October 14, 2015
Home buyers want assurances that someone will correct defects in construction to make it conform to what they bargained for. In the sale of new homes, these assurances usually come in the form of the builder’s warranties. Homeowners must make serious decisions about whether to go under contract, go through with closing and allow a year or so to go by without making a warranty claim. The purpose of this blog post is to identify some of the top misconceptions buyers have about home builder warranties that interfere with good decision-making.
- “My Warranty Coverage is Only Shown in the Packet of Contract Documents.” In fact, warranties can also arise out of legislation or court decision precedents. Warranty law is a solution to the problem that a buyer can inspect something, pay for it and later discover that the construction was materially defective. In Virginia, the courts traditionally ruled that in every contract with a builder there is an implied warranty of good workmanship unless the terms of the contract provided specific disclaimers or modifications. This rule helped consumers by requiring that the contractor would have to stand behind their work unless there was some fine print otherwise. Builders responded by having their attorneys write-up those warranty documents that can range from a paragraph to over 50 pages. The Virginia General Assembly observed that contractors were finding ways to get buyers through real estate closings on properties that did not conform to contracts in spite of the efforts of local building code enforcement officials and the buyer’s inspections. They passed legislation that creates implied warranties of quality workmanship that arise in the sale of each new home construction. Unfortunately, both contractors and homeowners are often unaware of these statutory warranties and their relationship with the written contract documents including the written limited warranties. Homeowners find it much easier to negotiate with their builder if they know the full extent of their warranty rights from review of the agreements and statutes.
- “My Neighbor Couldn’t Make Use out of Her Warranty, So I’m Also Out of Luck.” Tragically, many homeowners allow their warranty rights to expire without preserving their right to exercise them. Builders, neighbors, building code officials and inspectors can give useless or misleading legal advice. Because the contract documents vary builder-to-builder and the implied warranty laws vary by state, it is impossible to give a general summary that can be applied in every case. Understanding warranty coverage requires compiling the contract and warranty paperwork and state statutes. Usually, the basic warranty lasts for only one year.
- “My Builder is the Best Person to Ask about what they are Required to Fix.” Builders know that the courts will not expect them to continue making warranty repairs to one house for as long as they continue to be in business. To the extent a builder is still working on a house they have already sold, they aren’t making any new money. Contractors sometimes use written warranty paperwork to confuse or limit the buyer’s warranty rights at the time of sale. The builder’s warranty too often is used as a sales tactic to assuage nervous buyers concerned about construction defects. If the homeowner complains to the builder about construction defects after move-in, some contractors try to keep them occupied with inspections and ineffectual repairs. If the builder’s employees are frequently at the house, the owner probably won’t invite independent inspectors, experts or other contractors who might diagnose serious warranty claims and help the owner protect their rights. Once the owner starts to lose confidence in the builder or the warranty period is approaching, the owner needs the help of independent experts.
- “The Only Construction Defects Worth Focusing on are the Ones I Look at Everyday.” Homeowners frequently focus on the types of construction defects that they notice everyday. Defects in drywall, painting, grout, trim and other finish work can add up to thousands of dollars in repair costs, but they may not be the most substantial defects made by the builder. Water may be leaking into the house. Major systems such as roofing, plumbing, electrical, HVAC, etc. may require extensive repairs or replacement if not properly addressed during a warranty period. In order to properly diagnose these problems, the owner must coordinate investigation with inspectors, experts or other contractors who are independent from their builder. Every homeowner owes it to themselves to know the truth about the condition of their house.
- My Realtor, Mortgage Broker, Settlement Agent or Builder Recommended This Home Inspector, so they must be fine.” In hiring a third party inspector to help with a home purchase, the independence of the home inspector is just as important as their competence. Most professionals in a real estate transaction are only paid when the deal goes to closing. If a home inspector or other participant does find a defect that would cause a deal to not go through or be substantially delayed, the other professionals won’t want them to be involved in the next sale. Most home inspectors know enough about houses to provide a report that is a great help to the buyer. What’s important to the buyer is having an inspector who isn’t allied with the people being paid out of settlement. That way, the buyer knows he is working for her.
