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December 2010
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RENTAL PROPERTY MANAGEMENT DIVISION
Complying With The Red Flags Rule

Identity theft has become a multi-million dollar business, causing many people both financial and emotional harm. There are endless stories of credit card theft, credit card rings, and financial fraud. This has brought about the “Red Flags Rule” created by the FTC.

Originally, Congress passed the Fair and Accurate Credit Transactions Act (FACTA) in 2003 to develop rules and guidelines for detection, prevention, and mitigation of identity theft for financial institutions and creditors. Then, the Fair Trade Commission (FTC) created the “Red Flags Rule” for businesses in 2007 and imposed active enforcement November 1, 2009. This rule requires that businesses have a written Identify Theft Prevention Program to detect the warning signs or “red flags” of identity theft in daily operations.

The Red Flags Rule applies to “financial institutions” and “creditors.” It may seem, at first glance, that property management companies are not subject to this rule because they are not a financial institution or a credit card company. However, when you read the definition of creditor in the ruling, it covers a very broad area and the information makes it clear that Property Management companies do fall under the Red Flags Rule.

The FTC defines “identifying information” as “any name or number that may be used, alone or in conjunction with any other information, to identify a specific person, including, but not limited to: name, social security number, date of birth, official state or government driver’s license or identification number, alien registration number, government passport number, employer or taxpayer identification number.

There have been many cases of property managers renting to residents with false information. Now many companies take credit cards and use ACH transactions for rental payments. In addition, companies require owners to supply social security numbers and/or tax ID so that they can file 1099 statements with the Internal Revenue Service.

We do not share personal information for property owners or residents with anyone without their written permission.  Many property owners have asked for information regarding the residents in their property.  Because of the red flags rule, we cannot provide investors with resident information without their expressed written permission.  This also applies to delinquent residents when seeking collection of past due account balances.  We store all personal information in a secure and safe manner.  All personal information is destroyed once the relationship has ceased and we have held the information for the statutory time period as laid out by the IRS and the North Carolina Real Estate Commission.

Currently, there are no criminal penalties for failing to comply with the Red Flags Rule; however, violators could be subject to civil monetary penalties. It is simply good business to comply and shows you are providing care for their information and/or properties.

We are in compliance with this rule and encourage you to read more about the rule.  The Federal Trade Commission provides business owners with a helpful publication, Fighting Fraud with the Red Flags Rule, a How-to Guide for Business. Go to http://www.ftc.gov/redflagsrule. There is of course, more to the rule than in this article and you can print out this document and review it.

If you have additional questions regarding community associations and how they affect investment properties please contact your Rental Property Manager.  For more information regarding our rental property management services please contact us 704-970-4148 or Rentals@HendersonProperties.com.

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COMMUNITY ASSOCIATION DIVISION
Protect Your Association’s Buildings This Winter

Some of us get excited that fall is here and love to gaze on the beautiful color transformation of trees while others are ramping up for the ski season. All in all this time of the year brings many items to think about; floods, snow, ice & wind storms. Something as simple as leaf drop can create a tremendous issue for the un-expected.

The once new self planted maple, that was only six feet high ten years ago, has now grown above the roof line and carries a great deal of maple leaves that will fit perfectly in your gutters or may cover any yard drains meaning the next rain event could lead to problems that relate to overflowing gutters.  Overflowing gutters could cause water intrusion at the eaves and soffit area of clubhouses and multifamily residences, creating interior damage. Plugged yard drains can lead to a flooded crawl space under your buildings. Water trapped in a gutter that freezes could also lead to your gutter separating from the fascia board of your buildings.

Falling leaves can cause a tremendous amount of damage if not attended to. It’s important to know when to do the proper maintenance to your association’s buildings.  The temperature plays a role in deciding when to perform certain maintenance tasks as certain items become non effective, such as applying paint or caulk if the temperature is too cold.

Having a professional community association management company allows you to rest assured that these items are taken care of and you know who to call in the event something might occur. Henderson Properties has an emergency phone list put together and knows which vendors provide that 24hr emergency service. Being prepared will make the winter month ahead much more enjoyable.

