Good morning, everyone. I hope everybody is having a great Wednesday, a great midweek. We have a couple of things I want to cover today that I think are important for all of us. And I'm starting to see what I'm talking about today come up more and more. So I just wanted to make sure we're all clarified and understand what these two next topics are about. The first topic I'm going to talk about is the exempt sellers disclosure. There seems to be question marks regarding who is qualified to claim exempt status versus those who are not qualified. And the document itself is somewhat self-explanatory, but just to kind of break it down and give you a bullet point understanding of it: - If the client, the owner of the property, has ever lived in the property, they do not qualify. The Department of Real Estate believes that they have working knowledge of the property if they have lived there. - If they have leased the property, same thing. Even though the owner may not have lived in the property, by virtue of the fact that they leased the property and somebody lived there renting from them, it is understood that the owner still had working knowledge of the property. If a tenant had an issue or a problem or a recurring problem, it is believed that the tenant would have made a complaint or at least notified the seller about what was going on. Therefore, a seller who has never lived in a property but has leased the property is not qualified to be claiming exempt status. A lot of times, you get into trust fund-type of sales where family relatives have not lived in the property; their parents did or a family member did, and...
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Seller exempt from disclosure Form: What You Should Know
Requires notice of any deficiency, penalty, penalty interest or refund due upon filing the transaction form with the Tax Collector. Provides a form for a change of address, and lists other exemptions related to tax-related transactions not exempted by law (such as real property transfers, real estate title and rental transactions, mortgage loans or real estate appraisals, sales of a business interest, and certain transactions to dispose of an asset, including, but not limited to, transfers of a business, profession or occupation). EXEMPT SELLERS AND THEIR AGENT'S DUTY TO SHARE TAX FLOW INFORMATION BEFORE THE TRANSFER OF RENTAL REAL ESTATE (C.A.R. Form ESD, Revised 6/21) Federal law and California law prohibit the transfer of rental property without the Transferor's receipt, disclosure and disclosure of specific information as required by both State and Federal law. The purpose of the transfer of rental property is to provide a means for the Transferor to collect rent from his/she tenants prior to sale of the rental property. A transfer of rental property for a price above 25,000 is exempt under California law and does not require disclosure of any tax-related information from the Seller prior to transfer. The Transferor must, however, provide any other information required by law. A transfer of rental property for a price above 25,000 is exempt under California law and does not require disclosure of any tax-related information from the Seller prior to transfer, nor any information regarding the amount of the tax due from the Seller prior to transfer of the rental property. A transfer of rental property of more than 25,000 does not require disclosure of tax-related information, but may require disclosure of other information necessary to complete the transfer, including any prior sale of the property and any other transaction of the Seller in which the Seller has received from the Transferor the proceeds of a sale of the rental property. A transfer of more than 25,000 is exempt under California law and does not require disclosure of any tax-related information; however, the Transferor must, for a transfer of 25,000 or less, provide the Transferor's Form 1098-E for each transfer of residential rental property.
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