A homeowner should not rely solely on the contractor to clarify what their warranty rights are. It’s better to find out from qualified inspectors, engineers or other contractors what, if anything is wrong with your house. A qualified attorney can help determine whether those defects are legally covered before time runs out. If the closing on the new home was less than 12 months ago, there is a strong chance the owner may be entitled to repairs or financial compensation from the builder for failure to make the house conform to the warranty.
Mann v. Clowser, 190 Va. 887, 59 S.E.2d 78 (1950)
June 9, 2015
This past month, I experienced wonderful changes in my life which drew me temporarily away from my passion for blogging about property rights. On May 1st, I started my own solo law practice, Cowherd PLC. The new law firm continues my professional focus on the types of legal matters discussed in “Words of Conveyance.” On May 27th, my lovely wife and I welcomed our beautiful newborn daughter into the world. I would like to thank my friends and family for their love and support, including those who follow this blog. As a parent, I want the best home environment for my child to grow up in. As a trial attorney, I want to advocate for rights that are precious to clients.
When smart prospective buyers search the market for a home, they need to investigate the property. Typically, buyers use home inspectors to help them. Unfortunately, some defects cannot be easily discovered during the home inspection. For example, a structural defect may be concealed by drywall or other obstructions. With other houses, flooding problems may only be apparent after heavy rains.
Often, buyers will ask the seller’s agent whether there is a history of flooding or other problems. Agents know that if potential buyers learn negative information about the property they may move on to another listing. After a buyer completes a sale, the property may turn out to have defects that were concealed or contrary to representations made in the sales process. Who is legally responsible in those situations? Can a buyer sue a sellers real estate agent? Virginia courts considering this question draw varying conclusions.
“Great Party Room:”
The Circuit Court of the City of Norfolk recently considered whether a buyer can sue a sellers real estate agent under the Virginia Real Estate Broker’s Act. Megan Winesett is an active duty servicemember who bought her first home in 2010. The property listing described the basement as a “great party room.” During the walk-through, Ms. Winesett asked her own agent about basement flooding. The buyer’s agent told her that the seller’s agent explained that flooding was not a problem. A few years later, Winesett renovated the property and discovered rotting and termite damage in vertical support beams in the basement under her kitchen. She also found cracks in her foundation.
Buyer’s Relationship with the Seller’s Agent:
Winesett sued the seller, seller’s agent, her own agent and the real estate brokerages for $75,000 for repairs plus $350,000 in punitive damages. She sued the seller for fraud and the realtors for violation of the Real Estate Broker’s Act (“REBA”). The seller’s agents sought to dismiss the lawsuit on the grounds that the statute does not create a private cause of action against the agents. They argued that the REBA only allows for professional discipline by the Real Estate Board and not lawsuits by individuals. In a 1989 decision, Allen v. Lindstrom, the Supreme Court of Virginia observed that:
The [seller’s agents]’ primary and paramount duty, as broker and broker’s agent, was to the sellers, with whom they had an exclusive contract. While there may be some type of general duty to the public owed by every realtor, it is not the type of duty that converts into a liability against a seller’s agent for improper conduct to one in the adversary position of prospective purchaser, where there is no foreseeable reliance by the prospect on the agent’s actions.
In that case, the Court rejected the buyer’s attempt to sue the listing agent for violation of a duty arising out real estate agent regulations.
Ms. Winesett brought her case against the agents on the Virginia Real Estate Broker’s Act, which also governs the practices of real estate agents. That statute creates duties for agents (licensees) to their own clients and also the opposite parties in the transaction:
Licensees shall treat all prospective buyers honestly and shall not knowingly give them false information. A licensee engaged by a seller shall disclose to prospective buyers all material adverse facts pertaining to the physical condition of the property which are actually known by the licensee. Va. Code Sect. 54.1-2131(B).
The Act requires such disclosures to be in writing. The realtor doesn’t need to be an expert in every issue. An agent is entitled to pass on information provided by the seller, the government, or a licensed professional. However, the agent may not rely upon information provided by others if he has actual knowledge of falsity or act in reckless disregard for the truth. Va. Code Sect. 54.1-2142.1.
