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Dear Liz: I understand that anybody with a 401(k) can contribute up to $18,000. Does the amount you can contribute depend on your salary? Say you make $45,000. Therefore I would assume you could put in the full $18,000, or 40% of your salary. Am I wrong?
Answer: The maximum the IRS allows someone under 50 to contribute to a 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan is $18,000 in 2015. The additional "catch up" contribution limit for people 50 and older is $6,000.
The plans themselves, though, may impose lower limits. Even if the plan doesn't cap contributions, your contributions may be limited if you're considered a "highly compensated employee." Last year, highly compensated employees were those who earned more than $115,000 or owned more than 5% of the business. If lower-earning employees don't contribute enough to the plan, higher earners may not be able to put in as much as they'd like.
Figuring taxes on home sale gains
Dear Liz: My wife owns a house that was separate property before our marriage. She has since fallen ill and needs round-the-clock care. I am selling the house to support this and will net about $250,000 at close. Will we have to pay capital gains taxes, or can I claim a one-time exemption, based upon this not being community property?
Answer: If your wife lived in the property as her principal residence for at least two of the five years prior to the sale, the profit would qualify for the capital gains exemption of up...
Read more: Personal Finance Q&A: Caps on 401(k) contributions can vary
Melanie Griffith and Antonio Banderas have listed their marital home in Hancock Park for sale at $16.1 million.
They created the 1.5-acre estate, which centers on a 1925 mansion designed by Hoover Dam architect Gordon B. Kaufmann, by combining two properties.
The Italian Revival-style home features a two-story banquet hall, a two-story kitchen, a paneled library, a recording studio, a gym, 13 bedrooms and 11 bathrooms. Hand-stenciled coffered ceilings top the formal dining room.
An elevator serves the 15,110 square feet of space on three stories. There are vaulted beam ceilings, wood-paneled ceilings, multiple balconies and four fireplaces.
Expansive lawns, a long stone driveway, rose gardens, a vegetable garden and a courtyard swimming pool complete the grounds.
Griffith, 57, starred in such films as "Crazy in Alabama" (1999), "Lolita" (1997) and "Working Girl" (1988). She has appeared on such television shows as "Hawaii Five-O" (2014) and "Twins" (2005-06). She'll be in the upcoming films "Out of Days" and "Facing the Wind."
Banderas, 54, will star in several films this year including "Altamira" and "33 dias."
The actors bought the main property for $4.2 million in 1999, public records shows, and in 2000 spent $1.3 million for the other lot.
The actress last year filed for a divorce from Banderas.
Brett Lawyer at Hilton & Hyland, an affiliate of Christie's International Real Estate, is the listing agent.
Suitable for crows and vampires
Paul Wesley of "The Vampire Diaries" has...
Read more: Melanie Griffith, Antonio Banderas ready to part with marital home
Question: How is a board meeting supposed to be structured? What does "prima facie" mean and is it affected if, on advice from management company personnel, our board scrubs all meeting minutes clean?
Answer: Prima facie translates as "at first sight," and it means a case or claim is supported by sufficient evidence and speaks for itself. Notices and minutes constitute the legal record of association business and are prima facie evidence of what transpired once they are certified to be true by the secretary, according to Corporations Code section 7215. It is a crime to falsify such records.
Agenda and meeting notice requirements for board meetings are located in Civil Code section 4920.
"Scrubbing" minutes or omitting facts creates both a false record and an incomplete one. In trial, admissibility of evidence is up to the judge. When testimony conflicts, differences often serve as a test of credibility. If the association's secretary certifies the minutes, the law leaves little room for evidence to the contrary.
Because titleholders have few opportunities to prove a conflict exists, this makes it easy for boards to fabricate minutes and deprive homeowners of rights that would otherwise be available to them but for the fact they live in deed-restricted developments.
If any motions are made, the motion should be quoted in the minutes as well as the motion maker's name and the person who seconded the motion. By name, each board director's vote "for" or "against" or "abstained" and even a "silent non-response" must be documented in the minutes. These are vital statistics that could make or break a board's defense, and affect indemnification protection, as generally, the failure of any board director to vote is considered a breach of fiduciary duty.
It is not enough to state that "the motion passed unanimously" or "the motion failed." Many insurers look to see director involvement and deliberation in the meetings. Who voted and how they voted might make the difference of being indemnified or having to pay for your own defense.
Generally, the structure of homeowner association board meetings, as recorded in the minutes, can consist of the following:
•The meeting is called to order, typically by the board president; the person who called the meeting to order needs to be named.
•Meeting date, time and type (e.g. regular, special, emergency) are noted.
•Roll call is conducted and attendance of all those who are physically present is documented.
•A quorum is established.
•An agenda is distributed to attendees containing a description of each item of business to be transacted or discussed at the meeting. If an executive session is scheduled, it must be noted.
•Preceding meeting minutes are read, then approved or rejected by motion, second and vote.
•The titleholders open forum is held. Under Civil Code section 5000(b), the board shall permit any member to speak at any meeting. A reasonable time limit for all owners at the meeting shall be established.
•Various board and committee reports are presented; the treasurer's report must be detailed.
