2020 – 1st Quarter Real Estate Update

REAL ESTATE UPDATE LAKE TAHOE

Chase International just released their local statistics for the 1st quarter at South Lake Tahoe.  I must say some of the numbers are weaker than I thought they would be.  Keep in mind while the coronavirus picked up steam in March, most of March sales volume occurred from business written in January and February.  Nonetheless we had a strong first quarter for condo sales increasing a whopping 93% from this time last year to $13,571,000.  Note that condo sales increased by 11% on the Nevada East Shore.  However single family sales volume declined 14% to $54,321,000 at South Lake while Nevada declined 29%.  The median sales price for condos rose by 11% to $352,000 while single family homes declined 20% to $444,000.  Not sure what’s up with the condo market but that’s where the action is right now.

I’m sure you heard about the Nevada Governor Directive where open house showings, and in-person showings of single family and multi-family residences currently occupied by renters of real estate on the market for sale, are hereby prohibited for the duration this Directive is in effect.  However you can transfer ownership, as long as you do not need to view the property interior, inspectors do not need to go inside, appraisals are done from the exterior or the buyer waives his rights.  The new owner still has to honor the current lease and also cannot evict until this Directive is over.

I can be reached at 775-309-8454 if you need assistance.  My email is RStiles@TahoeSouthRealty.com. Be safe everyone!

Home Inspections

Home Inspection

I was curious as to how the home inspectors were handling the coronavirus so I reached out to Josie at TAG for an update.  Her response is below.
Hey Robert,
As of now, we are still working our inspections that were on the books.
We usually were 14 weeks fully booked with 2 per day.
What we did to minimize exposure is spread out our inspections doing 1 per day only which will keep us busy till about 3 weeks into April.
And with restrictions of course.
Properties need to be vacant, no tenants, buyers or sellers present and we wear our protective gear. 

Hope this helps,
Josie& Alan

Tag, inc

March 2020 NV East Shore Update

REAL ESTATE UPDATE LAKE TAHOE

We had 16 residential home/condo sales on the Nevada East Shore during March. A 23% increase from the 13 sales in March of 2019. The median sales price also increased from $900,000 to $1,190,000 for residential home sales yet the average days on market declined from 223 days last year to 142 days. For those curious if any properties were withdrawn from the market there were 16 withdrawn this year as compared to only 7 in March 2019. Agents are finding other ways to show your property at this time. I have been using video for my listings as well as for buyers not wanting to venture inside our current listings. I am also wearing gloves at this time and have noticed owners placing sanitizer near their front doors for everyone’s use. Be safe everyone. Learn more by visiting RealEstateLakeTahoeStiles.com for more information. Call 775-309-8454 to schedule an appointment.

California Association of REALTORS® Guidance Statement

Coronavirus

“Governor Newsom and the State Public Health Officer issued Executive Order N-33-20 requiring all Californians to stay home except as needed to maintain continuity of operations in 16 infrastructure sectors. This supersedes all existing local city and county orders that are less restrictive. The real estate industry is not exempt from this prohibition except as needed to maintain “continuity of operation … of … construction, including housing construction.” Therefore, REALTORS® should cease doing all in-person marketing or sales activities, including showings, listing appointments, open houses and property inspections. Clients and other consumers are also subject to these orders and should not be visiting properties or conducting other business in person. 

Property management and repair work, which generally involves maintaining sanitary and safety conditions is permissible. Additionally, many other aspects of the real estate industry can continue to occur without in-person contact, including documentation and signing, and in many circumstances, closings. Other activities may also be managed remotely, though there may be some difficulties.”

Disclosure of Potential COVID 19 Exposure

What to do if an agent learns that a visitor to the property, including potentially another agent, tested positive to COVID 19 — is disclosure required or recommended?

This information would be material to anyone at risk for potential exposure but raises the question of whether it’s a property concern or a people concern. Is the concern that the property site itself might have been or is contaminated? Or is the risk of having been around a particular person? And was this person on or offsite from the property?

