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Homeownership is the foundation of the American economy, HUD Secretary Ben Carson said at a forum on June 1.
Unfortunately, that sentiment is not reflected in tax reform proposals being pushed in Washington today.
On June 24, Congressional Republicans released a of comprehensive tax reform “blueprint” that would penalize most homeowners with a tax hike and remove incentives to homeownership that have existed for more than a century.
Realtors® are on high alert, focused on defeating any policy changes that would hurt homeowners.
“This proposal recommends a backdoor elimination of the mortgage interest deduction for all but the top 5 percent who would still itemize their deductions,” said National Association of Realtors® (NAR) President William E. Brown.
No bill has been introduced yet, but the consulting firm PricewaterhouseCoopers (PWC), commissioned by NAR, evaluated a tax reform plan modeled on the “blueprint.”
PWC’s study concluded that home-owning families with incomes between $50,000 and $200,000 would face average tax hikes of $815 in the year after enactment, while non-homeowners in the same income range would enjoy average annual tax cuts of $516. Further, home prices nationwide in the short run would fall by 10.2 percent.
The blueprint recommends cutting all but two deductions — for mortgage interest and charitable deductions — and doubling the standard deduction. These changes would make the mortgage interest deduction (MID) useless for nearly all middle-income homeowners.
Homeowners nationwide already pay 83 percent of all federal income taxes; they would pay an even bigger share under the proposed reform.
These changes would make the
mortgage interest deduction useless
for nearly all middle-income homeowners
NAR has released an interactive map tool showing how much homeowners currently benefit from the MID, sorted by congressional district. For example, in Pennsylvania’s 7th Congressional District — which includes portions of Delaware, Chester, Montgomery, Berks and Lancaster counties — 59 percent of homeowners claim the MID in 2015, cutting an average of $8,427 from their taxable income in 2015.
At that HUD forum in June, kicking off National Homeownership Month, Sec. Carson also said: "The importance of homeownership is apparent to all of us … security, certainty, safety, wealth creation, a path forward, self-sufficiency, a place to live with loved ones, to raise our families, the location of our neighborhood.”
Realtors® agree. And we support sensible tax reform, but we will fight hard against any policy that would harm homeowners.
In a four-county region where 238 municipalities each have their own way of governing real estate sales, you might think there would be an endless array of inquiries from our 11,000 members regarding these varied and often frustrating rules.
And while it’s true that our staff has fielded a wide variety of questions about the intricacies of municipal point-of-sale regulations, there are some we hear on an almost daily basis. Recently, many questions have focused on Act 133 of 2016, the new law that made important amendments to Pennsylvania’s Municipal Code and Ordinance Compliance Act.
In this column, I’ll give our best advice on the most common of these questions.
If a municipal inspection is required, how early should I schedule it?
The earlier, the better. We recommend that you call the municipality to schedule an inspection no less than 30 days before the scheduled closing. Municipalities generally don’t want to step on your sale, but the municipal staff needs sufficient time to perform its work.
An early inspection also gives your client advance notice of any issues with the home that could complicate the sale. The extra time allows them to complete repairs or negotiate with the other party about how the work will be done.
When Realtors® call our office regarding use and occupancy inspection or certificate issues just a day or two prior to settlement, it can be very difficult for us to help resolve them in a way that allows a transaction to move forward on time.
How does Act 133 define “unfit for human habitation?”
Under Act 133, homes that are deemed “unfit for human habitation” by an inspector are only eligible for a “temporary access permit.” While the meaning of “unfit” will always be somewhat subjective, Act 133 helps to narrow the definition, stating that it applies to a condition likely to be dangerous to the health and safety of occupants or neighbors, including things like fire risks, lack of sanitary facilities, vermin or overall disrepair that would cost half or more of the sales price of the property to repair. This term is generally limited to the worst types of violations.
True or False: Under Act 133, municipalities can’t require escrow before issuing a resale certificate.
True. The law forbids a municipality from requiring escrowed funds, bonds or other sorts of financial arrangements as a condition of issuing the certificate. A municipality may, however, require escrow for permitted work necessary to graduate from a temporary resale certificate to a full one.
