An important thing to consider if you are paying off a home equity line of credit, also referred to as a HELOC. These are usually open ended loans that allow you to borrow on them for a designated period of time. Therefore, if you pay off the balance, the mortgage that is the security interest for repayment may not get discharged. When paying the loan in full, you must request in writing to have the loan marked paid in full and discharged.
New laws went into effect on December 1, 2016 which give overtime a whole new meaning. The Department of Labor, Wage and Hour Division, finalized the changes to the Fair Labor Standards Act last May. The new changes guarantee a minimum wage for all hours worked during the work week and overtime pay of at least one and one-half times the employee’s regular rate of pay for hours worked in excess of 40 in a work week.
The Department of Labor (DOL) has updated the overtime law before, but this new implementation is quite different from past adjustments made. This change increases the White Collar Exemption salary threshold by more than 100%. Generally “white collar” exemptions in the past applied to people that worked in offices or other professional environments. Below are the four major changes:
The White Collar Exemption salary threshold was previously $455 per week or $23,660 per year. This has now increased to $913 per week or $47,476 per year. This means that salaried employees making less than $47,000 per year must be compensated for anything over 40 hours.
The Highly Compensated Employee salary threshold has increased from $100,000 per year to $134,004 per year.
There will now be automatic updates to the salary threshold every three years with the first update due to go into effect on January 1, 2020.
The final rule is quite involved with lots of exemptions, details and clauses.
Two key factors are:
The 40-hour benchmark must be calculated on a weekly, rather than a monthly basis. Therefore, an employee that works a lot of overtime at the end of the month, but less than 40 hours at the beginning of the month, is entitled to overtime for any week that they worked for more than 40 hours.
Employees do not have to be approved for the overtime that they work.
The new law has wide ramifications beyond employees making less than $47,476 a year. Employers will need to balance rather they will adjust an employees’ pay, modify their job descriptions or add in disciplinary actions for working overtime. This can all have an impact on employee morale and the amount of time off that employees are given.
It is important for an employer to figure out which of their employees will fall under this new law. The DOL has published a fact sheet which can be found at https://www.dol.gov/whd/overtime/fs17a_overview.htm, to assist with this. If an employer fails to comply with this law they may be subject to an IRS audit, DOL audit or even litigation. An employer will still have the flexibility to choose the options that work best for their workplace
For those that may not know, there is a specific law that covers Condominiums and how they are set up. That law is RSA 356-B and is known as the Condominium Act. Much of this Act covers the establishment of a Condominium, but in 2010, RSA 356-B:70 was added which established a Committee to Study the Laws relating to Condominium and Homeowners’ Associations. The governance of associations has frequently been a problem area.
As a result of that Committee, the Condominium Act was amended and a number of new laws took effect on August 1, 2016. The changes target governance of the Association. Associations often operate informally and consult an attorney only when problems arise. The new laws are aimed at providing more structured governance and greater protection to unit owners once the condominium has been established.
As recently as August, 2017, a woman was accused of embezzling $100,000 from a NH condo association. She was arrested and charged with two counts of theft by unauthorized taking. This charge is a Class A felony and is punishable by a maximum sentence of 7 ½ to 15 years in prison. This is not a random thing, theft of a condominiums funds happens more often than you would think.
One of the major ways these thefts occur is by one of the board members receiving a kickback for work performed or by having personal work done for themselves and rolling it into the associations bill. With that in mind and in an effort to control this type of theft, one of the new laws requires any contractor licensed by the State of New Hampshire who performs work to disclose on the bill any referral fee paid by the contractor.
Some other key changes are:
• Boards may not use social meetings to evade the open meeting requirements
• Roberts Rules of Order Newly Revised are the default procedural rules
• The board must send proxy voting forms with control numbers assigned for each owner
• Electronic noticing and meetings are allowed
If you are a condominium owner don’t be afraid to ask questions of the board. Make sure that you regularly see the bank statements rather than to just rely on being shown a copy of the financials once a year at the annual meeting. If you do find that a board member has been embezzling, consider taking legal action, don’t just let it slide. Often, once they think they got away with something they will continue taking advantage of you in the future.