On May 21, 2015, Judge Mary Jane Hall denied the seller’s agent’s motion, finding that the REBA does create a private cause of action for buyers against seller’s agents for violations. Judge Hall focused her analysis on language in the statute providing that, “This includes any regulatory action brought under this chapter and any civil action filed.” This case is currently set for trial in August. While the Court allowed this claim to move forward, Ms. Winesett bears the burden of proving it at trial.
Judge Hall’s legal conclusion is not consistently reached by all courts in Virginia. Unlike other consumer protection statutes, the REBA does not contain specific provisions about how a civil action may be brought and what remedies are allowed.
In 2004, the Circuit Court of Loudoun County entertained the same issue and concluded that a buyer is not entitled to a private cause of action against a seller’s agent for violation of the REBA. In Monica v. Hottel, Judge Thomas Horne decided instead that a buyer may allege a negligence per se claim against the seller’s agent for violation of the duty of ordinary care set forth in REBA.
I have a few observations about what these recent decisions mean to current and prospective real estate owners in Virginia:
- Discipline vs. Liability: In these cases, the sellers argued that the General Assembly contemplated that the statute would only be enforced by professional discipline, not private lawsuits. To a professional, the prospect of having one’s license suspended or revoked is a different type of threat than a jury award of a large money judgment. To the buyer saddled with a house requiring more repairs than they can afford, money is much more of a consolation than the knowledge that an agent is no longer selling real estate.
- Virginia Consumer Protection Act: Unlike auto dealers, construction contractors and many other types of businesses, licensed real estate agents are excepted from liability under the Consumer Protection Act. To the extent seller’s agents have responsibilities to buyers, liability would have to arise out of some other legal theory, such as the REBA, negligence or fraud.
- Challenges and Advantages of Suing for Fraud: Trial attorneys know that it is much easier to prove negligence or breach of contract than claims based on misrepresentation. In fraud, the standard tends to be higher and there are many recognized defenses. For example, expressions of opinion may not normally serve as the basis for a fraud suit. It is unclear what the standard of proof is for a civil action under the REBA and whether the usual defenses permitted in fraud cases apply. Buyers aren’t normally privy to the private conversations of the seller and his agent. Proof of “actual knowledge” may be hard to come by in many cases. However, there are advantages for suing for fraud. The plaintiff may be entitled to attorney’s fees and punitive damages. Fraud is a flexible legal theory which may provide a remedy in situations that statutes don’t cover.
- REBA Standard for Agents: Normally, a buyer must follow the traditional principle of Caveat Emptor (“Buyer Beware”). The REBA imposes a higher standard of professionalism on seller’s agents by requiring them to affirmatively disclose material adverse facts under many situations. Broad legal enforcement of REBA may change the way that real estate is sold in Virginia.
Although they construe the REBA in different ways, these recent court decisions demonstrate a trend towards greater consumer protection against predatory conduct in the real estate industry. In my experience litigating cases under common law fraud, consumer protection statutes, breach of contract and warranty law, I have learned that there is usually a legal theory that provides a consumer with a remedy. However, claims have a defined time period in which they may be brought. If you fell victim to dishonest conduct in your real estate purchase, discovered that a defect was concealed during your property inspection or your requests for relief under a warranty are being stonewalled, contact a qualified real estate litigation attorney before the passage of time may prejudice your rights. As an owner, you make a tremendous commitment and personal sacrifice to acquire and keep real estate. You are entitled to the legal protections owed by others.
P. Fletcher, “Homeowner Can Sue Agents Under Brokers’ Act,” Va. Lawyers Weekly, (Jun. 5, 2015)
September 2, 2014
On July 31, 2014, I posted about a recent Fairfax Circuit Court opinion concerning Earnest Money Deposits (“EMD’s”). The seller, Sagatov Builders, LLC, sued buyer Christian Hunt. Mr. Hunt had entered into a contract and later failed to make the EMD or complete closing. The Court refused to allow the seller to sue the buyer for the unpaid deposit amount, finding it to constitute an unenforceable penalty.
