[WSBARP] The Point; Option Agreements; Homeowner Benefit Agreements
Kary Krismer
Krismer at comcast.net
Tue Dec 6 06:44:36 PST 2022
I assume you're talking about Homeowner Benefit Agreements, and not "The
Point." I've personally not seen or heard of these. The only thing I
recall similar is some HOA covenants were being set up to require
significant transfer fees, and to the developer, not to the HOA. I
recall there was a statute which limited those. But that is the extent
of my recollection.
Kary L. Krismer
John L. Scott, Inc.
206 723-2148
On 12/5/2022 7:20 PM, Douglas Owens wrote:
> Dear listmates, I have a few questions. Is it the sense that these
> contracts are usually sold to the purchaser of the property by either
> the listing or the selling broker in connection with the purchaser’s
> transaction by which he or she comes into title? Has anyone seen the
> wording of one of these contracts? The company’s website says that a
> “memorandum" of the agreement is what is recorded. Much would depend
> on what the contract says, about such things as are usual in a listing
> agreement such as the term of the listing, the efforts the broker must
> make and the amount of the commission. At a minimum it seems that
> these contracts raise issues about restraint of trade, being explicit
> barriers against the property owner using any other brokerage to sell
> the property in the future, no matter what competitive offers such
> brokers might make. This might be a violation of Section 1 of the
> Sherman Act if the company is out of state, or a violation of RCW
> 19.86.050 if not. Another question involves the disclosure given to
> the property owner at the time of the signing of the agreement
> concerning the potential securities issues. By these contracts in
> effect the property owner is receiving money currently in exchange for
> a promise to pay the broker a much larger amount in the future if
> certain conditions exist. I am not a securities expert and perhaps
> others could indicate whether this issue is any thing a property owner
> should be warned about. Yours truly, Doug Owens
>
>> On Dec 5, 2022, at 12:26 PM, Dwight Bickel <dwight at dwightbickel.com>
>> wrote:
>>
>> There are several messages on the King County real property lawyers’
>> listserve about something that I have not seen, but I believe similar
>> to agreements that have been used around the country. Title companies
>> confirm these are being sold in Washington, binding the property
>> owner to use a certain firm for brokerage upon the next sale. On the
>> national real property lawyers’ listserve, this was posted regarding
>> actions that may need to be filed, and legislation may need to be
>> passed, to protect against such contracts:
>> *From:*DIRT - Real Estate Lawyers Listserv
>> <DIRT at LISTSERV.UMKC.EDU>*On Behalf Of*Whitman, Dale
>> *Sent:*Wednesday, November 30, 2022 11:11 AM
>> *To:*DIRT at LISTSERV.UMKC.EDU
>> *Subject:*[DIRT] Homeowner benefit agreements (so-called)
>> You may remember a previous conversation some months ago on DIRT
>> about so-called homeowner benefit agreements, under which a real
>> estate brokerage firm makes a cash payment to a homeowner. In return,
>> the owner signs a contract promising to use the firm for brokerage
>> services when the house is next listed for sale, any time in the next
>> 40 years. The contract is recorded and purports to run with the land,
>> binding future owners. It also has the effect of acting like a lien,
>> discouraging or making impossible the refinancing of the house or
>> placing a second mortgage or HELOC on it.
>> The brokerage firm will cancel the contract, but only on the payment
>> by the homeowner of a substantial fee, typically 3% of the property’s
>> current value. (One suspects that this is the firm’s main source of
>> revenue from these contracts.) All of this is spelled out in the
>> contract, of course, but is not well explained to the homeowner who
>> is entering into the contract and receiving a check.
>> The Florida Attorney General’s office has just filed a suit against
>> one of the main purveyors of these sorts of contracts. The AG seeks
>> damages, penalties, and an injunction, relying mainly on the Florida
>> consumer fraud statute. The word is that more state attorney
>> general’s offices are readying similar suits. These things are
>> predatory and deserve, IMHO, to be stamped out.
>> Dale
>>
>> To add or remove from this mailing list, please go to
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>>
>> Dwight A. Bickel
>> Real Property Title Advisor
>> Washington Title Professional
>> Dwight at DwightBickel.com <mailto:Dwight at DwightBickel.com>
>> https:/dwightbickel.com <http://dwightbickel.com/>
>> 206-484-1976
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