Under Homestead Exemption laws any property designated as a homestead is exempt from execution and sale by creditors for the payment of debts. The protected amount differs in each state, but in New Hampshire every person is entitled to $120,000 of his or her homestead to be exempt from the rights of creditors.
There are exceptions to the above and the following debts have precedence over the rights of homestead:
• The collection of taxes;
• The enforcement of liens of persons having done work for the construction, repair or improvement of the homestead;
• In the enforcement of mortgages on the property;
• In the enforcement of liens filed by homeowner or condominium associations for unpaid assessments.
No deed can convey or encumber the homestead right, except for a mortgage made at the time of purchase to secure payment of the money used to purchase the home, unless it is executed by the owner and spouse, if any. This is why, when a new mortgage is taken out or the property is conveyed, the husband and wife must both sign to release rights of homestead.
Just as soon as one type of wire scam is uncovered it seems like a new one pops up. One of the latest versions involves the perpetrator sending the funding lender wiring instructions to a legitimate account belonging to an innocent, unknowing title company. In verifying the account number, the lender will see that the funds are being wired to a legitimate title entity.
Once the wire has gone through, the scammer contacts the unknowing title company and states that the funds were sent in error. The scammer gives the title company instructions for sending the funds back, but those instructions are fraudulent and the funds will be sent to the scammer. The title company then confirms that it was not entitled to the funds and sends them back using the account information that it has received from the scammer.
The lesson to be learned here is that if you receive wired funds in error, the wire should be rejected. In doing so, the funds will automatically go back to the original sender.
Everyone needs to be vigilant in dealing with wire transfers, verifying information by directly contacting the other parties through secure channels and being skeptical when instructions are changed at the last minute or appear out of the ordinary.
In a money wiring scam, a dishonest person lies and tricks you into wiring money to them.
The scammer might say:you won a prize, or inherited money, but you have to pay fees first;
- you won the lottery, but you have to pay some taxes first;
- a friend or family member is in trouble and needs you to send money;
- you need to pay for something you just bought online before they send it;
- you got a check for too much money and you need to send back the extra.
These are all tricks. If you wire money, the scammer will keep it and you will not get your money back.
Wiring money is like sending cash. If someone you do not know asks you to wire money it is probably a scam. Scammers are clever and they try to make things look real. They are good at fooling people and they also want to rush you. They want your money before you have time to think, but before you do anything, stop and check.
If you have already wired money to someone who contacted you…that money is probably gone. Remember, if you gave money to a scammer once, you will probably be targeted again . The best thing you can do to help yourself and others is to report the incident to the Federal Trade Commission.
Lender’s Policy – If you have ever taken out a mortgage on your home it is likely that the lender required you to purchase a title insurance policy. Then lender’s policy is also known as a loan policy and most lending institutions require it as a way to insure their security interest in the property. The policy protects the lender for as long as the loan is outstanding.
Owner’s Policy – As a buyer, you also want to protect your investment and your ownership rights in your property. That is why you should purchase an owner’s policy of title insurance. This will protect your rights as the homeowner for as long as you or your heirs have an interest in the property.
Both of these title insurance policies pay valid claims along with the legal fees to defend against hidden title issues. They also help to decrease ownership risks by providing a thorough title search prior to the issuance of either policy.
Refinance Transactions – If you are refinancing your property you may be surprised to see that you are required to purchase a new lender’s policy of title insurance. This is because a lender’s policy only provides coverage for the life of a loan. When a home is refinanced that previous loan is paid off and the policy ends. Therefore, a new lender’s policy will be required. Because your owner’s policy provides coverage for as long as you own your home and additionally to your heirs, there is no need to purchase a new owner’s policy when refinancing
New Hampshire has two types of tenancy, Tenants in Common and Joint Tenants with Rights of Survivorship (JTWROS). This has been the law in New Hampshire since November 13, 1959.
Every conveyance of real estate to two or more persons creates a tenancy in common pursuant to New Hampshire RSA 477:18. That means, that if the person preparing your deed fails to state the type of tenancy, you will automatically become tenants in common. When one person dies their half of the property will pass to their estate according to the probate process.