Recently, an anonymous visitor typed a question into the search feature of this blog, rephrased as follows: “If there is a pending dispute over an EMD, can the seller accept another contract on the same property?” In other words, what are the risks of having two unreleased contracts simultaneously on the same property? In the Sagatov case, the seller used a marked-up, outdated realtor association form as a template for a transaction conducted apparently without brokers. Since the buyer never made the EMD, that wasn’t a classic earnest money dispute. The visitor’s question intriguingly takes a step back and asks how the EMD dispute implicates fundamental contract issues.
Today’s post explores this visitor’s question. This reminds me of a personal experience I had over a year ago. My wife (then fiancée) and I were under contract to purchase a home in Fairfax County, Virginia. We made the EMD. Our home inspector discovered a below-grade crawl space suffering from significant water intrusion problems. Our agent provided our home inspection report to the seller along with a request for release of the EMD. We resolved the dispute by using the home inspection contingency to get out of the contract. We were able to get our EMD back without having to send lawyer letters or go to court. Once we decided to ask for the release, we didn’t care what the sellers did with the house once we moved on, so long as we weren’t involved. However, some buyers may attempt to tie up the disposition of the real estate in order to gain leverage in getting their EMD back. Buyers and sellers can disagree over whether a contingency is still available.
While the circumstances and wording of each contract dispute are different, this visitor’s question brings a few thoughts to mind:
- Conflict Avoidance. Sellers and their agents get their money by selling the house to a willing buyer, not by engaging in EMD disputes. If the buyer doesn’t want to go to closing, then there you are. Yes, the parties (and their agents) time is lost in a failed deal. There is a time value to money. However, usually it is in their best interests to undo the deal and move on. EMD disputes that can’t be amicably resolved end up in Court, possibly going to trial. Some cases continue for months or even years.
- Role of EMD. After the contract and deposit are made, any dispute between the buyer, seller and/or their agents implicates the EMD as a potential remedy for a default. The timing and circumstances of the underlying default are usually determinative.
- Materiality of Buyer’s Default. A seller cannot take a deposit, repudiate a signed contract on a flimsy pretense, pocket the EMD and then move on to the next potential purchaser.
- Available Remedies. The judge will seek to interpret facts of the case according to the terms of the contract. An example of the language of a contract that may be used in Virginia is available here. The Court can do one of any number of things, including (a) forcing an unwilling party to go forward with the sale, (b) undoing the deal and returning the parties to the original positions or (c) awarding money damages as compensation.
- Waiver Issues. Usually, buyers don’t back out unless they discover some defect or simply can’t close due to circumstances, such as not having the money. If the buyer demands a release of a contract and refuses to go to closing, it will be hard for them to expect the seller to keep the property off the market. Likewise, if a seller accepts a new contract, then the seller cannot reasonably expect the buyer to purchase the house.
- Mitigation of Loss. Under some circumstances, the seller may be under a duty to find a replacement buyer. For example, the seller may claim the deposit on the premise that changing market conditions will result in a lower subsequent sale. Or, the seller may claim damages on the theory that it will suffer losses related to having to keep the property on the market. It is unreasonable for a seller to incur avoidable losses and then seek compensation for them from the backing out buyer.
- Failure to Timely Close. If the parties are close to closing, the seller may consider waiting until the closing date passes. The buyer’s failure to prepare for and go to closing prejudices expectations on their part that the property be kept off the market.
- Professional Regulation. The Real Estate Board regulates the conduct of real estate licensees. Agents may have professional duties under their own agreements with the parties and the particular circumstances of the dispute.
In the event that parties to a real estate sales contract cannot amicably resolve disputes over the disposition of the property or the EMD, they are well advised to contact a qualified attorney for counsel and representation.
I took the featured photograph in Shenandoah County, Virginia. It is just for fun and does not depict any of the properties discussed on this blog.