True or false: Under Act 133, municipalities can no longer require municipal inspections before a real estate transaction.
False! If a municipality has a point-of-sale inspection ordinance, a seller is required to order an inspection and follow the procedures laid out by the process described in the ordinance. The main change implemented by Act 133 is that once a code inspection has been completed, the municipality must issue a resale certificate.
How do Act 133 rules apply to code/ordinance violations that were cited through some other process?
The law is directed only at violations that are found when a municipality decides to inspect a property at resale; it does not apply to violations discovered through prior inspections, or open municipal construction permits.
For violations already on the books that have advanced to some sort of judicial enforcement, the generally applicable municipal rules would still apply and a new owner wouldn’t be guaranteed a certificate. In addition, if the property has previously been cited under the Neighborhood Blight Reclamation and Revitalization Act, those rules would apply instead.
How do I know if a municipality requires a point-of-sale inspection?
Realtors® can visit our website's municipal database, which has information on each of the 238 municipalities in the four counties we monitor. The database includes information on point-of-sale inspections, sign requirements and millage rates.
On Nov. 7, Pennsylvanians voting in the municipal general election will have the opportunity to vote on a referendum question that could lead to substantial property tax reform. Though it hasn't yet received widespread attention, the Property Tax Relief and Homestead Exclusion referendum, if approved, would amend the state constitution to allow local taxing authorities to exclude from taxation the entire assessed values of homes within their borders.
Essentially, municipalities, counties and school districts would have the authority to zero out many residents' property taxes. Currently, these taxing entities can exempt only up to 50 percent of the median assessed home value. The Pennsylvania Association of Realtors® supports the Property Tax Relief and Homestead Exclusion Amendment, which would provide local taxing entities the flexibility of providing property tax relief to homeowners.
Essentially, municipalities, counties and school districts would have the authority to zero out many residents' property taxes.
Here is the question that voters will see: "Shall the Pennsylvania Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100 percent of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?"
There are a few important points to keep in mind. The exclusion would apply to homesteads, which doesn't include, for example, commercial properties or second homes. Even if passed, the referendum would not have an immediate effect on residents' taxes. State legislators would need to enact legislation setting the parameters for local taxing entities to follow. Most importantly, the legislation would need to provide school districts and municipalities the ability to raise other taxes – such as earned income – to offset the loss of property tax revenue. And those entities would not be required to exercise the new flexibility; in fact, only a handful of them utilize the full 50 percent exclusion limit allowed under existing law.
There will be more information about this referendum coming in the weeks leading up to the election.
In 1971, Ellen Renish took a temporary receptionist job at a real estate office. The broker saw potential in her, and the two-week assignment turned into two months, then two years as she worked her way up to agents' assistant, then became a Realtor® herself.
2017-18 Chairwoman, Suburban Realtors® Alliance
Hometown (born/raised): Mt. Airy (northwest Philadelphia)
Hometown (current): Collegeville
Years as a Realtor®: 41
Why did you first join the Alliance Board?
I was initially a member of the board of the Realtors Legislative Alliance, when it first formed, which later became the Suburban Realtors Alliance. I was happy to be a part of this innovative group. It truly was groundbreaking to have a regional political advocacy group. It was and still is very exciting to be a part of a group of dedicated individuals in our profession devoted to advocating for positive laws and regulations affecting us. We were trendsetters.
What do you see as the most important legislative issue for Realtors® right now?
Local ordinance inconsistencies, such as in point of sale requirements, create challenges for our Realtor members, even though we were able to affect the passing of the Municipal Code and Compliance Act. Much education still needs to be done, both for Realtors and municipal employees.
We need to prevent increases to realty transfer tax and tax on our services, while encouraging individuals who understand real estate to run for office at all levels of governments. I know you asked for what is the most important, but I can't come up with just one. I am a political junkie!!
Describe the first deal you ever closed.
The first deal I ever closed, believe it or not, was generated by my very first night on floor time (back in the day!). I received a call on a listing that my office had that was in a small subdivision under construction. I scheduled an appointment with the caller after talking to the person. I was really excited! Showed the property the next night to the very nice couple. I had just come back to work after having my first baby and was terrified that I was going to be working on commission only for a couple of months.
