate transaction is first opened: Have the seller and buyer instruct escrow to immediately get the Certificate of Non-Foreign Status signed by the seller, and then provide a declaration to the buyer at closing that it is holding that document and will do so for the required period of time. How difficult is that? Realtors should not want their fingerprints on the Certificate. Let escrow do the job they are used to doing.

Remember, escrow has no duty to proactively vet the “foreign person” issue. That is why it is important for the brokers to make that a priority in every transction – when escrow is opened, have seller and buyer “instruct” it to (a) get a Certificate of Non-Foreign Status signed by the seller, and (b) deliver a declaration to the buyer at closing that they are holding it. If necessary, put this instruction in writing, get seller and buyer to sign, and submit it to escrow.

And an added benefit of this is that 75% of the current FIRPTA section can be eliminated from the OREF Sale Agreement, since Realtors will no longer need to vet the issue in order to protect themselves from liability. With luck, all of the current inventory of FIRPTA forms can be eliminated, since FIRPTA will no longer be the elephant in the (closing) room.

Does This Result in any Added Burden to the Title/Escrow Industry? No, they’ve been quietly getting Certificates signed for years; they already hold them for six years – one year longer than the IRS requires; they already have their seller’s Social Security or Tax ID Number; and since they already collect and disburse funds, if they have to remit the seller’s FIRPTA withholding taxes, it is simply another part of their existing closing protocols[5] – similar to that required for Oregon withholdings for out-of-state sellers.[6]

As for title and escrow companies in small towns, there are anecdotal reports that some of them may be hesitant to act as a Qualified Substitute since they are unfamiliar with the law. However, we know that their title insurance is underwritten by the larger companies.  So, the solution seems to be for the larger companies to educate their smaller brethren about this law. It isn’t complicated: It only requires having sellers sign a Qualified Substitute form and delivering a declaration to their buyers confirming they are holding it. ~Phil

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[1] According to the IRS here, “A payee is subject to nonresident alien (NRA) withholding only if it is a foreign person. A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, a foreign estate, and any other person that is not a U.S. person. It also includes a foreign branch of a U.S. financial institution if the foreign branch is a qualified intermediary. Generally, the U.S. branch of a foreign corporation or partnership is treated as a foreign person.”

[2] This is not to suggest that FIRPTA makes brokers automatically liable if the withholding law is ignored. But if a buyer ended up having to pay their seller’s FIRPTA withholding, that buyer could quite possibly ask: “Why didn’t my agent inform me about this risk?”

[3] Why it was removed is a mystery to me. It should be put back, along with an affirmative representation that the seller will cooperate with escrow in signing whatever documents and forms escrow requires for closing with a non-foreign person.

[4] See, https://www.law.cornell.edu/uscode/text/26/1445

[5] To be clear, title companies have never objected to withholding a seller’s FIRPTA taxes and remitting them to the IRS. The only objection by many of them – until now – has been formally serving as the Qualified Substitute.

[6] Escrow is required to withhold and disburse to the Oregon Department of Revenue taxable gains on real property sold by out-of-state residents. See, discussion here.

Discussion: The Portland Ordinance, 30.01.085 (“Portland Renter Additional Protections”) here, now in effect, has identified the occurrence of certain events that, if triggered, would require landlords to pay Relocation Assistance (“RA”) to tenants. [References below to the “Ordinance” will refer to 30.01.085; references to the Oregon Residential Landlord-Tenant Act, ORS Chapter 90, will be referred to as the “Act”; and references to the new state law governing rent increases, will be referred to as “SB 680” here.] 

Apparently, there is some thought that this Ordinance is “preempted” by SB 608. That is not my opinion. I say this because the Portland Ordinance is more restrictive to landlords than SB 608. 