April 10, 2014
The departure of a tenant leaves the landlord with long to-do list, including listing the property for rent, evaluating applicants, repairing or remodeling the property and preparing a new lease agreement. Wrapping-up the relationship with the previous tenant can inadvertently fall to the bottom of the list of priorities. A lawsuit over the prior tenant’s security deposit can create a big distraction to the landlord after the old tenant leaves and the new one moves in. Proving damages can be a time intensive activity. Fortunately, many of these disputes are avoidable. This blog post explores seven strategies landlords may employ to avoid tenant security deposit disputes.
1. Use a Lease Appropriate to the Jurisdiction and the Property:
In urban areas of Virginia, landlords leasing out 4 or more properties must follow the Virginia Residential Landlord & Tenant Act (“VRLTA”). Similarly, District of Columbia landlords must follow the D.C. Housing Code. These sets of rules contain different provisions regarding what terms a landlord may put in a lease. They also show how the courts would interpret the lease. If the property is a condominium unit, the community will have rules and regulations governing leases in the development. Confusion is fertile grounds for conflict. Wise landlords use lease agreements adapted to their jurisdiction’s laws and the property unique situation.
2. Calculate Realtor Commissions and Routine Repairs into the Rent:
When the tenant moves out, the landlord may need a realtor to promptly market the property to a good replacement tenant. The realtor will require a commission on the rental. Even with fastidious tenants, features of the property will wear out with the passage of time. Most landlords want the property to “pay for itself” out of funds from tenants. During a transition, the previous tenant’s security deposit appears as low-hanging fruit. However, the landlord’s interests are best served by having the property pay for these expenses over the term of the lease out of ordinary rent. Landlords should account for more than mortgage payments, insurance, association fees and real estate taxes in the rent. The decision to rent the property requires a full cost analysis in addition to review of what the market will bear. The security deposit is for damage that exceeds ordinary wear over the period of the tenancy.
3. Conduct an Inspection of the Property Prior to the Tenant’s Move-In:
If the landlord and tenant end up litigating over the security deposit, the Court will hear evidence of the difference in the condition of the property between the move-in and the move-out. Whenever a property is in transition or dispute, a thorough, documented inspection is invaluable. I have previously blogged about property inspections in my “Navigating the Walk Through” post series. Before the tenant moves in, the landlord should conduct an inspection, take photos and provide a simple report to the tenant. The VRLTA requires the landlord to provide the tenant with a move-in inspection report. This can save the landlord tremendous time later on.
4. Provide the Tenant Notice and Inspect the Property Again at the End:
Both the VRLTA and the D.C. Housing Code require landlords to provide tenants notice of the final inspection. The close-out inspection should be conducted within three days of when the tenant returns possession. This requires the landlord and his agent to focus on the departing tenant, new renter, realtors and contractors simultaneously. Some inexperienced landlords put off focusing on the previous tenant’s security deposit until after any renovations are done and the new tenant is in. Savvy landlords recognize the significance of the condition of the premises at the time the previous tenant departs. After the property has been renovated and the new tenant has moved in, the condition of the property cannot be documented post-hoc.
5. Retain and Store Damaged Fixtures Replaced Between Tenants:
When contractors replace fixtures in a rental property, usually they throw the replaced ones away to clean the job site. If the landlord intends to deduct those damaged fixture from the security deposit for damaged fixtures, he should consider retaining them as real evidence. Some damages don’t photograph well. If the tenant later complains about the deduction, the landlord can then offer to let the tenant inspect the physical items. A tenant will think twice about filing suit knowing that the landlord will bring the disputed fixtures to court. Few landlords do this. Even if they tell the contractor, the manager may not remind the employees accustomed to cleaning up the site. This requires extra attention to detail, but may be convenient to some landlords. Some bulky or fragile items may not be suitable as trial exhibits.
6. Provide an Itemized List of Deductions Supported by the Inspection:
Under the VRLTA and the D.C. Housing Code, the landlord has 45 days to provide the tenant with the security deposit refund and the written list of deductions. If the tenant disputes the list, the landlord may desire to later add additional items not included on the list to aggressively respond to the lawsuit. However, the Court may deem any items not listed as waived. The deductions included on the list should be those supported by the final inspection documentation. Note that the landlord cannot deduct for ordinary wear and tear. The definition of “ordinary wear and tear” is flexible. I like to understand it as normal depreciation over the life of the item’s normal use. If any refund is made, the tenant may be entitled to interest.