Legally, known material conditions related to the property should be disclosed. Per the CDC, it’s possible the virus can spread from contact with infected surfaces or objects on a property, meaning a person could get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes, but this is not thought to be the main way the virus spreads. However, the more relevant aspect to potential exposure pertains to the timing of contact with the property and the infected person and any others who came for a period thereafter. This is not purely or a per-se property condition. But to be on the safe side, a disclosure could be made. Disclosing through the MLS would not be the most effective way to communicate this information because (a) no further showings should be ongoing under the order of March 19, 2020, and (b) the concern at issue is backward-oriented and person-focused (and not a permanent property condition) for those potential visitors and/or agents identifiable from lockbox or other records as having been at the property during that time period with the exposed person. Notice could then be given in a targeted way.   

If making a disclosure, it should be done in a generic way so as not to invade privacy or implicate personal information. This would mean not using names but a general description along the line of “a visitor to the property on Xdate has tested positive for COVID 19.” 

“© California Association of REALTORS®, Inc. Reprinted under a limited license with permission.”

Relief for Taxpayers Affected by Ongoing Coronavirus Disease

presidential seal

I. PURPOSE

On March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (Emergency Declaration). The Emergency Declaration instructed the Secretary of the Treasury “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).” Pursuant to the Emergency Declaration, this notice provides relief under section 7508A(a) of the Internal Revenue Code for the persons described in section III of this notice that the Secretary of the Treasury has determined to be affected by the COVID19 emergency.

II. BACKGROUND

Section 7508A provides the Secretary of the Treasury or his delegate (Secretary) with authority to postpone the time for performing certain acts under the internal revenue laws for a taxpayer determined by the Secretary to be affected by a Federally declared disaster as defined in section 165(i)(5)(A). Pursuant to section 7508A(a), a period of up to one year may be disregarded in determining whether the performance of certain acts is timely under the internal revenue laws.

III. GRANT OF RELIEF

The Secretary has determined that any person with a Federal income tax payment due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in this section III (Affected Taxpayer). For an Affected Taxpayer, the due date for making Federal income tax payments due April 15, 2020, in an aggregate amount up to the Applicable Postponed Payment Amount, is postponed to July 15, 2020. The Applicable Postponed Payment Amount is up to $10,000,000 for each consolidated group (as defined in §1.1502-1) or for each C corporation that does not join in filing a consolidated return. For all other Affected Taxpayers, the Applicable Postponed Payment Amount is up to $1,000,000 regardless of filing status. For example, the Applicable Postponed Payment Amount is the same for a single individual and for married individuals filing a joint return. In both instances the Applicable Postponed Payment Amount is up to $1,000,000.

The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year. The Applicable Postponed Payment Amounts described in this section III include, in the aggregate, all payments described in the preceding sentence due on April 15, 2020 for such Affected Taxpayers.

No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any tax return or information return.

As a result of the postponement of the due date for making Federal income tax payments up to the Applicable Postponed Payment Amount from April 15, 2020, to July 15, 2020, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to pay the Federal income taxes postponed by this notice. Interest, penalties, and additions to tax with respect to such postponed Federal income tax payments will begin to accrue on July 16, 2020. In addition, interest, penalties and additions to tax will accrue, without any suspension or deferral, on the amount of any Federal income tax payments in excess of the Applicable Postponed Payment Amount due but not paid by an Affected Taxpayer on April 15, 2020.

Affected Taxpayers subject to penalties or additions to tax despite the relief granted by this section III may seek reasonable cause relief under section 6651 for a failure to pay tax or seek a waiver to a penalty under section 6654 for a failure by an individual or certain trusts and estates to pay estimated income tax, as applicable. Similar relief with respect to estimated tax payments is not available for corporate taxpayers or tax-exempt organizations under section 6655.