Our profession is intertwined with our personal lives.
We eat, sleep, drink and dream real estate.
How do you like to spend your time when you're not working?
I love to read. That is my R & R. I work out 5 days a week, and that gives me energy and contemplation time. I also love to dance whenever I have a chance. If you ask my family and friends, they say I am always working. It is hard to be turned off and tuned out for any length of time. Our profession is intertwined with our personal lives. We eat, sleep, drink and dream real estate.
What is one piece of advice you would give to a new Realtor®?
Create a system and stick to it. Be organized and focused. Be everywhere you can be, talking to everyone. Get out of your comfort zone, learn as much as you can! Be ethical, build your integrity, become a resource. That's more than one thing, but it all goes together.
What book(s) is on your nightstand?
Destiny and Power: The American Odyssey of George Herbert Walker Bush by Jon Meacham
I have served as President of Central Montgomery Association of Realtors (now Montgomery County Association). I was only the 3rd female President at that time in 1992. I also served as PAR President in 2002, the 5th female to serve. I am proud to currently serve as the Chairwoman of the SRA.
One last thought: I am the RPAC Queen here in Montgomery County. I cannot express how strongly I feel about investing in RPAC. It truly is insurance in our business. It is the easiest way to participate in the political process. And we all know that if Real Estate is our Profession, then Politics is our business!!
In February, I received a call from a Realtor® handling a home sale in a Delaware County municipality. With the closing only 2 weeks away, the code inspector in the borough was withholding a use and occupancy (U&O) permit until the seller completed a list of repairs to the home. These repairs included a cracked sidewalk, missing handrails, and window maintenance.
The borough’s decision to withhold a U&O permit might have been hard to challenge in 2016. In 2017, circumstances have changed for the better. Thanks to state legislation approved last year and implemented on Jan. 2, municipalities must now issue a permit allowing sales to move forward, regardless of the outcome of completed code inspections.
With the new law in hand, I contacted the township’s solicitor and explained the amendments that had taken place. To his credit, the solicitor listened carefully, reviewed the changes, and directed the borough to issue the permit. The sale went through on schedule. A happy ending!
Unfortunately, not every municipality is so willing to bring their inspection practices into compliance with the new state law, officially titled Act 133 of 2016. That’s where our services can make a difference for you and your clients. We’re here to help you understand the new law, take full advantage of it, and assist you when municipalities try to ignore it.
What Act 133 means to your clients:
Call the Suburban Realtors® Alliance if:
Nearly every day, the Alliance staff hears from Realtors® experiencing one of the problems above, so we have experience resolving them. We always recommend that agents schedule inspections at least 30 days before the scheduled closing, to allow sufficient time to work through any code-related issues.
Please note that not all municipalities require point of sale inspections for U&O permits, but many in southeastern PA do.
You can read more about Act 133 in the Issue Briefs section of our website, www.suburbanrealtorsalliance.com. To learn more about the various code inspections required in our four-county territory – including Chester, Delaware, Montgomery and Bucks – you can check out the SRA’s comprehensive Municipal Database at: http://www.suburbanrealtorsalliance.com/municipal-database/
(Photo: Governor Tom Wolf signs Act 133 of 2016, joined by Realtors® and legislators.)
LANSDOWNE, PA (June 23, 2017) – The Suburban West Realtors® Association (SWRA) has received a $4,000 placemaking grant from the National Association of Realtors® to help Lansdowne Borough create a public gathering space.
“The new gathering spot, the Lansdowne Landing, has enhanced an already vibrant community,” said SWRA Chairman Steve D’Antonio. “We are glad that this grant has helped create a place where friends and neighbors can come together, and it is our hope that the project will enhance Lansdowne’s historic downtown.”
Inspired by popular outdoor gathering places like The Porch in Philadelphia’s University City neighborhood, Lansdowne Landing has already become a community hub since it opened in May. Fifteen parking spots were painted over with a colorful ground mural by local artist Brad Carney, filled with tables, chairs and toys, and lined with plants. The space has been used for farmers markets, live music performances, meditation classes and other activities and events.