7. Provide Strong Customer Service:
Whether a landlord is renting out a room to a summer intern or leasing a single family home for a year to a large family, he owes it to himself (and the tenants) to manage the property like a business, including a commitment to strong customer service. A happy tenant can save a landlord a realtor’s commission by referring a new tenant. Where the realtor may also get referrals by establishing rapport with the departing tenant.
Can you think of any other strategies for landlords to prevent or resolve legal disputes with departing tenants?
February 25, 2014
(This post is the second and final part in my blog series about the 2013 South Korean film “The Attorney.” Part I can be found HERE)
“The appearance of justice, I think, is more important than justice itself.”
Tom C. Clark explained in an interview why he resigned as a Justice of the U.S. Supreme Court. President Lyndon Johnson wanted to appoint Clark’s son, Ramsey, as U.S. Attorney General. The Constitution does not forbid a father from sitting on the Supreme Court while his son heads the Department of Justice. Tom Clark observed that although his son may not have anything to do with particular D.O.J. cases before the Supreme Court, the public would associate the outcome of the cases with the father-son relationship. The public develops its perceptions of the justice system more from news reports than personal experience. These perceptions help form the rule of law.
The 2013 Korean film “The Attorney” reminded me of Justice Clark’s interview. This film is loosely based on the 1981 Busan Book Club Trial. In that case, attorney Roh Moo-hyun, the future President of S. Korea, defended a young man against terrorism charges supported by a written confession procured by torture of the defendants. A few days ago, I blogged about the first half of this film which focused on the attorney’s success building a real estate title registration practice. Today’s post explores the court drama at the climax of the movie.
One evening, lawyer Song Woo-seok (pseudonym for Mr. Roh, played by actor Song Kang-ho) entertains his high school classmate alumni at a restaurant managed by his old friend Choi Soon-ae (Kim Young-ae) and her teenage son, Park Jin-woo (Im Siwan). Song gets into a drunken argument with a journalist who defends the motives of student groups protesting the 1979 military coup. Song is a high school graduate who studied for the bar exam at night after working all day on construction sites. He struggles to understand the students’ idealism. Choi and Park are disappointed and angry about the property damage from the fight at their restaurant.
In a later scene, Park Jin-woo attends a book club meeting, where female students flirt with him about romantic content in a novel. The authorities raid the meeting and secretly take the students, including Park, into custody. Mrs. Choi searches for him all over Busan, even visiting the morgue. After many days, the authorities informed her of Park’s pending trial for crimes against national security. Choi begs Song to defend Park. Song’s loyalty to Choi and his journalist classmate overcome his reluctance to accept a perilous, politically-charged criminal case.
1. Personally Investigate the Real Property Before Trial
When attorney Song and Mrs. Choi visit Park in jail, his fatigued body is covered with bruises. Song interviews Park and his co-defendants about their arrest and detention. They describe the sounds of the street they heard from inside the interrogation location. Song locates and explores the mysterious building.
When I started litigating real estate cases, attorney Jim Autry explained to me the importance of a discreet first-hand view of the property at issue, including value comparables supporting an appraisal. Song’s risky investigation of the decrepit building where the police conducted the interrogations reflect his real estate and construction background. This on-site investigation allows him to interpret the documents and witness statements and try the case with confidence.
2. Verdict Preferences Develop Before Conclusion of the Evidence
This trial drama defies a conventional legal analysis because the verdict appears politically predestined. Attorneys going to the theater to see taut repartee under the rules of evidence will be disappointed.
The case is tried without a jury. Beforehand, the judge privately requests that defense counsel refrain from making a lot of objections and motions in front of the news media. The judge makes several early evidentiary rulings against Song and the defendants. Everyone anticipates a show trial imposing the political will of the military junta.