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REAL ESTATE SALES DIVISION COMMUNITY ASSOCIATION DIVISION
Residential Real Estate Transactions Are Changing

Effective January 1, 2011, the North Carolina Real Estate Commission will make major changes to the Offer to Purchase Contract.

Here are the basics:

1. Due Diligence:Instead of many dates and time frames for loan approval and inspections, the buyer will now have a period of due diligence in which to take care of all the necessary items.  In many cases the Buyer will offer a fee to the Seller along with the earnest money deposit for the right to perform due diligence. That due diligence money is non-refundable should the Buyer choose not to close and will be retained by the Seller.  If the Buyer is satisfied with the process they can choose to proceed and the due diligence fee then becomes part of their earnest money at closing.  If the Buyer walks away for any reason, the money will be forfeited to the Seller.  Just like the price, the due diligence fee and time period are negotiable. This has been a common practice in many states across the country and the NC Real Estate Commission is excited about bringing it to us.
2. Property Transfer:  In North Carolina it has been the law that property is not officially transferred until it is recorded with the county in which the property is located. The new contract defines “Settlement Date” as the date when the Buyer and Seller meet to sign the transfer document.  “Closing” is now the legal process of recording the transaction.  Currently it has been common practice for the Seller to give the keys to the Buyer at the time they meet for settlement.  With the current changes it will be more likely that the keys will be given to the attorney, but not given to the Buyer until the property is recorded.  The reason for this is if something happens to the home and the property is not recorded, who is responsible?  Technically the buyer’s insurance is not in effect until the deed is recorded so if the parties wait and receive keys at time of closing, not settlement or recordation, then the Seller’s insurance is in effect until the Buyer’s insurance takes over at closing.  This process has already started happening, but it will become more common with the changes.
3. Catch All Items:  The new contract does a much better job of defining, clarifying, and warning both buyers and sellers as to some of the terms and consequences of the contract.  What is a special assessment from the homeowners association?  Is a seller obligated to provide and extension?  It is now much cleaner.

Like any contract, the “what ifs” will ultimately determine the strength and effect of the contract.  It will also raise the importance to make sure you are working with a real estate agent who can help you navigate and protect yourself when you are buying and selling property.  At Henderson Properties we are ready for these changes and feel comfortable helping you make well informed decisions.

Please give us a call at 704.544.0253 or email us at Sales@HendersonProperties.com.

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PROPERTY MAINTENANCE DIVISION
Maintaining Your Investment During Winter Season

Make sure your home, or investment property is prepared for the winter season, and your budget.  Preventive maintenance is almost always less expensive and more convenient than any emergency repair, and a lot less stressful.

Here’s a short list that can go a long way in preventing some fairly disruptive, and costly repairs.

• Clean gutters and remove accumulated leaves and debris from roof valleys.  Water will always follow the path of least resistance.  Any obstruction in gutters or roof valleys may be sufficient to alter the path of water into your home.
• Damaged weather stripping can rob your home of warm air and run up your utility bills.  Properly sealed doors and windows help lower energy costs, keep your home more comfortable, and can assist in keeping water out.
• Caulking is a very important component in the maintenance of your home, check for voids and cracks, and have them filled.  This is an inexpensive way to keep the weather outside, where it belongs.
• Check the hoses that connect the washing machine to the water supply.  If any wear is evident, arrange to have them replaced.  If the hoses are more than five years old you may want to have them replaced.  Remember, the water to your washing machine is ALWAYS on.  Any break in the supply line can wreak havoc.
• Check the water heater for any signs of leaking and arrange for repairs if any water is evident.  Water heaters are just like washing machines in that the water is ALWAYS on.

If you haven’t already replaced HVAC filters and smoke detector/carbon monoxide batteries there’s no better time than now.

Henderson Properties is one of Charlotte, North Carolina’s most respected real estate firms. We are proud to offer residential maintenance services to the homeowners in our communities through the Henderson Properties Maintenance Division. Our commitment to our customers is to provide them with the best possible level of service, at a fair price. We have a passion for perfection.

We hope that you will let the Henderson Properties Maintenance Team be your proactive partner in handling your preventative maintenance and home repair. We offer complete and affordable maintenance and repair services through our own in-house staff and extensive contractor contacts. Our skilled technicians will provide friendly service, quality and value that can’t be beat, from a company that you know and trust.

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