There are four main attributes for finding a good real estate agent: knowledge, comfort, trustworthiness, and reputation.
Knowledge:
I look for an agent with expertise in a limited geographical area and a limited type of property. In a large metropolitan area like Chicagoland, it is impossible to find an agent who can competently cover a whole city or all of the suburbs and just as difficult to find an agent with the expertise to handle all types (commercial, residential, leasing, etc.) of deals. Location, location, location. Don't use a suburban real estate agent for a south side property. Don't use a commercial broker to find a residential property. Find an agent who knows and works a particular area and with a particular type of property. The right tool for the job! Such an agent will have a basic knowledge of property values, common problems or pitfalls (ie. this property is near the freight train line that comes through in the early morning or is on the landing path for the local airport), and local customs and practices (ie. customary tax proration in the city versus a collar county). Most real estate deals are pretty smooth and just about any agent could handle them. However, when a deal does not go as planned, choosing the right agent becomes critical. The right agent will have a good level of experience so that the agent will know how to handle the "off" situation.
Comfort:
A real estate buyer or seller will spend plenty of time on the phone with an agent and possibly even more time in the agent's personal company. Some buyers spend weeks in the real estate agent's car driving from showing to showing. The client must be comfortable and get along with the agent. This is a matter of personal taste. An agent that some consider to be pushy or short to some may be forceful and to the point for others. An agent who is non-confrontational and collegial to some may be too withdrawn and without enough fight for others.
Trustworthiness:
Most people know that a real estate agents is only paid when a transaction closes. As a result, bad agents sometimes work "for the deal" rather than working "for the client". Avoid agents that do not put the client's best interests first. These agents are easily found out when they begin to play "devil's advocate" a little too much with regard to price, repair requests, or contract terms or when they "babysit" a deal too much to make sure it closes on time (because they need the commission check to eat). Trustworthiness is important when a client needs an agent who knows the law and does not cross over the line. A good agent will find novel and smart ways to solve problems; a bad agent will suggest an illegal or unethical course of dealing and merely suggest that "everyone does it". This behavior is commonly demonstrated by the "bad" agent who has no problem with "off the HUD-1" credits or who smooths over inspection issues by downplaying the importance of those issues to the client.
Reputation:
The best way to find a good real estate agent is to ask someone who has recently been through the real estate buying or selling process or, better yet, to ask someone in a related real estate profession. Attorneys and mortgage brokers know the good agents and the bad agents and can usually help a client find one or more who might be the "right" fit. There is no substitute for experience. It is better to get a referral to a good agent up front than to get stuck with a bad agent only to learn that the agent is bad at the closing table.
A real estate deal is one of the largest transactions that most people will engage in during their lifetimes. The choice of an agent should not be left to random chance, the cheapest quote, the luck of the draw, the first guy who called back, or whoever was "on the desk" when the client called in to the broker's office. A prospective client should always interview multiple agents. Choose the one with the best blend of qualities and the results should pay off.
Friday, November 12, 2010
Landlords Subject to New Tax Requirements for 2011
The brand new Small Business Jobs Act of 2010 enacted by President Obama in September, 2010 includes a new provision that affects landlords.
Beginning in 2011, all landlords must provide 1099-MISC forms to all service providers for payments in excess of $600 during the year. Previously, only landlords who rented property as a "trade or business" were required to make a filing. Now, the law extends to any and all landlords, even those who rent out a bedroom or make a short term rental. The law amends the definition of being engaged in the "trade or business" of renting property to include "a person receiving rental income from real estate".
As such, all landlords must issue a 1099-MISC to any service provider who the landlord pays more than $600 in any given year. This means that if you rent your property and pay an attorney to help with an eviction and pay an invoice for $1400, you must issue the attorney a 1099-MISC. Same goes for landlords who, say, pay a cleaning service $75 per month ($900) to clean their rental property.
The law does provide three exceptions. First, it excludes active members of uniformed services or intelligence employees who are renting their primary residence while on assignment. Next, the law excludes any individual who receives rental income of not more than the minimal amount as determined by the IRS regulations. No such regulations yet exist. Finally, it provides a hardship exception for landlords, as determined by the IRS regulations. Again, the IRS has not issued any regulations as to what sort of hardship might be sufficient to excuse performance.
Interestingly, the law also provides for increased penalties for failure to file informational returns.
