May 2010 Archives

If you are planning a remodel on your home that was built prior to 1978 there are new rules that dictate whom can do the work on your home and the procedures they must adhere to.  Firms and the employees handling a remodel or renovation on a home built prior to 1978 must be certified.  To get certified the firm and the employee must attend training and pay a fee to the EPA.

As reported by the National Association of Home Builders:

The U.S. Environmental Protection Agency's Lead: Renovation, Repair and Painting rule governing the work of professional remodelers in homes where there is lead-based paint was published in the Federal Register on Earth Day, April 22. The rule took effect April 22, 2010.

The rule addresses remodeling and renovation projects disturbing more than six square feet of potentially contaminated painted surfaces for all residential and multifamily structures built prior to 1978 that are inhabited or frequented by pregnant women and children under the age of six.

It requires a cleaning inspection after the work is completed and grants the remodeler flexibility in determining the size of the work area, which can reduce the size of the area subject to containment.

The EPA rule also lists prohibited work practices ― including open-torch burning and using high-heat guns and high-speed equipment such as grinders and sanders unless equipped with a HEPA filter.

Additionally, the rule establishes required lead-safe work practices, including posting warning signs for occupants and visitors; using disposable plastic drop cloths; cleaning the work area with HEPA vacuuming and wet washing; and individual certification through a training course.

The full rule and brochures for consumers and renovators can be downloaded from the EPA's Web site.

Information for Homeowners Working at Home

If you are a homeowner performing renovation, repair, or painting work in your own home, EPA's RRP rule does not cover your project. However, you have the ultimate responsibility for the safety of your family or children in your care. If you are living in a pre-1978 home and planning to do painting or repairs, please read a copy of EPA's Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools (PDF) lead hazard information pamphlet (11 pp, 1.1MB). | en español (PDF) (20 pp, 3.2MB). You may also want to call the National Lead Information Center at 1-800-424-LEAD (5323) and ask for more information on how to work safely in a home with lead-based paint.

Fortunately, Seattle has not experienced the high number of short sales and foreclosures that the southern tier of states has. But if you know someone who is on the edge, here is some good information. These tables will tell you what the waiting period is, before you will once again be eligible for a Fannie Mae or Freddy Mac loan.

I'm not an attorney and this is not legal advice. Before you take one of these options be sure to consult with an attorney and probably an accountant. There is a lot more than a waiting period involved with these actions.

This table is only a guide. Fannie Mae and Freddy Mac are constantly changing their guidelines. You're welcome to call Lake and Company and talk to one of our agents anytime, but always remember that before you decide on one of the above scenarios, talk to an attorney.

Recently it was announced that the FHA loan program will be reducing allowable Seller contributions from 6% to 3%.   What is a Seller contribution?  A Seller contribution is when the seller of home agrees to contribute funds towards a Buyer's closing costs (or loan costs).  This can include discount points, appraisal fees, loan originations fees, etc.

There is also growing pressure to raise the minimum down payment from 3.5% to 5%.

Even with the coming changes, FHA will still be a fantastic loan option for first time buyers.   The program still allows gift funds from family, friend and/or employers.  The program also allows for state homebuyer assistance programs.

 If you are a first time homebuyer that was thinking of using the FHA program, now may be a good time to talk to a knowledgeable real estate professional or local lender.

The Seattle City Council is considering a bill that would make licensing of landlords mandatory in the city and sets standards for rental property inspections. Becasue of a certain state law regarding this type of law, Seattle must pass their version prior to June 10, 2010. If you want to infuence your city council representatives, you should contact them soon.

Bill 116857 begins with this statement:

WHEREAS, the City Council has determined substandard and unsanitary
residential buildings and dwelling units exist within the City of Seattle,
the physical condition of which violates State and local housing and
technical codes...

From Mayor Mike McGinn's office we have this statement:

Seattle's current system is complaint-based--we cannot do anything unless a tenant complains about bad conditions in rental housing. Some tenants won't complain if their landlord won't make repairs, others won't complain because they fear retaliation or a rent increase; others are unaware complaining to the City is even an option; and some won't call a government agency for help because of language or cultural barriers. Requiring inspections for all rental units levels the playing field and assures all tenants safe rental housing that, at a minimum, meets housing code standards.

We appreciate Councilmember Clark's work on this bill. Due to a law passed by the legislature this session, the law must be passed by June 10th or it cannot be passed at all. If you wish to weigh in on this legislation, contact information and a FAQ is below.

Here are the Frequntly Asked Questions:

FAQ

 

Why is rental inspection legislation being proposed?

 

The 2010 state legislature passed a bill limiting cities' ability to enact proactive rental housing inspection programs.  Such inspections are the method for cities to preemptively check that rental units are safe for all residents.  The bill said that cities that want to have such a rental inspection program can only require checking for a limited list of conditions that present a current danger to the health or safety of tenants.  Though this law sounds thorough, this precludes any inspections to show that rental housing complies with locally adopted housing codes that address the most basic of safety issues, including conditions not included on the list or those that may not yet endanger health or safety, but that will do so with further deterioration.

 

This same bill also imposes severe restrictions on any city in Washington that wants to proactively inspect rental housing, unless their program is adopted prior to June 10^th , 2010. This short timeline is why this law was introduced following the legislative session.

 

Is there a need for rental inspections?

 

Seattle has found units recently where:

 

·         A married couple was rented a crawl space with a dirt floor as their place to live

·         Six men were renting a unit where their toilet was located in the kitchen

·         A university student was rented a furnace room as a bedroom

 

All of these situations would NOT cause the unit to fail an inspection under the standards set by the new state law

 

Who is affected by unsafe rental units?

 

Everyone. 