Song bravely transforms the case into more than a show of power. In interrogation, the defendants signed confessions that they read British historian E.W. Carr’s “What is History?” in their book club. The prosecution presents an expert who testifies that this book is revolutionary propaganda. On cross-examination, Song shows that this is required reading in the leading universities in South Korea. Song also tricks the prosecution into admitting that the expert’s offices are in the same building as the government’s intelligence service. This challenges the independence of the expert’s opinions.
3. False Confessions
Song calls Defendant Park to testify. Park explains that he signed the confession after many days of torture by the police. When Song presents photographs supporting the witness’s testimony, the prosecution argues that the wounds were self-inflicted.
Even without torture, false confessions are a common problem in criminal justice. Virginia Lawyers Weekly recently reported that 1/4 of all convicted defendants later exonerated by DNA made false confessions. Feb. 17, 2014, “Untruth or Consequences: Why False Confessions Happen and What To Do.” “Good cop/ bad cop” routines intimidating young, vulnerable defendants often lead to “confession” of details introduced by law enforcement during interrogation. Id.
4. Effect of Visceral Reactions of Courtroom Observers on the Trial Proceedings
Park’s testimony about the torture techniques brings the courtroom audience of family members and local media to tears. The authorities replace the families on the next day with a mob seeking a guilty verdict. Song’s examination of the police detective is a failure. The officer evades Song’s questions and lectures him about the threat of terrorism.
Just as the defense seems to peter out, Song and Park get a big break. Song meets the army medic used by the interrogators to keep Park alive during the interrogation. The medic courageously resolves to testify for the defendants about the nature and extent of the injuries. Song’s journalist classmate agrees to contact international media organizations in a desperate attempt to put pressure on the authorities about the medic’s testimony. The outcome hinges on the admission and credibility of the medic’s testimony.
Hollywood court dramas indulge their audiences with conclusive vindication. “The Attorney” reminded me that a system of justice is always a work in progress. Song evolves from construction laborer to moneymaking genius to litigator. Finally he becomes a civil rights leader motivated and tempered by his training and experience.
Song voice seemed frequently shrill during the trial. Perhaps a Korean speaker can comment on whether this was persuasive or detracting.
When a case turns into an uphill battle, attorneys sometimes rationalize that, “This could be worse.” The defense counsels’ role in the 1981 Burim trial must have been one of these worst-case scenarios. Average trial lawyers succeed for their clients when they can marshal favorable law and facts through in a legal system that works well. “The Attorney” presents an extreme case showing how courage, intelligence, loyalty and tenacity can earn the respect of colleagues, and in rare cases, a nation.
Perhaps Justice Clark would have respected Roh’s commitment. The villains in “The Attorney” see the criminal justice system as a blunt weapon and propaganda medium for use against critics of the military coup. This ultimately undermines the credibility of the legal system and weakens the rule of law. Attorney Song’s courtroom theatrics aren’t to make money or to cloak his personal insecurities. He takes risks out of deep loyalty to his client. Truth, not bullying, enhances the “appearance of justice.”
December 27, 2013
In the past year or so, demand outpaced supply in the Northern Virginia real estate market. Many home builders and tradesmen went out of business in 2008-2009, creating a shortage of home builders. For home buyers, a custom home offers the prospect of owning a made-to-order dream home. For the builder, the custom home business brings rewards as well. These include the pricing of a premium product and working closely with buyers to help them fulfill their dreams. These dreams bear the legal complexity of contracting for the sale of something that does not yet exist. For the buyer, this is the biggest consumer purchase of their life. They rightly take pride of ownership in the project. This blog post identifies a few key issues from the perspective of the custom builder for the New Year:
- Liability Shield. You stand behind your work and want to keep your customers happy. This is how business grows. At the same time, you owe it to yourself and your family to protect your personal assets and credit. Customers expect that they will be doing business with a company. By incorporating or forming an LLC prior to making contracts, custom builders can exercise reasonable control of the exposure of their own credit and assets. Communications and agreements with customers should clarify the seller’s identity.
- Choosing the Customer. Prospective customers are likely talking to other builders or realtors. If a prospect reminds you too much of a previous problem customer, she may not be a good fit for your business. The wrong customer may distract you away from your more deserving customers and prospects. Consult with legal counsel if anti-discrimination or fair credit laws may apply.