IV. DRAFTING INFORMATION

The principal author of this notice is Jennifer Auchterlonie of the Office of Associate Chief Counsel, Procedure and Administration. For further information regarding this notice, you may call (202) 317-3400 (not a toll-free call).

What responsibilities does a tenant have?

Tenants and Landlords

The tenant’s duty to maintain

If the leased premises is in need of repair, whether minor or major, the tenant needs to notify the landlord of the condition. The notification may be made orally, or in writing.

After advising the landlord of the need for repairs, the tenant may make the repairs and deduct the cost of the repairs from the next month’s rent if:

  • the landlord fails to make the necessary repairs within a reasonable time after notice of the defect; and
  • the cost of repairs does not exceed the amount of one month’s rent, called the repair and deduct remedy.

The repair and deduct remedy may not be used more than twice in any 12-month period. [CC §1942(a)]

However, the repair-and-deduct remedy is not available to the tenant when the need for repair is created by the tenant’s conduct. [CC §1942(c)]

Over the course of the tenancy, normal wear and tear is expected to occur. Thus, the landlord may not charge the tenant for any minor defects due to normal wear and tear that are discovered in the pre-expiration inspection.

However, the tenant breaches their duty to care for and maintain the premises when the tenant:

  • contributes substantially to the dilapidation of the premises; or
  • substantially interferes with the landlord’s duty to maintain the premises. [CC §1941.2(a)]

For example, a tenant does not notify their landlord of a leak in the roof that is causing damage to the ceiling of the rental unit. Eventually, the ceiling falls down, causing damage to the tenant’s personal property, the walls and the floor coverings. Here, the tenant interfered with the landlord’s duty to maintain the property since the tenant failed to:

  • notify the landlord of the leak in the roof; or
  • repair the leak.

Therefore, the tenant is liable to the landlord for the cost of repairing the damaged ceiling since they neglected to report the water seepage.

A reasonable time for the landlord to make necessary repairs after notice is 30 days, unless the need to repair is urgent and requires more immediate attention. [CC §1942(b)]

The landlord’s duty to maintain

A residential landlord has a general obligation to:

  • put a residential unit in a condition fit for occupancy prior to leasing; and
  • repair all unsafe and unsanitary conditions that occur during occupancy that would render the unit uninhabitable.

Further, all residential rental and lease agreements automatically contain an implied warranty of habitability. The unwritten warranty imposes a contractual duty on a landlord to keep their residential units fit for human occupancy at all times. [Green v. Superior Court of the City and County of San Francisco (1974) 10 C3d 616]

The landlord’s statutory obligation to maintain their residential units requires the landlord to correct major defects interfering with the tenant’s ability to live on the property, such as a lack of hot water or a leaky roof.

The residential landlord has an obligation to care for and maintain all major and structural components of residential rental units. They are also further obligated to repair minor defects. Minor defects include such conditions as:

  • leaky faucets;
  • faulty electrical switches; and
  • failed locks or latches.

Typically, a residential landlord agrees in the rental or lease agreement to care for and maintain the property, which includes the repair of minor defects. [See RPI Form 550]

The landlord’s failure to repair or replace minor defects constitutes a breach of provisions in the rental or lease agreement. The landlord who breaches the lease agreement by failing to make minor repairs is required to reimburse the tenant for reasonable costs incurred by the tenant to cure the defects.

So that both tenant and landlord are on the same page about the unit’s condition upon move-in, they need to complete a Condition of Premises Addendum. [See RPI Form 560]

When the unit is furnished, the landlord and tenant also need to complete a Condition of Furnishings Addendum. [See RPI Form 561]

Before the tenant vacates, the landlord needs to conduct a pre-expiration inspection. If the landlord finds any damage sustained to the unit, fixtures or furnishings, they will record these on a statement of deficiencies. The cost to repair any defects not corrected before the tenant moves out will be deducted from their security deposit. Further, the landlord may demand payment for any damages exceeding the security deposit. [Calif. Civil Code §1950.5(b)]

Provided by ft Editorial Staff