•Unfinished or old business is discussed.
•New business is discussed.
•The next meeting date is documented for distribution in minutes.
•Date and time of the meeting's adjournment are documented.
•The meeting is adjourned. If the regular meeting is adjourned to an executive session, it must be noted in the agenda and the minutes.
There must be some modicum of formality to board and committee meetings. Pursuant to Civil Code section 5000(a), such meetings "shall be conducted in accordance with a recognized system of parliamentary procedure." Under Evidence Code section 11, "shall" means "mandatory."
If directors are ill-prepared, this reflects poorly on their abilities to conduct association business.
If directors fail to circulate an agenda to titleholders prior to meetings, this can cause dissension and distrust among owners and against the board. A minimal agenda that functions as nothing more than the same outline circulated from meeting to meeting raises suspicions about the board's activities and simultaneously disenfranchises homeowners.
Owners must attend meetings and take their own minutes, noting what motions and votes take place. This information can be effective when a board fails to act after a motion is approved or acts when a motion has been defeated. It is equally important if the board denies a motion was made when, in fact, it was.
When several owners contradict a board's version of minutes, a court may be persuaded to look unfavorably at those official minutes as well as actions of the board. If a board lies about the contents of minutes and breaks the law, those inconsistencies could be the turning point in a trial.
Read more: What happens if board meeting minutes are 'scrubbed clean'?
Want to buy your first home with little or nothing down and maybe get a refund on part of your realty agent's commission?
Here's one way: Consider joining a credit union that is aggressively expanding its mortgage business. Credit unions have been increasing their presence in housing — more than quadrupling their share of total mortgage market volume in the last nine years, according to the National Assn. of Federal Credit Unions — by offering deals you simply can't find at most banks.
Case in point: The country's largest credit union, Navy Federal, closed more than $1 billion in home purchase loans during the month of March alone.
But what's really extraordinary is that 59% of the loans went to first-time buyers, and two-thirds of those first-timers were from a demographic slice that has been missing in action for years — borrowers ages 18 to 34. The historical norm for first-time buyer participation in home purchasing is around 40% but currently is just 28% to 29%, according to the National Assn. of Realtors.
So how is Navy Federal pulling in hordes of young first-timers? By offering loans that address their needs — zero-down payments, no private mortgage insurance premiums, plus the standard low-down payment menus of the Federal Housing Administration (3.5% minimum) and the Department of Veterans Affairs (zero minimum) loans.
Navy Federal also is tapping into a massive membership base of 5 million members worldwide and adding young new members quickly: It's open to all branches of the armed services, active and retired, civilian employees, contractors and a wide range of relatives. Even "cohabiting partners" are eligible for membership.
Navy Federal's first-time buyer focus is hardly unique. Other credit unions are running programs with tempting terms.
North Carolina's State Employees' Credit Union offers qualified members up to 100% financing on mortgages as large as $400,000 with no private mortgage insurance premium payments. The interest rate as of mid-April: 4.25% on a 30-year term that has a rate adjustment after five years. For buyers who need help on closing costs, the program can lend them an additional $2,000, pushing the loan-to-value ratio beyond 100%.
NASA Federal Credit Union, which is open not only to NASA-related employees but to members of 900 "partner" companies and associations, offers zero-down mortgages up to $650,000 with no private mortgage insurance plus a $1,000 "lender credit" toward closing costs if the home purchase doesn't go to settlement by the contract date.
Still other credit unions help new home buyers with their expenses by refunding portions of real estate agents' commissions. The Boeing Employees' Credit Union, which is open to all residents and workers in the state of Washington — not just Boeing employees — gives purchasers the option of receiving a 20% cash refund of their real estate agent's commission plus a $250 credit toward mortgage closing costs.
But here's a key question: Are credit unions that offer come-ons like these increasing their risk of defaults and losses? Counterintuitive though it might seem, credit union home-purchase programs generally have minuscule delinquency and default rates.
Katie Miller, vice president for mortgages at Navy Federal, told me its serious delinquency rate as of March on its entire portfolio was 0.57%. Stacie Walker, senior vice president for loan origination at North Carolina's State Employees' Credit Union, said that its portfolio of zero-down payment, first-time buyer loans "actually performs better" than the entire mortgage portfolio, though she did not have specific figures on hand.
"We know our members," Miller said, adding that Navy Federal has been following "ability to repay" underwriting guidelines for years, well in advance of congressional mandates for all lenders to do so after the mortgage crisis of the last decade.
Credit unions' rapid growth — they now have about 100 million members — hasn't gone unnoticed by banks and mortgage companies who compete against them. Robert Davis, executive vice president for mortgage markets at the American Bankers Assn., says large credit unions get an unfair break — they essentially function like banks, but they have lower costs because as not-for-profit, member-owned institutions, they are exempt from federal taxation.
But let's be frank: If you're a first-time buyer, tax policy issues probably don't concern you. You just want the lowest-cost option for a mortgage. Not all credit unions offer attractive loan deals, but many do. To check out credit union membership possibilities in your area, go to http://www.culookup.com.
Distributed by Washington Post Writers Group.Copyright © 2015, Los Angeles Times