Although I have not conducted any serious research on the subject, SB 608’s rent cap is 7.00% plus the September-to-September average change in CPI for All Urban Consumers. Today that would mean rent increases under SB 608 cannot exceed 10.4%. Portland’s Ordinance limits rent increases to under 10%, without triggering a relocaton assistance charge of several thousands of dollars. If the Portland Ordinance had a rent increase formula resulting in a higher cap than SB 608 (meaning it was more favorable to landlords, i.e. less restrictive than the state law), I would say it was preempted. That is not the case under the present laws. But the content on this website is NOT legal advice. Readers should secure an independant legal opinion from their own attorney or self-proclaimed expert. ~PCQ

The Ordinance applies to all rented Dwelling Units within Portland’s city limits, whether they are managed by an owner, a sublessor, or property management company.  However, not all properties that list Portland as their mailing address are located within the city limits.

“Portland Maps” is the official city site used to determine properties subject to the RA policy. See, https://www.portlandmaps.com/. To verify the location of a rental property, click on the Portland Maps link and enter the property address. Once it appears, there are related several links, one of which is “Jurisdiction”. If the Jurisdiction link states “Portland,” the rental property is subject to the mandatory RA policy, unless otherwise exempted, as discussed below.

EVENTS TRIGGERING RELOCATION ASSISTANCE

  1. No-Cause Eviction
    1. Landlord must pay Relocation Assistance (“RA”) to Tenant at least 45 days before termination of the tenancy
  2. Increase of 10% or more in Rent or “Associated Housing Costs”[1]
    1. Tenant must give written notification to Landlord requesting RA within 45 days of Rent Increase Notice
      1. Landlord must pay RA within 31 days of Tenant’s request for RA
    2. Substantial Change of Lease Terms
      1. Tenant must give written notification to Landlord requesting RA within 45 days of substantial change
        1. Landlord must pay RA within 31 days of Tenant’s request for RA
      2. Non-Renewal of Lease
        1. Landlord must pay RA to Tenant at least 45 days before termination of the tenancy

Note:  With the exception of No. 2 (Rent increases of 10% or more) and No. 3 (Substantial Change of Lease Terms) the two remaining events do not require the tenant to make a written request for RA. Payment is simply expected to occur within the required time from the triggering event.

 AMOUNT OF RELOCATION ASSISTANCE

  1. $2,900 for a studio or single room occupancy (“SRO”) Dwelling Unit
  2. $3,300 for a one-bedroom Dwelling Unit
  3. $4,200 for a two-bedroom Dwelling Unit
  4. $4,500 for a three-bedroom or larger Dwelling Unit.

Note:  If a Landlord is paying RA required under the Act, and Relocation Assistance is also required by the Ordinance for the same Termination Notice, the Relocation Assistance required by the Ordinance may be reduced by the relocation assistance required by the Act if both payments are paid at the same time and as a single payment. [2]

TENANT’S RECEIPT OF RELOCATION ASSISTANCE AFTER RENT INCREASE OF 10% OR MORE

  1. Following receipt of the RA, the tenant has 6 months from the date of the increase to either:
    1. Pay it back, and thereafter become obligated to pay the increased rent in accordance with notice of increase; or
    2. Provide the landlord with a notice to terminate the rental agreement in accordance with the Act.
  2. In the event the tenant fails to pay the RA back to the landlord or provided the landlord with the termination notice on or before the expiration of the six-month relocation period, the tenant will be in violation of the ordinance.

Note: A violation of any law or ordinance is also breach under most well-drafted rental agreements or leases, for which landlord may issue a curable notice of default. Accordingly, it appears this would be one method of commencing recovery of the RA should the tenant fail to terminate and repay the RA. The other would be to file a claim in the county Small Claims Court.

Note: The other three triggering events for RA assume the tenancy is terminated, so tenant has no option to accept or reject the landlord’s action – therefore no repayment issue. However, in the event of a substantial change in the lease terms, it would seem possible that the landlord and tenant might  reach agreement to continue the lease under the amended terms, in which case, the tenant would be required to return the RA, just the same as a rent increase of 10% or more.