“The Lansdowne Landing planning committee and the Borough Council are thrilled to be partnering with Suburban West Realtors on this exciting project,” said Susan Williams, a member of Lansdowne Borough Council. “The grant monies will go toward finishing up the project, which includes: the creation of about 11 barrel planter/light posts; over 300 feet of string lights to cast a fabulous glow over the incredible ground mural; the three ornamental trees that will be planted in pots to finish the Lounge area of the space; and some final furnishings.”
The grant is intended to help Realtor® associations partner with others to plan, organize, implement and maintain placemaking activities in their communities. Suburban West Realtors® collaborated with Councilwoman Williams, Borough Manager Craig Totaro and Mayor Anthony Campuzano on the project. The Suburban Realtors® Alliance assisted in the grant application.
“Realtors® live, work, and volunteer in their communities, and they take immense pride in working to improve them,” D’Antonio said. “Placemaking can help foster healthier, more social and economically viable communities. It creates places where people feel a strong stake in their neighborhoods and are committed to making things better.”
Placemaking grants are awarded to local and state Realtor® associations to help them and their members initiate placemaking projects in the community, like turning a parking lot into a farmer’s market or a vacant lot into a playground. Realtor® associations and their Realtor® members are actively engaged in the community and know the neighborhoods and the properties that would benefit most from these improvement efforts.
Lansdowne Landing can be followed online at facebook.com/lansdownelanding. For more about National Association of Realtors® placemaking grants visit, realtoractioncenter.org/placemaking. For information about the Suburban Realtors® Alliance, which advocates for public policy that benefits local real estate markets and protects private property rights, visit suburbanrealtorsalliance.com.
The Suburban West Realtors® Association is comprised of approximately 5,800 Realtor® and affiliate members who serve communities in Chester County and Delaware County, and beyond. Its Realtor® members are licensed real estate professionals who subscribe to a strict code of ethics as defined by the National Association of Realtors®. For more information about the Suburban West Realtors® Association, please visit www.suburbanwestrealtors.com or call 610-560-4800.
Top photo : Lansdowne Mayor Anthony Campuzano, Suburban Realtors® Alliance Government Affairs Manager Erin Smist, and Suburban West Realtors® Association Board Member Shannon Diiorio and Chairman Steve D’Antonio stand at the edge of the Lansdowne Landing, across the street from the historic Lansdowne Theatre.
Bottom photo: Lansdowne Landing, a new community gathering space in downtown Lansdowne, will benefit from a $4,000 placemaking grant received through the Suburban West Realtors® Association.
The Suburban Realtors® Alliance offers free office visits to members of its three shareholder organizations: the Bucks County, Montgomery County and Suburban West associations of Realtors®.
A staff member will come to your location to discuss the topics below and answer any questions:
After noticing a slight increase in the number of use and occupancy inspection issues that are causing last minute delays in settlement, the Suburban Realtors Alliance (SRA) is reminding its members to request municipal inspections as early as possible.
“When use and occupancy inspection or certificate issues come up a day or two prior to settlement, it can be very difficult to resolve them in a way that allows a transaction to move forward on time,” said Jamie Ridge, president/CEO of the Suburban Realtors Alliance. “We always recommend ordering these inspections at least 30 days prior to the settlement date to give municipal staff plenty of time to complete their work.”
Approximately 50 percent of municipalities in the SRA’s four-county territory require some level of code inspection prior to a home sale. Knowing where these inspections exist, and ordering them well in advance of a settlement date, is an important way to ensure that real estate transactions stay on schedule, Ridge said.
For more information about the various inspection requirements in southeastern PA, visit the SRA’s Municipal Database at: www.suburbanrealtorsalliance.com. The database is a password-protected benefit for members of the Bucks County, Montgomery County and Suburban West Realtor Associations.
Suburban Realtors Alliance president/CEO Jamie Ridge addressed representatives from 13 boroughs at the April 27 dinner meeting of the Montgomery County Boroughs Association.
