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1998 Real Estate News You Can Use
First Quarter
SENIOR SELLERS ... DID YOU KNOW
Propositions 60 and 90 provide property tax relief by preventing reassessment when a person age 55 or older sells his/her existing residence and purchases or constructs a replacment residence worth the same or less than the original.
... Prop 60 requires that the replacement and the original properties be located in the same county.
... Prop 90 provides that when the original property is located in Los Angeles County, the replacement property may be located in any other California county if that county has adopted a similar ordinance.
... Relief includes, but is not limited to single family residences, condominiums and owners' living premises which are a portion of a larger structure.
SEISMIC GAS SHUTOFF VALVE INSTALLATION ORDINANCE
Effective February 5, 1998, residential buildings or structures, which contain fuel gas piping, that are sold shall have a seismic gas shutoff valve installed within 12 months of sale. Residential buildings or structures includes any single family dwelling, duplex, apartment building, condominium or townhouse. For condominiums and townhouses, the valve is required only on the line servicing the unit sold. If the complex has only a single gas line, a valve will be required for that line servicing the building. A valve must also be installed if a building permit is pulled on or after January 10, 1998 for work valued at more than $10,000 and on all new construction on or after September 1, 1995.
Second Quarter
USE OF HANDYMEN
Current law limits the use of unlicensed handymen by prohibiting them from performing jobs for which labor and materials exceed $300 and where the work is not 'casual, minor or inconsequential in nature.' The law also states that if work is going to cost more than $300, a licensed general contractor or subcontractor must be used. A State Senate bill will increase the amount from $300 to $600.
UTILITY LINE EXTENSIONS
Last year the California Public Utilities Commission adopted changes to the rules affecting electric and gas utility line extensions that goes into effect July 1, 1998. The new rules will result in higher costs for residential and commercial utility line extensions. Where customers have signed agreements under the old rules but have not yet proceeded, they will have one year from the July 1, 1998 effective date to receive a building permit or have plans approved, agree to pay all monies due to the utility and be ready for service within this period.
APARTMENT INSPECTION REFORM PLAN
The Los Angeles City Council and Mayor Riordan have approved the most comprehensive housing reform in Los Angeles history, creating a program of periodic apartment inspections that will be funded by a $1 monthly fee to be paid by renters. The program should allow the city to inspect all 700,000 rental units within three years. The ordinance will transfer authority for apartments inspections to the more tenant friendly Housing Authority which will hire 64 new inspectors. Apartment owners will be given 30 days notice before the periodic inspections take place. The law also allows inspectors to cite tenants if they are found to be responsible for the dilapidated condition of the apartments. The ordinanxe will apply to two or more rental units.
Third Quarter
INSURANCE DISCOUNTS
Homeowners can receive insurance discounts if a home security system is instaled in the property. A basic alarm system and dead bolts on exterior doors give customers a 7% credit, but the discount rises to 12% if the system alerts police, the fire department or a private security firm.
PMI CANCELLATION
President Clinton has signed into law legislation requiring lenders to start automatic cancellation of private mortgage insurance when a borrower's home equity reaches 22%. The law, which goes into effect July 29, 1999, will not preempt any state statutes in effect before January 2, 1998. It also gives the force of law to a homeowner's existing right to cancel PMI when equity reaches 20%.
LOW FLOW ORDINANCE
The Los Angeles City Council has passed a new ordinance effective January 1, 1999, to require the installation of ultra low flow toilets at point of sale. The new law will take away the current provision of using a dam or a bag. This will apply to both single family homes and muilt-family residences.
Fourth Quarter
MEGAN'S LAW
This law requires that, effective July 1, 1999, sales and lease agreements for 1 to 4 residential units contain a notice stating that sex offender data bases are maintained by law enforcement agencies and that the public may access them. The law states that after the notice is given, the seller/lessor and broker are not required to provide additional information regarding the proximity of registered sex offenders, and that a registered sex offender may not bring any cause of action against the disclosing party.
"TIE-DOWN LA"
Owners of homes and apartments who want to safeguard their dwellings against potential earthquake damage can apply for below-market rate loans from the Los Angeles Housing Department. The seismic mitigation loan program offers loans up to $25,000 for single family homes and $60,000 for multi-family dwellings at discounted rates. Seismic mitigation may include bolting the property to its foundation, installing gas shut-off valves, bracing hot water heaters and strenthening chimneys. All work must be done by license contractors. Call 213-367-9280 or email dfleischman@LAHD.ci.la.ca.us for more information.
LOAN LIMITS RAISED
Effective January 1, 1999, Fannie Mae and Freddie Mac will raise their national conforming loan limits from $227,150 to $240,000. The action is in response to a 5.2% increase in the average price of a single family home over the last year.
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