If you want to have your property pass to the surviving person that must be specifically stated. Your deed must state after your names “as joint tenants with rights of survivorship”. The property automatically passes to the surviving joint tenant without the need of filing probate. You simply record the death certificate and in future deeds reference the death and state that you are the surviving joint tenant.
The failure to state tenancy, or stating it incorrectly, happens quite often, especially when the deed has been prepared by an out of state attorney who may not be familiar with our laws. Different states have different types of tenancy laws. We sometimes see a husband and wife owning property and thinking they owned it as joint tenants with rights of survivorship. One spouse dies and it is not until the other gets ready to sell the property that this is discovered. It can create quite a mess, take a while to clear up and ultimately delay the closing.
So use this information to take a look at your deed and be sure that you own your property the way you wanted. If you don’t, you can have a Quitclaim Deed prepared and record it to establish the proper tenancy that you want. Please give us a call at 603-836-5309 if we can assist you in this process.
In an update year, assessments as of April 1st should be fairly representative of market value. Because sales are based on emotional likes and dislikes of buyers, there is no one right number, but rather a range of numbers depending on the negations and motivations of the buyers and seller involved in a transaction. The industry standard indicates that plus or minus 10% is reasonable because an opinion of value is subjective and will vary by this amount.
When there is a decline in the real estate market, taxpayers may see that their assessment is higher than what they could expect to sell their property for (market value). That does not invalidate the towns assessment of your property when they account for the local assessment to sales ratio because every year the New Hampshire Department of Revenue Administration (DRA) calculates an equalization ratio. This ratio represents the difference between the assessment and the market transactions (sales). Here is an example:
In the town where you live in New Hampshire, the DRA published the an equalization ratio of 1.15% as of 4/1/2017. The assessment on your home is currently $300,000. Homes similar to yours are currently selling for $250,000. You may think that you are being over assessed, but this is where the equalization ratio comes into play.
To determine the market value of your home you would take the assessment of $300,000 and divide it by the ratio of 1.15% which gives you an indicated market value of $260,870. Although this number may be higher than the $250,000 sale price, it is considered fair and equitable so long as it falls within the 10% allowance.
So long as all properties are being assesses similarly, the assessments, even if they are higher than current market value are fair and equitable because everyone is being treated the same. The real estate market is constantly fluctuating which makes comparisons of assessment and sales very difficult. The Form PA-34 that you complete at closing is one of the tools that the DRA uses in determining the equalization ratio.
Here are eight housing predictions from the experts:
- Prices will continue to rise, but more slowly. In 2016, prices rose every month up until October. The prediction is that price increases will hold steady because homebuyer demand is stronger than it was at this time last year.
- Affordability will worsen because the share of homes affordable to someone earning the median income is not. This trend will be intensified by a continued shortage of low to moderate priced inventory and rising mortgage rates.
- Mortgage rates will be volatile. By historic standards the rates are still low, but may be rising a bit. For 2017, the Fed’s anticipate there to be three hikes, making it the best time to buy or refinance now.
- Credit availability may improve. The president elect and his team have indicated that they hope to roll back much of the post financial regulation which came about as a result of the Dodd-Frank Act. This act regulates the financial market and rolling it back could open up banks to lend more freely to a wide range of would be buyers.
- Supply will improve, but remain short. Declining inventory was a defining feature of the housing market in 2016. This led to prices increasing rapidly and discouraged some would be sellers from entering the buying fray. There are some signs that the coming year may see a bump in housing supply, at least on the new home front.
- More millennials will become homeowners and renters. According to Zillow, half of all buyers are under the age of 36. Millennials are adults born after 1980 and are not the largest adult generation and make up the greatest percentage of the workforce.
- Competition will grow fiercer. In 2017 sellers will maintain the edge over buyers as demand is expected to increase. In 2016, according to Redfin, the typical homes stayed on the market for just 52 days.
- Political uncertainty will be replaced with policy uncertainty. The president elects pledge to spend more on infrastructure, to cut taxes and to crack down on immigration could impact the housing market. However, opinions vary widely on this.