The "Tip of the Day" will not change every day, but periodically a new "Tip" will appear in the site. The "Tip" is designed to provide insight, knowledge, suggestions and information regarding matters related to the purchase and sale of property in the State of New Jersey. The "Tip" is not legal advice and is not to be considered legal advice. If you have any input, information, suggestions, or other relevant insight regarding "Tip" matters, please feel free to contact the site. Your relevant insight might be posted in subsequent "Tip" postings. Visit the site as often as possible to see the "Tip of the Day".
Fall 2011 - Today's "Tip of the Day"
Bulk Sale Notice Revisited - I hope everyone enjoyed the Winter 2010/2011 "Tip" regarding Bulk Sale Notice requirements in residential transactions. Frankly, I felt it was one of the more insightful and informative "Tips" to date. Well, on September 14, 2011, Governor Christie wiped out most of the advice in that "Tip" by signing legislation that exempts individuals, estates and trusts involved in purchasing one and two family residential and certain seasonal rental properties from the Bulk Sale notification requirements. According to the new law, purchasers of residential property previously used for rental purposes (in most cases) will not be required to file a Bulk Sale notice with NJ Division of Taxation and will not be held liable for taxes that a Seller failed to pay. However, note that properties owned by corporate entities, including an LLC, are still subject to the Bulk Sale notice requirements, and purchasers of such properties are well advised to file a Bulk Sale notice at least 10 days prior to closing.
For now, this is the new rule. If anything changes, I will be sure to revisit the issue again.
Summer 2011 - Today's "Tip of the Day"
Vacations - Yes, it's summer and we all love summer vacations. Unfortunately, vacation schedules can often interfere with the processing of your sale or purchase transaction. Proper processing of your transaction will require the full attention of the professionals you hire, and will require your complete attention as well. Ask your Realtor if he/she has vacation plans and whether any such plans will affect your transaction. Ask your lawyer the same question. More importantly, be mindful that your own vacation plans may make you unavailable during a crucial time in your transaction. Proper planning with this issue in mind will go a long way toward properly and efficiently selling or purchasing your home. Winter 2010/2011 - Today's "Tip of the Day"
Bulk Sale Notice Requirements for Rental Properties - The New Jersey Sales and Use Tax Act, adopted in 1966, set forth "bulk sale" notice requirements for businesses selling a "bulk" of the business assets. The Act is designed to provide the NJ Division of Taxation with notice of asset sales for the purpose of collecting any outstanding tax liabilities owed by the seller. On June 28, 2007, the landscape of bulk sale notification requirements changed dramatically when then Governor Corzine signed into law N.J.S.A. 54:50-38, expanding the scope of bulk sales notice requirements to all transactions involving sale of a business, including the sale of real estate used as a business, i.e. rental properties! This means that real estate attorneys must now, as a condition of closing, comply with "bulk sales" notification requirements and comply with any escrow of sales proceeds as determined by the NJ Division of Taxation when closing on the purchase of a property currently or formerly used as a rental property!
Buyers...Failure to comply with the bulk sales notice requirement may mean that you, yes you, may be deemed liable for the seller's outstanding tax obligation.
Sellers...If your NJ tax obligations are not current with regard to your rental property, be prepared to post a closing escrow of sales proceeds as determined by the NJ Division of Taxation.
Final Note...Are you buying a home and NOT hiring an attorney to handle your closing? Will the title company handling your closing to save you a few bucks complete all the bulk sales notifications to protect you?
Summer 2010 - Today's "Tip of the Day":
If It's Broken..FIX IT!! I recently represented a gentleman selling his home. Apparently, the dishwasher did not work. He never told his realtor, he never told me, but he knew it. In fact, his tenant never used the dishwasher because it didn't work. Sure enough, the home inspector noted that the dishwasher did not work, and the buyer requested repair. My client insisted that the dishwasher worked, and we advised the buyer accordingly. Sure enough, again at final walk-through, the dishwasher did not work and now the buyer wants a closing credit of $1,000.00 for a new dishwasher! My client ended up paying a significant closing credit for a simple repair that he knew about all along. So, Sellers...If it's broken, fix it now, fix it before you go under contract, fix it before an inspection, but don't hide it because it likely cost you in the end.