The 1099-MISC forms must be filed in early 2012, however, landlords must begin the process of maintaining their records beginning as of January 1, 2010. The prudent landlord will collect the name, address, and federal employer identification number (FEIN) from people they pay for goods and services. This means landlords must also become facile with IRS form W-9.
Prudent landlords will be keeping their books current beginning with the new year. Better yet, prudent landlords will want to get a "landlord tune-up" for 2011 from the attorneys at Reda | Ciprian | Magnone, LLC.
Beginning in 2011, all landlords must provide 1099-MISC forms to all service providers for payments in excess of $600 during the year. Previously, only landlords who rented property as a "trade or business" were required to make a filing. Now, the law extends to any and all landlords, even those who rent out a bedroom or make a short term rental. The law amends the definition of being engaged in the "trade or business" of renting property to include "a person receiving rental income from real estate".
As such, all landlords must issue a 1099-MISC to any service provider who the landlord pays more than $600 in any given year. This means that if you rent your property and pay an attorney to help with an eviction and pay an invoice for $1400, you must issue the attorney a 1099-MISC. Same goes for landlords who, say, pay a cleaning service $75 per month ($900) to clean their rental property.
The law does provide three exceptions. First, it excludes active members of uniformed services or intelligence employees who are renting their primary residence while on assignment. Next, the law excludes any individual who receives rental income of not more than the minimal amount as determined by the IRS regulations. No such regulations yet exist. Finally, it provides a hardship exception for landlords, as determined by the IRS regulations. Again, the IRS has not issued any regulations as to what sort of hardship might be sufficient to excuse performance.
Interestingly, the law also provides for increased penalties for failure to file informational returns.
The 1099-MISC forms must be filed in early 2012, however, landlords must begin the process of maintaining their records beginning as of January 1, 2010. The prudent landlord will collect the name, address, and federal employer identification number (FEIN) from people they pay for goods and services. This means landlords must also become facile with IRS form W-9.
Prudent landlords will be keeping their books current beginning with the new year. Better yet, prudent landlords will want to get a "landlord tune-up" for 2011 from the attorneys at Reda | Ciprian | Magnone, LLC.
Thursday, November 11, 2010
All kinds of virtual assets
Here is part five in my series on digital assets. Today, I will touch on the general concept of why digital assets are important to an estate planner or probate attorney. Wikipedia defines "digital assets" as email, social media, and other online accounts, protected by a password and right to use a specific account. Widespread internet technology adoption has created a class of assets, virtual or digital assets, which estate representatives and their legal counsel need to address. These assets can have material value. Today's estate planners need to be able to recognize these assets and the special attention that they call for. Proper planning for virtual assets today can lead to smooth estate administration tomorrow.
There are more classes of virtual assets than one might think. The issues related to these assets are generally issues of content and access. For the most part, content is an easier issue as most content belongs to the creator and the creator's estate. Some terms of service might change that analysis. For example, Facebook was recently in the news for its claims that it had ownership over everything posted there. Access is the harder issue. Access is easy to deal with when a representative has the decedent's username and password. Be aware that even the use of a username and password by an Executor or Administrator may be a violation of certain terms of service. Things get more complex when a username and password are not available. These materials will seek to point out virtual assets that estate planners and probate practitioners need to consider and how to access them.
Beginning in the next installment, beginning with email, I will provide brief general information on how to deal with a particular account upon the death of an account holder.
Wednesday, November 10, 2010
A small side note on law and technology in Illinois
This is the fourth installment in my series on estate planning for virtual assets.
As I have already mentioned, the normally law creeps forward at a snails pace. Technology flies forward at a fast pace. In comparison to each other, technology is going light years faster than law. This disparity in development leads to some confusing, discordant, and unintended results.
One example of the result of these differences comes from an attempt made by the State of Illinois with respect to sexual predators. As of January 1, 2010, the Illinois legislature amended the Illinois Criminal Code to make it a crime for a person convicted of a sex offense to access or use social networking websites.
Here is the statute:
730 ILCS 5/5-6-3(8.9) Conditions of Probation and of Conditional Discharge.
(8.9) if convicted of a sex offense as defined in the Sex Offender Registration Act committed on or after the effective date of this amendatory Act of the 96th General Assembly, refrain from accessing or using a social networking website as defined in Section 16D-2 of the Criminal Code of 1961;
The Illinois legislature defined the term "social networking website" in the law:.