At Woodside Lodge in Schwenksville, about 50 borough administrators and elected officials listened as Ridge spoke about recent amendments to the Municipal Code and Ordinance Compliance Act. The presentation ended with a question-and-answer session.
"It was a great conversation about the issues faced by both municipalities and Realtors during the use and occupancy inspection process," Ridge said. "I thank the Montgomery County Boroughs Association for the invitation."
The Alliance maintains a municipal database of ordinances and other information that Realtors use to make sure they are complying with local regulations. Attendees received copies of their respective municipalities' database entries to review and, if needed, suggest changes.
(Photo: Nevin Scholl, president, Trappe Borough Council, Pat Webster, REALTOR and Trappe Borough Council member, and Jamie Ridge, president/CEO, Suburban Realtors Alliance.)
YARDLEY, PA – Yardley Borough’s Business Enhancement Team (BET) and volunteers from the Bucks County Association of Realtors® (BCAR) teamed up on Wednesday April 20, to help spruce up a space in the borough that in recent years has become a summer concert venue and gateway into the borough’s main street and Buttonwood Park.
The improvement project, funded through a $2,500 grant from the National Association of Realtors® (NAR), included assembling newly purchased café tables, matching chairs and planters for the public sidewalk space between 9 and 15 South Main St. on Buttonwood Place. Last summer the space was utilized as the venue for BET’s “Music on Main” outdoor concert series, which drew more than 1,200 people over nine Saturdays.
According to Borough Councilman Jef Buehler, chairman of Yardley’s BET, the project will help create a more festive atmosphere for the summer concert series, and encourage more visitors and residents to linger downtown throughout the year.
“Our downtown has become even more beautiful thanks to this unique partnership between Yardley Borough and local Realtors,” Buehler said. “This is a great example of how local stakeholders can team up to improve important public spaces and encourage more main street commerce on a limited budget.”
Maryellen O’Brien, who currently serves as president of BCAR, said that 13 Realtors from the area participated in the project.
“The Realtors who showed up today are all small business people who care deeply about their communities and the family’s that live here,” O’Brien said. “We’re thankful for the opportunity to provide the funding for this project through our national association and work directly with BET to make it a reality.”
For more information about the Yardley BET, visit their Facebook page at https://www.facebook.com/YardleyBET/
To learn more about National Association of Realtors® placemaking grants visit, realtoractioncenter.org/Placemaking.
The Bucks County Association of Realtors represents more than 3,400 members living and working throughout the county and the region.
WARMINSTER, PA – The Bucks County Association of Realtors® (BCAR) has received a $2,500 grant from the National Association of Realtors® (NAR) to help Yardley Borough transform a currently under-utilized space on South Main St. into a signature gateway for the growing Buttonwood Place development, Buttonwood Park and the heart of the borough’s downtown.
According to Borough Councilman Jef Buehler, chairman of Yardley’s Business Enhancement Team (BET), the grant will be used to purchase colorful outdoor café tables and matching chairs, along with planters for the public sidewalk space between 9 and 15 South Main St. on Buttonwood Place. Last summer the space was utilized as the venue for BET’s “Music on Main” outdoor concert series, which drew more than 1,200 people over nine Saturdays.
“Many of the attendees of last summer’s concert series said they would spend even more time enjoying our downtown and its businesses throughout the week if there were only more chairs and tables in this space,” Buehler said. “This grant will help us address that specific request while adding to the festive atmosphere of Music on Main and other events planned for the space.”
Maryellen O’Brien, who currently serves as president of BCAR, said the grant program is meant to help local Realtors® and their associations become more involved in the communities where they live and work.
“Realtors® live, work and volunteer in their communities and take immense pride in working to improve them,” O’Brien said. “These place making grants can help foster healthier, more social and attractive communities. All of these things can lead to a stronger and more stable local economy and housing market.”
For more information about the Yardley BET, visit their Facebook page at https://www.facebook.com/YardleyBET/
To learn more about National Association of Realtors® placemaking grants visit, realtoractioncenter.org/Placemaking.
The Bucks County Association of Realtors represents more than 3,400 members living and working throughout the county and the region.