 

People who cannot afford to pay much for rent deserve a safe unit.  Complaining to the city can lead to landlord retribution.  Additionally, communities who have affordable units should know the units are safe and maintained.

 

Do other cities in Washington have a proactive rental inspection program?

 

Yes, Pasco and Tukwila both have rental inspection programs.

 

Would someone lose their apartment if a violation is found?

 

Not in most cases.  The city's goal is to encourage landlords to fix a unit while still occupied.  Only when there is an immediate risk of potential harm to a tenant would anyone be required to move out.  For example, DPD is currently working with a large apartment complex in Ballard to allow the landlord to replace out of compliance baseboard heaters over time to minimize inconvenience to tenants and make the cost manageable for the landlord.

 

Would inspectors look for other violations or inquire about a renter's immigration status?

 

No, in most cases inspectors will be private contractors and are only looking for violations of the building or housing code. City inspectors do not inquire about immigration status and focus on the physical condition of the building and premises, not the lives of renters

 

Why does Seattle want landlords to be licensed?

 

Seattle wants rental housing to be safe and meet community standards.  Many residential tenants, as well as landlords, are unaware of the maintenance and safety standards required for rental housing in Seattle.  The licensing program gives the City a means to improve the quality of rental units because they will have to meet Seattle's maintenance and safety standards.  Under Seattle's rental standards, any conditions that endanger tenants are not allowed.   

 

Why are rental housing business licenses required for owners who may own only one rental unit?

 

Renting out housing units to tenants is a business. All other business activities in the City of Seattle are required to obtain business licenses, even if they have only one business location.  This would treat landlords the same as other business operators.

 

Why is an inspection needed for a license?

 

Seattle's current system is complaint-based - we cannot do anything unless a tenant complains about bad conditions in rental housing.  Some tenants won't complain if their landlord won't make repairs, others won't complain because they fear retaliation or a rent increase; others are unaware complaining to the City is even an option; and some won't call a government agency for help because of language or cultural barriers.  Requiring inspections for all rental units levels the playing field and assures tenants their rental units are safe and meet minimum housing code standards.

 

What does a Certificate of Compliance under this program mean?

 

The inspectors in this program will be inspecting for compliance with all of the items covered by Seattle's housing code, not just those conditions that might endanger life safety.  Therefore a certification of compliance assures the tenant that the unit being rented has been inspected and found to meet community housing standards.

 

How are Seattle's requirements different from those in the registration program provisions just authorized by the State Legislature?

 

The State legislation restricts local jurisdictions' ability to design their own inspection programs. Conditions in rental housing vary based on location, e.g., what you find in in rural eastern Washington can be very different from the rental housing found in a large city such as Seattle.  This proposal is tailored to the needs of the urban environment and the standards of the community in which these units are located. Under the state program, Seattle's options are severely limited:

·         Inspectors can inspect only for conditions that endanger health and safety, which mean many serious but non-life-threatening conditions will not be addressed.

·         Units in buildings opened within the last four years and where no violation has been reported will NEVER be required to undergo inspection.

·         Building owners dictate which units are inspected. This allows unscrupulous owners the opportunity to hide significant problems. By choosing to have only a small number of units in a multiunit building inspected, they can prevent inspectors from discovering significant problems in other units. 

 

How do I know the person inspecting my units is qualified?

This ordinance requires the inspectors under this program to be certified by one of several independent housing inspector organizations and to pass a test specific to Seattle's housing code.

 

What if a tenant doesn't want his or her unit inspected?

The landlord has a right to, and should, inspect his or her rental units at regular intervals.  With proper notice, the tenant is required to allow entry to the owner and an inspector for this purpose.

 

What happens if a landlord doesn't obtain a license?

A landlord who doesn't obtain a business license would be penalized with fines.  In rare cases, the City could also seek a court order requiring a landlord to obtain a license or get out of the business of rental housing. 

 

I think this bill would go a long way in helping to clean up some seriously degraded properties in the city. We have limited land space in Seattle. Nowhere to grow. Let's make every bit of our land area a plus when it comes to livability, whether its green space, housing, commercial or industrial. Whatever you think, you should let the city council know about it.

What Do You Do If The Appraisal Is Low?

I had a client call the other day, after the sale was negotiated, before the appraiser had been to the house. These were first time buyers, for the most part very nervous as the details of the transaction flow chart moved along.

First, the decision of which house to buy was difficult. I think these young professionals were testing their engagement promises for the first time. Once they had their goals in sync, finding the right house became easier. There were three offers on the property and they really didn't go above the asking price, but they had the best credentials. Still, they worried that they paid too much.

Next there were some worries about a few details of the inspection. Do you ask the Seller and risk losing the house if they won't do the minor repairs? What kind of a job will they do?

Once the offer was negotiated, they were worried about loosing the earnest money. "Not going to happen unless you no longer want to buy the house," I told them. "Oh, We do. We do," they said.

A few days later the phone rang again. "What happens if the house doesn't appraise? We were looking on Zillow and it will probably come in low."  "Well," I told them. "That's not something to worry about until it happens."  I went on to explain that there is wording the contract that says, for one thing, you don't have to buy it if the appraisal is low, but you can still buy it if you can come up with the difference, or you can negotiate with the seller for a price adjustment. Hardly anything bad can happen for the buyer if the appraisal comes in low. And this house has a large groomed yard and a new kitchen and new windows all around.

A quick check of the neighborhood solds presented a picture of fixer homes that had sold recently. Zillow has a hard time knowing much about the windows, kitchens and quality of the landscaping, as they never go to the locations. I predicted the appraisal would come in at value, and it actually was $5,000 over the contracted price. Nothing but blue skies up above.

 For some reason, this young couple was not worried at all as they signed documents. And since closing they've called twice with thanks for the help they received with purchasing this great home.