EXEMPTIONS FROM PAYING RELOCATION ASSISTANCE

Relocation Assistance does not apply to the following, so long as the Landlord has submitted a required exemption application form to Portland Housing Bureau for which it has issued an exemption acknowledgement letter, a copy of which the Landlord must be provided to the Tenant:

  1. Rental agreement for week-to-week tenancies;
  2. Tenants that occupy the same dwelling unit[3] as the landlord;
  3. Tenants that occupy one dwelling unit in a Duplex where the Landlord’s principal residence is the second Dwelling Unit in the same Duplex;
  4. Tenants that occupy an Accessory Dwelling Unit that is subject to the Act in the City of Portland so long as the owner of the Accessory Dwelling Unit lives on the site;
  5. A Landlord who temporarily rents out their principal residence during an absence of not more than 3 years;
  6. A Landlord who temporarily rents out their principal residence during the Landlord’s absence due to active duty military service;
  7. A Dwelling Unit where the Landlord is terminating the Rental Agreement in order for an Immediate Family member[4] to occupy the Dwelling Unit;
  8. A Dwelling Unit regulated or certified as affordable housing by federal, state or local government is exempt from paying Relocation Assistance for a Rent increase of 10 percent or more within a rolling 12-month period:
          a. so long as such increase does not increase a Tenant’s portion of the Rent payment by 10 percent or more within a rolling 12-month period; or
          b. in Lease Agreements where the Rent or eligibility is periodically calculated based on the Tenant’s income or other program eligibility requirements and a Rent increase is necessary due to program eligibility requirements or a change in the Tenant’s income.
    Note: This exemption does not apply to private market-rate Dwelling Units with a Tenant who is the recipient of a federal, state, or local government voucher;
    Note: This exemption applies to Rent Increases and does not apply to Termination Notices.
  9. A Dwelling Unit subject to the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; 
  10. A Dwelling Unit rendered immediately uninhabitable not due to the action or inaction of a Landlord or Tenant;
  11. A Dwelling Unit rented for less than 6 months with appropriate verification of the submission of a demolition permit prior to the Tenant renting the unit;
  12. A Dwelling Unit where the Landlord has provided a Fixed Term Tenancy and notified the Tenant prior to occupancy, of the Landlords intent to sell or permanently convert the Dwelling Unit to a use other than as a Dwelling Unit subject to the Act.

Note: Remember that before being entitled to an exemption, the landlord needs to provide a copy of the Portland Housing Bureau’s acknowledgment letter to the Tenant.

LANDLORD DUTIES FOLLOWING PAYMENT OF RELOCATION ASSISTANCE

  1. Landlord must include a Notice of Tenant’s Rights and Obligations (the “Notice”) and the eligible amount of Relocation Assistance with issuance of the following:
    1. Termination Notice;
    2. Any Rent Increase Notice;
    3. Relocation Assistance payment.
  2.  Landlord must notify the Portland Housing Bureau of all payments to tenants of Relocation Assistance within 30 days of making such payments.

ADDITIONAL LANDLORD LIABILITY FOR VIOLATION OF ORDINANCE

  1. Any Tenant claiming to be aggrieved by a Landlord’s noncompliance with the above regulations in the Ordinance, “has a cause of action in any court of competent jurisdiction for Damages and such other remedies as may be appropriate.”
  2. Damages include the following:
  3. An amount up to 3 times the monthly Rent;
  4. Actual damages;
  5. Relocation Assistance; and
  6. Reasonable attorney fees and costs.

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[1]   “Associated Housing Costs.” include, but are not limited to, fees or utility or service charges, means the compensation or fees paid or charged, usually periodically, for the use of any property, land, buildings, or equipment. For purposes of Portland’s rent increase ordinances, housing costs include the basic rent charge and any periodic or monthly fees for other services paid to the Landlord by the Tenant, but do not include utility charges that are based on usage and that the Tenant has agreed in the Rental Agreement to pay, unless the obligation to pay those charges is itself a change in the terms of the Rental Agreement.

[See, https://www.portlandoregon.gov/citycode/28481#cid_708924]

[2] Note: Charges to a landlord for exceeding the Oregon rent cap laws, or for other violations under the recently enacted SB 608, are not identified as “relocation assistance”. That law provides at Section 1: “(9)(a) If a landlord terminates a tenancy in violation of subsection (3)(c)(B), (4)(c), (5), (6) or (7) of this section: (A) The landlord shall be liable to the tenant in an amount equal to three months’ rent in addition to actual damages sustained by the tenant as a result of the tenancy termination; and (B) The tenant has a defense to an action for possession by the landlord. (b) A tenant is entitled to recovery under paragraph (a) of this subsection if the tenant commences an action asserting the claim within one year after the tenant knew or should have known that the landlord terminated the tenancy in violation of this section.”

