CSS was recently awarded its 4th consecutive Circle of Excellence Award from Fidelity National Title Group, one of the agency’s underwriters. The award is presented to those agents who demonstrate excellence and commitment to the title insurance industry. Accepting the award on behalf of CSS, from left to right: Beccy Clennan, Manager of Commercial Title and Escrow and Maura A. Snabes, VP, Sr. Underwriting & Compliance Counsel
As mentioned in our winter 2017 newsletter, exchanges of personal property assets, including heavy equipment, farm machinery, livestock, vehicles, aircraft, artwork and collectibles, franchises, and intangibles are now eliminated. However, real property exchanges continue to be very active in 2018. If you have anyone interested in deferring the payment of capital gains taxes on real estate he/she/it holds for investment or for productive use in a trade or business, contact us at 231-547-5220x102 or firstname.lastname@example.org.
Tax reform changes and housing industry.
Title agents and real estate professionals believe the recent change to the U.S. tax code will only have a minimal impact on the real estate industry, according to the latest Real Estate Sentiment Index (RESI) from First American. Most title agents and real estate professionals know that when it comes to buying and selling a home, consumers consider more than just the tax consequences of homeownership.
It is believed that expensive markets with higher-priced homes are more likely to be impacted by the new tax law because of the limit on the deductibility of state and local property taxes. In these markets, title agents and realtors were more likely to agree that the new tax code may have a negative impact on housing, including house price appreciation.
Almost half of those surveyed do not believe that the new tax code will significantly reduce existing homeowners’ willingness to sell and another 37% thought there would be no impact at all. Only 17% thought that the tax code would significantly reduce homeowners’ willingness to sell and only 23% believed that the tax code changes will reduce demand.
Home equity interest rate deduction—some good news.
By now you have heard that the new tax law eliminates the ability to deduct interest on home equity loans. However, the interest paid on home equity loans may be tax deductible in some cases. Although for the most part, the new tax law suspends the deduction for home equity interest from 2018 to 2026, it allows for such deduction if the loan is used to “buy, build or substantially improve” the home that secures the loan. Therefore, if you take out a loan to pay for things like a new roof, renovation or addition, you can still deduct the interest. The loan must be secured by your primary home or second home and cannot exceed the cost of the home in order to be eligible for the interest deduction. Taxpayers may deduct interest on $750,000 in home loans, which limit applies to the combined total of loans used to buy, build or improve the taxpayer’s primary home and second home.
Homebuyer demographic-from Baby Boomer to Millennial.
According to a recent National Association of Realtors (NAR) data, Millennials (people between the ages of 19 and 37) were the most active generation of homebuyers in 2017. And so as not to leave out Baby Boomers, who used to be the most active generation of homebuyers: by 2030, all Baby Boomers will be older than age 65. This will expand the size of the older population so that one in every five residents will be retirement age.
Legal News and Case Law:
I am on the MLTA Legislative Steering Committee and there are several House bills (HB) and Senate bills (SB) which will affect the real estate industry if passed:
Marketable Title Act: SB 671 adds language to the Marketable Title Statute relating to preserving claims against title. Essentially, one must reference restrictions by book/liber and page or instrument number on a conveyance or other recorded document in order to preserve them. If there is no mention of them in the chain of title specifically, for a period of 40 years, they are no longer an encumbrance on the property.
The Act states that marketable title is held by a person and is taken by his or her successors in interest free and clear of any and all interests or claims that occurred before the 20-year period for mineral interests, and the 40-year period for other interests if nothing is recorded referencing or preserving the interest or claim by liber/page/instrument number. The interest or claim can be preserved by filing for record a written Notice setting forth the nature of the claim, within the allotted time period.
The Notice would have to contain all of the following:
- The claimant's name, mailing address, and signature.
- The interest claimed to be preserved.
- The liber and page or other unique identification number of the instrument creating the interest to be preserved.
- The legal description of the real property affected by the claimed interest.
- An acknowledgement in the form required by the Uniform Recognition of Acknowledgements Act, and Section 27 of the Michigan Notary Public Act.
- The drafter's name and address.
- An address to which the document could be returned.
Electronic notarization: SB 664 introduced by Peter MacGregor updates the Michigan Notary Public Act language relating to electronic notarization of documents, which is the first step in the direction of remote notarization approval.
Certificates of Trust: HB 5398 allows the use of a Certificate of Trust under the Estates and Protected Individuals Code (EPIC) for a trust that affects real property. One of the facets of this is that a successor trustee can sign the COT rather than an attorney for the Trust/Trustee.
We will keep you updated on this pending legislation as it moves through the legislative process.