720 ILCS 5/16D-2(h) Sec. 16D-2. Definitions. As used in this Article, unless the context otherwise indicates:
(h) "Social networking website" means an Internet website containing profile web pages of the members of the website that include the names or nicknames of such members, photographs placed on the profile web pages by such members, or any other personal or personally identifying information about such members and links to other profile web pages on social networking websites of friends or associates of such members that can be accessed by other members or visitors to the website. A social networking website provides members of or visitors to such website the ability to leave messages or comments on the profile web page that are visible to all or some visitors to the profile web page and may also include a form of electronic mail for members of the social networking website.
Although you cannot discount the good intentions of the Illinois legislature and the noble goal of keeping sexual offenders off of places like facebook and myspace, the new law, unfortunately, demonstrates the inability of the law to keep up with and define the current state of "Web 2.0". The statutory definition of a "social networking" website is so overly broad that nearly any modern commercial webiste, blog, site with a message board, shopping site, or Linkedin will satisfy the definition.
There's a lot of shakeout left before the law can properly deal with web-related technology issues. Until then, we'll just need to do our best.
Click here for part three
Click here for part five
As I have already mentioned, the normally law creeps forward at a snails pace. Technology flies forward at a fast pace. In comparison to each other, technology is going light years faster than law. This disparity in development leads to some confusing, discordant, and unintended results.
One example of the result of these differences comes from an attempt made by the State of Illinois with respect to sexual predators. As of January 1, 2010, the Illinois legislature amended the Illinois Criminal Code to make it a crime for a person convicted of a sex offense to access or use social networking websites.
Here is the statute:
730 ILCS 5/5-6-3(8.9) Conditions of Probation and of Conditional Discharge.
(8.9) if convicted of a sex offense as defined in the Sex Offender Registration Act committed on or after the effective date of this amendatory Act of the 96th General Assembly, refrain from accessing or using a social networking website as defined in Section 16D-2 of the Criminal Code of 1961;
The Illinois legislature defined the term "social networking website" in the law:.
720 ILCS 5/16D-2(h) Sec. 16D-2. Definitions. As used in this Article, unless the context otherwise indicates:
(h) "Social networking website" means an Internet website containing profile web pages of the members of the website that include the names or nicknames of such members, photographs placed on the profile web pages by such members, or any other personal or personally identifying information about such members and links to other profile web pages on social networking websites of friends or associates of such members that can be accessed by other members or visitors to the website. A social networking website provides members of or visitors to such website the ability to leave messages or comments on the profile web page that are visible to all or some visitors to the profile web page and may also include a form of electronic mail for members of the social networking website.
Although you cannot discount the good intentions of the Illinois legislature and the noble goal of keeping sexual offenders off of places like facebook and myspace, the new law, unfortunately, demonstrates the inability of the law to keep up with and define the current state of "Web 2.0". The statutory definition of a "social networking" website is so overly broad that nearly any modern commercial webiste, blog, site with a message board, shopping site, or Linkedin will satisfy the definition.
There's a lot of shakeout left before the law can properly deal with web-related technology issues. Until then, we'll just need to do our best.
Click here for part three
Click here for part five
Tuesday, November 9, 2010
The Ellsworth Case with Yahoo!
I will continue with part three in my series on digital assets with a discussion of the Estate of Justin M. Ellsworth and his family's troubles with his Yahoo! email account.
The case easily illustrates the complexity of dealing with e-mail accounts. The 2005 Michigan probate was the estate of a marine Justin Ellsworth, who was killed in Iraq. Mr. Ellsworth's parents sought to recover the contents of their son's Yahoo! e-mail account. Yahoo refused Justin's parents' request based upon its Terms of Service (TOS) which indicate that a Yahoo! account is non-transferable and terminates at death.
Yahoo's terms of service:
No Right of Survivorship and Non-Transferability. You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted.
Yahoo argued that they needed to enforce the privacy rights of their account holders. Elsewhere in the terms of service, Yahoo indicated certain instances upon which it could release private information.
Yahoo's terms of service
You acknowledge, consent and agree that Yahoo! may access, preserve and disclose your account information and Content if required to do so by law or in a good faith belief that such access preservation or disclosure is reasonably necessary to: (i) comply with legal process; (ii) enforce the TOS; (iii) respond to claims that any Content violates the rights of third parties; (iv) respond to your requests for customer service; or (v) protect the rights, property or personal safety of Yahoo!, its users and the public.