Much has been written over the past year about a proposed new education funding formula for Pennsylvania schools. As reported, the new formula would mark an important first step on the road to getting the state’s dysfunctional education funding system back on the right track. Most importantly, the funding formula promises to put school districts throughout the Commonwealth on more equal ground when it comes to education appropriations from the state.
If enacted by the legislature and Gov. Tom Wolf, the new formula will: 1) provide funding based on the average number of students in each district over the past three years; 2) give extra funding for impoverished students and English language learners in each district; 3) consider the number of students attending charter schools in a district to help cover the cost of revenue that follows students to those schools; and 4) factor in median household income, the local tax burden and taxing capacity of each district to help gauge the population’s ability to generate school funding. All of these steps will help ease the tremendous burden that poorer school districts in our region have faced over the past several years because no formula has been in place in the state.
REALTORS® should strongly consider supporting this new formula because it will help eliminate some of the inequities in state funding that have caused property taxes to soar in certain districts, making homes in those localities extremely hard to sell. But even this major reform, worked out over the past year, can’t save school districts and tax payers from major budgetary pain ahead without further heavy lifting by state lawmakers who have been reluctant to make tough choices. First and foremost on the priority list after the funding formula is in place is reform of the state’s public pension system, which threatens to place a heavy burden on taxpayers and deplete funds available for critical long-term investments – including education – if left untouched.
While there is some disagreement regarding what should be done to fix the system, most experts agree that years of large benefit increases, negligent underfunding, and several recessions have left the state's public pension funds in a huge budget hole. It is estimated that the two largest pension systems in the state – covering teachers and other government employees—are underfunded by more than $50 billion dollars.
How serious is this issue? The PA Institute of Certified Public Accountants says that at the state level, taxpayer contributions to pension plans will increase to $3.3 billion, or nearly 10 percent of the budget, by 2020. That’s compared to the $1.7 billion, or 6 percent of the budget, made in contributions this year. According to the CPAs, that rate of debt increase is “fiscally unsustainable and will prove increasingly unacceptable to taxpayers who must either pay increased taxes or forgo other services to pay for these liabilities.”
The effect of the pension crisis on school districts is already being felt. Beginning this month, the annual contribution level for districts to the pension fund will jump to 25.8%, up from 16.9% only two years ago. By 2019-20, that number will skyrocket to 32.2%. The fact that school districts are being asked to pay for more and more of the pension costs has much to do with the growing property tax burden we are feeling at the local level in southeastern PA. And much like the added government spending needed to cover entitlement debt at the federal level in the massive Social Security and Medicare programs, these school pension liabilities are beginning to “crowd out” investments that are needed to ensure a strong work force for the future of the Commonwealth.
What’s needed to fix the system? Many pension and budget experts agree that moving new employees into a defined contribution plan with 401(k)-style benefits would be a good first step. A tougher, more impactful fix might include rolling back benefit formula changes that some experts say helped produce the present-day crisis. Looking to other states that have dealt more effectively with their own pension challenges will also be critical.
As both citizens of the state and small business owners, REALTORS should strongly consider voicing their support for legislators who make the tough choices necessary to put the pension system back on a sustainable path before it’s too late.
A recent poll conducted by the National Association of Home Builders and Wells Fargo highlighted the concern of home builders across the country over constantly tightening construction codes. It seems that approximately 35 percent of home builders recently polled are “extremely concerned” that construction codes are making new construction cost prohibitive “without a measurable improvement in safety or other benefits.”
Based on the stories we hear from our members on a weekly basis, I think it’s safe to say that home builders and REALTORS have much in common when it comes to feeling frustrated over building code creep. But while home builders are mostly concerned with codes that govern new home construction, our members must contend with the wildly inconsistent enforcement of building and property maintenance codes by municipalities at the point-of-sale (POS).
How difficult do some municipalities in southeastern PA make it to sell a home within their borders? According to our Realtor Association colleagues across the country, there are very few areas that face the same crazy rules and regulations regarding the sale of private property. So you want to sell your historic property in Caln Township? Better hope it meets the over-the-top standards of one of the strictest code enforcement departments in the region. Does your client live in Downingtown Borough? They may be required to replace the sidewalk, even if it’s only slightly worn. In Eddystone, be prepared for a team of municipal inspectors to descend on your client’s property on multiple occasions, and for those inspectors to find previously “missed” violations on follow-up visits. Are you selling a home to a rental property investor in Marcus Hook or Lower Chichester? That’ll be $5,000 to $10,000 for a new fire sprinkler system, please.
