Flipping Rules & Tree Law

After the banking debacle, as we are returning to the “new” normal, financing seems to be much more difficult to get. Buyers have been experiencing frustrations, especially where the seller has recently acquired the property and has offered the property for sale (as a flip) and the new buyer needs to obtain financing.

There are “flipping rules” for financing.  If the house was sold within the past 90 days, usually no financing will be available (for FHA, FNMA, FHLMC.) However, under the temporary guidelines, which have been extended through 12/31/14, financing may be available so long as the sales price does not increase over 20% of acquisition cost.

Also, 2^nd appraisals may be required (buyer cannot pay for 2^nd appraisal). It is possible to go over 20% per underwriter discretion.

Once the property has gone 91 days since the last sale, financing can be available for FHA, FNMA, and FHLMC.  But there are a few things to watch out for.  A red flag is raised if the sales price is increased by over 20%. Again, a 2^ndappraisal may be required (buyer cannot pay for 2^nd appraisal).  Also it will be up to the underwriter’s discretion on strength of appraisal.

For more information on these rules, check with your lender, for more information on appraisals, see the following:

Sarasota County appraisers office: http://www.sc-pa.com/home

Charlotte County appraisers office: http://www.ccappraiser.com
The website to check if a property is eligible for USDA financing is: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do.

And now the age-old favorite question, “Who is responsible if your neighbor’s tree falls on your property?”

The general rule is that unless the tree owner knew that the tree was unsafe, he is not responsible. The general rule throughout the United States is that if a tree limb or a tree root protrudes on a neighbor’s property, that neighbor has the right to exercise self-help—i.e. the offending root or limb can be cut off. But just a word to the wise, discuss your intentions with the neighbor before cutting the branches off.

Some Court cases have determined that when a tree falls, and if the neighbor had previously asked the owner about that tree, the courts found the tree owner was not liable, since the neighbor—who suspected that the tree was dangerous—did not exercise his rights to trim the branch and thus did not exercise his self-help. In other words, the neighbor’s own negligence defeated his claim against the tree owner.

The Court suggested that a landowner might have a duty to periodically inspect the trees on his property or at least have them examined by an expert to determine whether they are safe to continue to stand. But you as the neighbor should have a look at the trees in and hanging over your yard.

What if your tree falls on a public roadway? According to a recent Supreme Court a landowner does not have a duty to inspect and cut down sickly trees that have the possibility of falling on a public roadway and inflicting injury. This is the duty of the local government to periodically inspect to assure the safety of the public.

There is a long—often convoluted and contradictory—legal history relating to the development of “tree law”. Our legal system is predicated on what we refer to as the “Common Law”—and under the common law, the landowner owed no duty to those outside his property to correct natural conditions on the property—even though those conditions might present a hazard to outsiders.

The current rule of law, states that the tree owner is responsible only if that owner was negligent. So if your neighbor’s tree falls onto your property—whether or not it causes damage—you should talk to your neighbor and propose that you share in the cost of removal and repair. Clearly, this is probably the least expensive way to resolve your issues, and you also can avoid filing a claim against your insurance carrier.

How do tree owners protect themselves to avoid the allegation of negligence? One safe harbor is to have your trees periodically inspected by a certified arborist, and get a written report stating that the trees are healthy.

Dane Hahn is a real estate professional serving clients in Sarasota and Charlotte Counties. He can be reached at dane.hahn@gmail.com or by phone at 941-681-0312.  See him on the web at www.danesellsflorida.com