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Georgetown Real Estate Law Blog

What to do when rent is not paid

If a tenant in a Delaware residential property fails to pay rent, a landlord may have many options to either demand that it be paid or terminate the rental agreement. At any time after rent is due, a landlord may issue a written demand for payment. If the past due amount is not paid within five days, a landlord may terminate the agreement. It may also be possible to provide more than five days to pay the past due amount if desired.

In the event that the tenant still has not paid the rent, it may be possible to ask for summary possession or to take other appropriate actions to remedy the issue. After a tenant has been notified in writing demanding payment of past due rent, a landlord may impose additional charges. These charges are considered to be additional rent that has accrued.

Millennials are struggling to afford down payments

Experts are reporting that the majority of millennials in Delaware and across the country don't have enough money to afford a new home down payment. The millennial generation, which remains one of the hardest hit by the financial recession, continues to struggle with employment, income and savings. Despite these drawbacks, the generation seems to remain optimistic about home ownership, with 80 percent of millennials reporting a desire to eventually own a home.

The data about millennials and home ownership comes from a survey done by Apartment List. According to that survey, about 70 percent of millennials have saved only $1,000 or less toward a house down payment. Even those in the older segment of the generation, ages 25-34, probably wouldn't be able to afford a down payment of as little as 10 percent within three years. As few as 15 percent would be able to save that much within a year.

Investing in commercial properties

Delaware residents who are thinking of investing in real estate may wonder about the choice between residential and commercial types. While buying residential properties has some benefits, it may be more beneficial to purchase commercial properties for several reasons.

Commercial properties usually have better tenants. Landlords of residential properties are obliged to handle all the home's problems, which can occur anytime during the day or night. However, commercial property owners can expect calls during the day when the business is open, and their relationship with their tenants will likely be more business-like and professional.

Reasons to have an inpsection before buying a home

Delaware residents who are looking to buy a home are encouraged to inspect it before the sale closes. This is because the home that a person sees during an open house or showing is one that is in pristine condition. In most cases, the seller will have an inspection done on the property as well as have an appraiser take a look at it.

The biggest benefit of having a home inspection is that a buyer can find a problem while it is still the seller's obligation to fix. If the issue is discovered after the sale closes, it is typically the buyer's responsibility to take care of. Common issues that an inspection may uncover include water damage caused by leaky faucets, faulty HVAC equipment or a roof that needs to be repaired or replaced entirely. Mold or pest infestations may also be uncovered during an inspection.

Home buyers seeking out energy-efficient homes

Home buyers in Delaware and around the country are becoming increasingly concerned about their carbon footprints and are seeking out houses that boast green technology or high levels of insulation according to an industry report. More than half of the real estate brokers polled by the National Association of Realtors in February said that home buyers had asked them questions about sustainability and energy efficiency, and 43 percent said that they included green data when listing their properties.

A report released by the National Association of Home Builders on March 13 suggests that developers are embracing sustainable practices and products and understand that a growing number of Americans want to see these values reflected in the homes they buy. Renewable energy solutions are particularly attractive to many buyers, and interest in this area has been further stimulated by the entrance of high-profile companies like Tesla.

Sellers' market arrives in residential real estate

A seller's market seems to have returned for the residential real estate sector with sellers in Delaware and elsewhere seeing multiple offers and fast turnover on listings. A 5.5 percent increase in sales were seen across the country for the month of February, and a jump of 11.4 percent in pending sales for the Midwest region. The national rate for signed contracts is 2.6 percent higher than February 2016. The chief economist with the National Association of Realtors shared his thoughts on the factors behind this increase and the possibility for continued optimism.

Low supply is one of the primary reasons for growth. The problem is such that low supply of residential real estate is forcing higher prices in light of the increased demand and pricing new buyers out of the market. The counter-balance to this is an improved economy and higher levels of employment. This is providing buyers with more income and the push factor of potentially higher interest rates later in the year.

A housing shortage is driving up prices

A shortage of houses in Delaware and across the country is being cited by industry experts as the reason for rising prices and a sharp fall in home resales in February. The National Association of Realtors revealed on March 22 that sales of existing homes fell by 3.7 percent in February to a seasonally adjusted rate of 5.48 million units. However, year-over-year sales were still up by 5.4 percent and the January seasonally adjusted sales numbers were the highest observed in a decade.

The increase in home prices was more profound. Houses sold for an average price of $228,400 in February, which represents an increase of 7.7 percent over the same period a year ago. Homeowners may be happy to hear that this means residential real estate values in the United States have now been growing steadily for five full years. While interest rates rose slightly in December, economists do not believe that higher mortgage rates have greatly affected the housing market. The average rate for a 30-year fixed-rate mortgage in the United States has now climbed to about 4.3 percent.

Construction of Delaware racetrack halted by Supreme Court

Delaware residents may have heard about a recent Supreme Court ruling that halted the development of a proposed motor speedway track in Felton. The Feb. 23 decision upheld a previous Superior Court ruling made in August 2016 that the land, presently the location of a small horse racing track, is not properly zoned for the construction of a dirt track motor speedway.

According to information contained in court documents, the case ended up in the courts after the owner of a neighboring winery challenged the decision of the Kent County Board of Adjustment to permit another local businessman to proceed with the project. The proposed construction project would have transformed the small horse racing track behind his automotive business near U.S. 13 and Peach Basket Road into a quarter-mile dirt race track for cars and trucks. The owner of the neighboring winery and vineyards claimed that the noise and environmental pollution would seriously jeopardize both his vineyard as well as the income he generates from the approximately 25-40 weddings that occur on his adjacent property each year.

Real estate buyers sometimes turn to hard money lenders

Homebuyers in Delaware and around the country generally seek financing from traditional lenders and choose between conforming, nonconforming, FHA and VA loans, but there are situations where unconventional sources of money may be useful. Those who take out a conventional mortgage usually expect to keep their loans for many years, but those seeking to renovate and flip a residential property quickly or require short-term financing of some sort may choose to approach a hard money lender rather than a mortgage broker.

These lenders base their decisions on the value of the property involved rather than the applicant's income, employment or credit history. They tend to operate on a nationwide basis and are rarely familiar with local market conditions. While property appraisals are an important part of the conventional mortgage application process, they are crucial when requesting money from hard money lenders.

Preventing easement disputes with contracts

Delaware property owners are sometimes asked to grant easements on their properties to others, including neighbors, utilities companies or municipalities. Easements are needed when other people need to use your property, and they may lead to disputes over property boundaries and what the holder of the easement will be allowed to do while it is on the property.

If you need an easement or you have been asked to grant one, it is important that you get any agreement formalized in a written contract. If you have a contract, it may help to avoid future problems. Your contract should clearly outline what the easement holder will be allowed to do on the property. It should also state how long the easement will last and if it is transferable or not. Finally, clearly stating the boundaries of the property is important so that the property over which the easement is granted is not inadvertently lost.