That’s the problem with the way municipalities are allowed to enforce property maintenance and building codes at the point-of-sale in Pennsylvania. While the state does have a “Uniform Construction Code” (UCC) in place for building and renovating homes, there is no such law that ensures a consistent standard for municipal home inspections. Worse yet, there is currently no fair way for home sellers or buyers to challenge an overzealous municipal code department that has decided to run rampant over their real estate transaction. When a township code inspector, manager or solicitor tells your client to “go ahead and sue us” if you want to challenge a particular demand, it’s all too clear that they’re holding the best hand.
So where do we go from here? The fact that we do have a uniform code in Pennsylvania for new construction gives me hope that a similar state-wide law may be possible for governing point-of-sale inspections. This type of law could include limitations on the scope of such inspections, and clearer guidelines for inspecting older homes. It could include strict limitations on the fees that municipalities can charge for such inspections, and set a stronger licensing standard for code officials. A ban on the absurd practice of requiring expensive infrastructure repairs – such as sidewalk and sewer lateral replacements – only at the point-of-sale would be a welcome addition to such a law. Finally, the law could set up a clear arbitration process – not controlled by the municipality or county – for instances in which home sellers or buyers feel the need to challenge a municipal code ruling without having to spend thousands of dollars on a lawsuit.
What are the chances of a municipal resale inspection law passing the PA legislature? With the UCC already in force for new construction, there is a strong precedent for this type of regulation. Is there language you’d like to see in such a law? Send your ideas to firstname.lastname@example.org
By Jamie Ridge, president/ceo, Suburban REALTORS Alliance
Here at the Suburban REALTORS Alliance (SRA) we’ve noticed a significant increase in REALTOR-awareness regarding municipal “point-of-sale” inspection requirements since the Marchlaunch of our “This Doesn’t Make Sense” campaign and website. This increased awareness has led to some very questionable municipal point-of-sale practices being brought to light by our members, and successfully challenged by the SRA.
In Chester County we learned that two boroughs – Phoenixville and Downingtown – were refusing to issue temporary use and occupancy certificates for required repairs that a buyer had agreed to complete after a sale. In both instances, the boroughs were in violation of the Pennsylvania Municipal Code and Ordinance Compliance Act (MCOCA), which states that: “a municipality shall not refuse to issue a use and occupancy certificate … on the basis of a substantial violation or require the correction of a substantial violation as a condition to issuing a use and occupancy certificate … unless the substantial violation renders the property unfit for habitation.”
After SRA staff reached out to each borough, they began issuing temporary certificates that allow real estate transactions to move forward.
In Delaware County, where the vast majority of municipalities have some form of point-of-sale inspection requirement, increased member input has allowed us to address Ridley Township’s refusal to issue temporary use and occupancy certificates for sidewalk repairs. Once again, township staff seemed unaware of the state law that requires the issuance of temporary certificates unless a property is being condemned.
Perhaps our favorite “success” story this year involves Suburban West member Nick Vandekar, who is also a member of the SRA’s board of directors. Nick was in the process of closing a deal in East Norriton Township in Montgomery County when their codes department mentioned a required sewer lateral repair and a hefty escrow requirement to allow a temporary U & O certificate.
Being quick on his feet, Nick was able to encourage a conversation between East Norriton staff and SRA staff. After being provided with an explanation of the enforcement tools that the Code and Ordinance Compliance Act provides to townships when home owners don’t comply with the terms of a temporary U & O permit, the township dropped their escrow requirement for Nick’s transaction, and future transactions. We think that is teamwork at its best!
The ultimate goal of the ‘This Doesn’t Make Sense’ campaign is to not only raise our members’ awareness of these issues, but also public awareness. By sharing the campaign website with your neighbors and clients, you can help us accomplish this goal. Once on the website – www.thisdoesntmakesense.org – guests can find information about the point-of-sale requirements in their municipality, and even send a pre-written message to their elected official about why these local real estate regulations do more harm than good.