Special Edition - Today's "Tip of the Day":
Tax Credit - BEWARE!! As we all know, the First Time HomeBuyer Tax Credit was extended. Great News! However, remember that a Buyer must be under contract prior to April 30, 2010 to qualify. Under these terms, if a Buyer signs a contract on April 25, 2010 and the deal falls through for whatever reason, the Buyer may not have time to find another property, negotiate a deal and sign a new contract prior to April 30, 2010! Bottom line is, if you want to qualify for the tax credit, do not wait until the last few days of April, 2010. If you do, you run the risk of losing the credit or perhaps being forced to accept unfavorable contract terms in order to protect your right to the credit.
Winter 2010 - Today's "Tip of the Day":
Winter Inspections - As you might imagine, certain property systems such as pools and air conditioners cannot be used during colder winter months without causing damage to the system. This often presents a problem when a home is being sold in the winter because the buyer is unable to properly complete an inspection of these systems prior to closing. Often, a buyer will request that a seller place money in escrow until the weather is warm and the systems are available for inspection. To avoid closing delays or escrow of funds due to this issue, have your systems serviced annually by licensed professionals and keep all records. If you have a pool, the pool should be opened and closed each season by a pool professional, and the professional should certify that the pool functioned properly at the time it was closed. In the end, there is no perfect solution to this common problem; however, proper foresight and planning will go a long way toward minimizing any complications or post closing disputes.
Fall 2009 - Today's "Tip of the Day":
Building Permits - Apparently, many people complete renovations or other improvements to properties AND DO NOT APPLY FOR PROPER BUILDING PERMITS from the municipality (I know, hard to believe, right?). Well, this becomes a problem when the property is being sold, because it is rare that a buyer will purchase a property with a municipal violation.
Sellers..if you are aware of an improvement made to your property, whether completed by you or a prior owner, contact your municipality to confirm that proper building permits and approvals were issued. If not, GO MAKE APPLICATION for the permits ASAP. And remember, it does not matter if you "bought it that way", and it does not matter that "the contractor was supposed to get them". If you "bought it that way", then you bought a problem; if the contractor did not pull permits, then you are stuck with a problem. It is best to correct the problem now, rather than lose a buyer in the future when the problem is uncovered.
Summer 2009 - Today's "Tip of the Day":
If you are currently selling your home or expect to list your home for sale in the near future, you should be aware of a significant tax issue that may affect your final proceeds of sale.
New Jersey Realty Transfer Tax. The State of New Jersey imposes a "transfer tax" on the sale of residential real estate. This tax is customarily paid by the seller at the time of closing. The amount of the tax is based upon the sale price of the home. For example, a property sold for $150K will incur a transfer tax of $600.00; however, a property sold for $500K will incur transfer tax of $4,175.00. There are some exemptions to this tax, and there is a significant reduction in the amount of the tax if the seller is a senior citizen.
If you have questions regarding the New Jersey Realty Transfer Tax or questions regarding any other aspect of purchasing or selling real estate, please feel free to contact Frederick A. Kiegel, Esquire by email or phone.
Note to Realtors...if you want a courtesy copy of a New Jersey Realty Transfer Tax table indicating the amount of tax due on each property purchase price, please contact my office and free copy will be provided to you asap.
Spring 2009 - Today's "Tip of the Day":
"Short Sale".."Short Sale"..everybody's talkin bout "Short Sales". In short (no pun intended), a "short sale" means that a property owner is requesting that a lender agree to forgive a portion of a loan balance to allow the owner to sell the property. If you are buying a home that is advertised as "subject to bank approval", you are likely buying a property that is subject to lender approval of a "short sale". If you are a buyer...beware. Your seller needs bank approval to sell. Proceed cautiously, and do not spend money on inspections, mortgage applications, or title searches until you have written confirmation that the "short sale" is approved.
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