[3] Under Portland City Code 33.910 a “Dwelling Unit” is a building, or a portion of a building, that has independent living facilities including provisions for sleeping, cooking, and sanitation, and that is designed for residential occupancy by a group of people. Kitchen facilities for cooking are described in Section 29.30.160 of Title 29, Property and Maintenance Regulations. Buildings with more than one set of cooking facilities are considered to contain multiple dwelling units unless the additional cooking facilities are clearly accessory, such as an outdoor grill.

[4] Per the City’s Administrative Rules, the term “Immediate Family” means “… parent, foster parent, step-parent, parent in law, sibling, foster sibling, step sibling, sibling in law, grandparent, grandparent in law, child, step child, foster child, grandchild, aunt, uncle, niece, or nephew. An Immediate Family member cannot be an Owner of the Dwelling Unit, their spouse, or their domestic partner. The Immediate Family member must have reached the age of majority (18) or be a legally recognized emancipated minor.”

 

From the IRS

“It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors.

Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. Continue reading “Inependent Contractor Resources For Realtors”

Generally. In its most basic sense, the OREF Sale Agreement is an offer to purchase property; it describes the price and terms of sale, the contingencies, the closing process, and the closing date.  Once signed by seller and buyer, the document is delivered to escrow and, in most cases, the earnest money is deposited in trust at the title insurance company.

The purpose of this article is not to discuss the different provisions in the Sale Agreement, but when it becomes “binding”. This is important because after it becomes binding three things occur: Continue reading “Oregon Contract Law: Offers, Counteroffers, And Their Withdrawal”

On January 18/22, the Treasury Department and the Internal Revenue Service issued their final regulations regarding the new 20 percent deduction on qualified business income created by the 2017 Tax Cuts and Jobs Act. Until the regs were finally published, there had been uncertainty about the interpretation of some provisions.

26 U.S. Code § 199A now permits owners of sole proprietorships, S corporations, or partnerships to deduct up to 20% of their earned business income. The purpose of the provision was to allow small businesses to keep pace with the tax cuts offered to corporations under the Act. Continue reading “Real Estate Professionals and the Qualified Business Income Rule”

Summary of Mediation & Arbitration under Sections 37-38.3 of the OREF Residential Real Estate Sale Agreement.

The 2019 OREF forms revisions did not make any major changes[1] to the alternative dispute resolution (“ADR”) provisions of Sections 37-38.3.

But before addressing the arbitration process, it is critically important for brokers and their clients to understand that mediation is an essential first requirement in the ADR process under the OREF Sale Agreement. Accordingly, I will address that process first, since the vast majority[2] of disputes are resolved at this stage. Continue reading “Oregon Real Estate Disputes – Litigation vs. Mediation & Arbitration (Part II)”

“Which is best? Which is fastest? Which is fairest? Which is the least expensive?” These, and many more questions have been asked over the years regarding the best method of resolving disputes. And oftentimes, the answer depends upon those you ask. So, let’s break the issue down to bite-size bits:

Defining the Terms.[1]  The term “litigation” generally denotes “court”. In its most basic format, there is a “plaintiff” (who is generally seeking a remedy either in damages, or  performance, or some other form of relief) and a “defendant” (who is resisting, or defending against the legal action). Continue reading “Oregon Real Estate Disputes – Litigation vs. Mediation & Arbitration (Part I)”

In its simplest form, an easement is a “right of use”.  The legal definition in ORS 105.170 is a bit more arcane:

Easement means a nonpossessory interest in the land of another which entitles the holders of an interest in the easement to a private right of way, embodying the right to pass across another’s land.

Holders of an interest in an easement means those with a legal right to use the easement, including the owner of the land across which the easement passes if the owner of the land has the legal right to use the easement.

Continue reading “QUERIN LAW: Statutory Easements Rights In Oregon”
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