When more of our local elected officials begin receiving these messages from residents of their townships and boroughs, perhaps they’ll think twice about introducing any further point-of-sale requirements. Even better, maybe they will strongly consider repealing inspection ordinances that are already in place.
After all, at a time when the economy is still recovering and home sales are just beginning to perk up, the last thing we need is more barriers to real estate transactions.
Based on a recent statement by President Obama and activity in Congress, it appears that Washington may finally be inching toward reforming secondary mortgage giants Fannie Mae and Freddie Mac. While very few elected officials and market experts dispute the need for reform, opinions of how it should be accomplished vary greatly. For future home owners and the REALTORS® who will serve their home buying and selling needs, the details of the final reform plan will matter a great deal.
To date, lawmakers in Washington appear to be aligning themselves with two different reform camps. The first, led by the president and a bipartisan group of moderate legislators, favors reforms that would significantly restructure the secondary mortgage market, while maintaining a critical role for the federal government. The second, led by conservatives in the House and Senate, would end the government’s long-time role as a guarantor in the secondary market altogether, leaving serious doubt that market liquidity would be maintained by private market entities during tough economic times.
The National Association of REALTORS® (NAR) has stated its opposition to the latter reform plan in terms that are loud and clear. According to 2013 NAR President Gary Thomas, “NAR supports a comprehensive approach to restructuring the secondary mortgage market, including winding down Fannie Mae and Freddie Mac, but believes any new secondary market entity replacing the enterprises must have an explicit government guarantee.”
Without that guarantee, Thomas correctly argues, the nation’s $10 trillion mortgage market could lose a functioning secondary market, leading to its ultimate collapse. The impact of that collapse would result in a dramatic destruction of wealth for middle class Americans that would see the value of their homes fall significantly. The lack of a functioning secondary market would also lead to mortgage rates that are unnecessarily high and unaffordable for many Americans.
While NAR does argue that a federal guarantee is a necessary ingredient of any successful reform effort, it also warns against a restoration of the old, broken system. That system, unfortunately, resulted in the creation of two entities – Fannie Mae and Freddie Mac – whose shareholders pushed private profits without demonstrating any concern for taxpayer losses.
Rather than an attempt to “fix” Fannie and Freddie, NAR is recommending that the president and Congress work toward the creation of new entities that are government-chartered, non-shareholder owned, and subject to strong oversight that “ensures they can accomplish their mission and protect the taxpayer.”
Along with the top priorities of protecting taxpayers and ensuring mortgage liquidity at all times, NAR is advocating for the following:
The American economy and individual home owners have benefitted greatly over the past 70 years from the stable source of mortgage funding provided through the government sponsored enterprises, Fannie Mae and Freddie Mac. Let’s hope that their shocking failures, ultimately brought on by a harsh recession and too much focus on shareholder profit over taxpayer protection, has created enough urgency in Washington to introduce meaningful reforms that will help us avoid another such calamity.
The result of such a reform effort, if it can be accomplished by a Congress and president that haven’t proven their ability to accomplish much lately, would be a new and improved secondary mortgage market that could help sustain home ownership and the national economy into the distant future.
Jamie Ridge is president/CEO of the Suburban REALTORS Alliance
Dear SRA members,
In response to the coronavirus/COVID-19 outbreak in our region, the Suburban Realtors® Alliance office in Malvern is temporarily closed, but our work continues uninterrupted.
Alliance staff are working remotely, starting this week through the end of March. We continue to monitor the news and legal notices for any issues that could affect the members of our three shareholder associations. Our municipal database remains online. We are in contact with government officials to ensure necessary public health measures cause as little disruption to real estate as possible.
Stay in touch.
As always, our Realtor® members are a vital source of on-the-ground information. Please continue to contact us with any questions, concerns or issues you’re experiencing. We are responding promptly to messages sent via email and phone.
As this outbreak progresses, we will send updates as necessary. In the meantime, we encourage you to utilize these sources of information.