Justin's parents were able to obtain an order from the Oakland County Michigan probate court ordering Yahoo to turn over the emails in the account. Yahoo complied with the court order, although the account password itself was never provided to the estate. Instead, Yahoo produced a CD containing the emails and indicated that it would also produce paper copies to the family.
The case brings a number of important questions to light. What exactly is the actual property owned by the estate? Is it the underlying source code? Is it the writings of the account holder? What about writings other people wrote to the account holder? What about the privacy rights and copyright rights of email senders and recipients?
With respect to copyright issues, the estate certainly had copyright in the emails composed by Justin Ellsworth and possibly implied consent for use of those emails received by Justin Ellsworth. It is important to note that Yahoo never made a claim of ownership over the emails in Justin Ellsworth's account. In fact, their TOS explicitly rejects this.
Yahoo's TOS:
Yahoo! does not claim ownership of Content you submit or make available for inclusion on the Yahoo! Services
Even if an estate has a copyright in the material contained in an email, the estate may not necessarily have the right to access the information. It can be argued, and Yahoo did argue, that the contractual rights in Yahoo's TOS trump the estate's copyright. In other words, they limit the family's access to the copy of the copyrighted materials. Their argument can be simplified by saying that they are merely a holder of the email content and the right of access to the content disappears upon the death of the account holder. The Yahoo account was governed by contract law and, by accepting the terms of service, Justin agreed that his account was not transferable.
The case raises many questions and provides few answers. Nonetheless, it is clear that the law will not have ready made answers to the questions raised by technology related or virtual assets.
Click here for part two of this series
Click here for part four of this series
The case easily illustrates the complexity of dealing with e-mail accounts. The 2005 Michigan probate was the estate of a marine Justin Ellsworth, who was killed in Iraq. Mr. Ellsworth's parents sought to recover the contents of their son's Yahoo! e-mail account. Yahoo refused Justin's parents' request based upon its Terms of Service (TOS) which indicate that a Yahoo! account is non-transferable and terminates at death.
Yahoo's terms of service:
No Right of Survivorship and Non-Transferability. You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted.
Yahoo argued that they needed to enforce the privacy rights of their account holders. Elsewhere in the terms of service, Yahoo indicated certain instances upon which it could release private information.
Yahoo's terms of service
You acknowledge, consent and agree that Yahoo! may access, preserve and disclose your account information and Content if required to do so by law or in a good faith belief that such access preservation or disclosure is reasonably necessary to: (i) comply with legal process; (ii) enforce the TOS; (iii) respond to claims that any Content violates the rights of third parties; (iv) respond to your requests for customer service; or (v) protect the rights, property or personal safety of Yahoo!, its users and the public.
Justin's parents were able to obtain an order from the Oakland County Michigan probate court ordering Yahoo to turn over the emails in the account. Yahoo complied with the court order, although the account password itself was never provided to the estate. Instead, Yahoo produced a CD containing the emails and indicated that it would also produce paper copies to the family.
The case brings a number of important questions to light. What exactly is the actual property owned by the estate? Is it the underlying source code? Is it the writings of the account holder? What about writings other people wrote to the account holder? What about the privacy rights and copyright rights of email senders and recipients?
With respect to copyright issues, the estate certainly had copyright in the emails composed by Justin Ellsworth and possibly implied consent for use of those emails received by Justin Ellsworth. It is important to note that Yahoo never made a claim of ownership over the emails in Justin Ellsworth's account. In fact, their TOS explicitly rejects this.
Yahoo's TOS:
Yahoo! does not claim ownership of Content you submit or make available for inclusion on the Yahoo! Services
Even if an estate has a copyright in the material contained in an email, the estate may not necessarily have the right to access the information. It can be argued, and Yahoo did argue, that the contractual rights in Yahoo's TOS trump the estate's copyright. In other words, they limit the family's access to the copy of the copyrighted materials. Their argument can be simplified by saying that they are merely a holder of the email content and the right of access to the content disappears upon the death of the account holder. The Yahoo account was governed by contract law and, by accepting the terms of service, Justin agreed that his account was not transferable.
The case raises many questions and provides few answers. Nonetheless, it is clear that the law will not have ready made answers to the questions raised by technology related or virtual assets.
Click here for part two of this series
Click here for part four of this series
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