- Written Agreements. Use an attorney-prepared written contract prepared for the particular type of project and state law. It may not be necessary to have a “new” form for each job. However, a realtor form for the sale of homes in Maryland won’t work well for a custom home in Virginia.
- Customer Service. Always have someone available to handle customer inquiries, at least during normal business hours. Buyers of custom homes tend to visit the site frequently and have questions. They feel a tremendous amount of financial and emotional investment in the project.
- Project Control. Don’t allow the consumer to directly supervise your subcontractors on the job site. An excited buyer may want to go outside his contract with you and hire his own tradesman to install items on property they don’t yet own. No car dealer would allow a shopper to take an auto to a body shop for a custom paint job during an extended test drive. The custom home builders do themselves and the customer a favor by anointing a manager or site supervisor to “face” with the client.
- Happy Endings. Take walk through inspections, punch lists and closings as an opportunity to communicate with the buyer and wrap things up effectively.
Home builders unfairly have a reputation for being unresponsive or inflexible with their customers. More often, custom builders struggle with being too accommodating with the demands of buyers. Most of all, custom home buyers expect the builder to provide them with personal leadership and advice. Attention to the legal aspects of your customer relationships is a critical element of entrepreneurial creativity and leadership.
December 23, 2013
Check Your Contract for Your Inspection Rights & Duties:
Many real estate contracts impose a right or duty to inspect and approve the development of a property before going to closing. Many contracts for custom homes or commercial developments contemplate that the parties will walk through the property prior to consummating the purchase. If you have a right under a contract, failure to exercise that right may potentially waive a future claim for a defect that reasonable exercise of the right of inspection would have discovered.
If the contract provision discusses preparation of a punch-list or inspection report based upon the inspection, both parties are well advised to take notes (on old-fashioned pads of paper or discretely using the camera in your phone or tablet) for later use in negotiating the inspection report.
If the transaction involves loans, the bank will require an independent appraisal. A shrewd investor takes heed of a professional appraisal, but does not allow it to substitute for her own review. Appraisals usually focus on a comparative analysis of the property with other properties with similar general characteristics, and do not look at the property from the perspective of having to live or work in it on a long term basis.
Home Inspection Industry in Virginia:
Many real estate purchasers use hired professional inspectors to help spot issues during walk-throughs. Most contracts for purchase of a home advise buyers of the opportunity to seek out the counsel of various types of professionals that may aid the inspection process.
Note that in Virginia, a home inspector does not have to be board-certified to do business as one. Currently, the Commonwealth of Virginia provides home inspectors with the opportunity to certify themselves. Home inspectors not certified by the state are forbidden from holding themselves out as certified if they are not, but they may continue to lawfully market their services as a home inspector.
In the purchase of a residential property, a Virginia certified home inspector or an inspector who is a licensed Virginia contractor, is likely to possess the basic qualifications. Various professional organizations, such as the American Society of Home Inspectors, provide members with credentialing opportunities as well. Bear in mind that these professionals can only advise you of what you see and prepare a report. What actions to take based on this information is subject to negotiation between the buyer and seller.
The home inspection process may result in a list of items that the seller agrees to fix by a certain date. When the seller informs the buyer that the repairs are complete, this shifts responsibility somewhat back to the buyer to confirm that the changes are acceptable. In the event of a dispute, the Court will likely ascribe weight to those contracts and lists signed off on by the parties.
Reality TV Home Buying vs. Preparing for a Real Future:
Today’s investors and professionals have greater access to information about real estate than ever before. Whether you are going to use the property for business, personal or public purposes, you don’t need years of specialized experience to know what to look for in a walk through – only you know what questions you need answered.
Your own goals will provide you with a starting point for preparing a walk-through checklist. The issues to focus on in the walk-through are different for each situation, but the important thing is to have a plan of what to look for based on the matters at issue. Furthermore, a walk-through will provide you with certainty and a firm basis for negotiating the outcomes desirable to your business. Your family will live with the visceral effect of entering the property every day. Make the most of your walk-through before you buy, sell or lease your investment.