CARBON MONOXIDE POISONING Fast Facts
Carbon monoxide is an invisible, odorless, colorless gas created when fuels (such as
gasoline, wood, coal, natural gas, propane, oil, and methane) burn incompletely. **
Each year, carbon monoxide poisoning claims approximately 480 lives and sends
another 15,200 people to hospital emergency rooms for treatment.***
Each year over 200 people die from carbon monoxide produced by fuel-burning
appliances in the home including furnaces, ranges, water heaters, and room heaters.****
A person can be poisoned by a small amount of CO over a longer period of time or by a
large amount of CO over a shorter amount of time.**
Carbon Monoxide can have different effects on people based on its concentration in the air that people breathe, and the person’s health condition.****
CO poisoning can be confused with flu symptoms, food poisoning and other illnesses
with symptoms including shortness of breath, nausea, dizziness, light headedness or
headaches. High levels of CO can be fatal, causing death within minutes.**
Consumers die when they improperly use gas generators, charcoal grills, and fuel-burning camping heaters and stoves inside their homes or in other enclosed or partially enclosed spaces during power outages. ***
Install a carbon monoxide (CO) alarm (also called detectors) in the hallway of your home near sleeping areas. Avoid corners where air does not circulate.
Follow the manufacturer’s instructions to test the CO alarm every month.
Do not use a CO alarm in place of a smoke alarm. Have both.
Before buying a CO alarm, check to make sure it is listed with Underwriter’s Laboratories standard 2034, or there is information in the owner’s manual that says the alarm meets the requirements of the IAS 6-96 standard.
Make sure all household appliances are installed according to manufacturer’s instructions and local building codes. Most appliances should be installed by professionals.
Have heating systems (including chimneys and vents) inspected and serviced annually, checking for blockages, corrosion, partial and complete disconnections?
Only burn charcoal outdoors, never inside a home, garage, vehicle or tent.
Always make sure to turn off any gas-powered engine, even if the garage door is open.
Do not use gas appliances such as ranges, ovens or clothes dryers for heating your home.
Know the symptoms of carbon monoxide poisoning: headache, dizziness, weakness, nausea, vomiting, sleepiness, and confusion. If you suspect CO poisoning, get to fresh air immediately, and then call 9-1-1.
Treat the alarm signal as a real emergency each time. If the alarm sounds and you are not experiencing any symptoms described above, press the reset button. If the alarm continues to sound, call the fire department.
Speed up your home sale by preparing your home ahead of time using the following tips.
Your home inspection will go smoother, with fewer concerns to delay closing.
Confirm that that the water, electrical and gas services are turned on (including pilot lights).
Make sure your pets won’t hinder your home inspection. Ideally, they should be removed from the premises or secured outside.
Tell your agent about any pets at home.Replace burned-out light bulbs to avoid a “light is inoperable” report that may suggest an electrical problem.
Test smoke and carbon monoxide detectors, and replace dead batteries.
Clean or replace dirty HVAC air filters. They should fit securely.Remove stored items, debris, and wood from the foundation.
Remove items blocking access to HVAC equipment, electrical service panels, the water heater, attic, and crawlspace.
Unlock any locked areas that your home inspector must access, such as the attic door or hatch, the electrical service panel, the door to the basement, and any exterior gates.
Trim tree limbs so that they’re at least 10 feet away from the roof. Trim any shrubs that are too close to the house and can hide pests or hold moisture against the exterior.
Repair or replace any broken or missing items, such as doorknobs, locks or latches, windowpanes or screens, gutters or downspouts, or chimney caps.Checking these areas before your home inspection is an investment in selling your property. Your real estate inspector and agent will thank you!
Call us to find out how we can help you whether you are buying, selling or just want to know what is going on with your home. 512-296-2376
It’s been a while since I posted about buying a new home and I think it is good to remind readers, both realtors and buyers about the reasons you want a new home inspection.
What? You say. It’s a new house nothing can be broken yet or worn out yet. All systems go, right!?
Well, yes and no.
Yes, you have a high possibility that nothing will be broken and / or wore out yet. But, no, there are still big things to be concerned with …even with new homes.
First, let’s step back and understand that a new home is built by a builder who did not have to be licensed to build a house. The tradespeople involved with building the house should have a license but even that is not a given. Especially in large scale developments. More apprentices and junior workers are going to do more of the work. This means there will be more chances that a mistake has been made or something was not constructed correctly.
But the builder has a QA team that will catch stuff, right?
Well, maybe some of the stuff. Like trim missing or weatherstripping not in place yet.
I have inspected new homes from Sun City to San Marcos and I can assure you the biggest and most established builders QA team still miss stuff. So what do you think the smaller custom builders might miss.
Glad you ask. The biggest builders in our area and smallest build quick and have a minimum number of touches on the build. Some areas like installing gas lines, like CSST pipe (Go to CSST to learn more), have the plumbing element (piping) and the electrical part (bonding). It’s easy for the installation team to not have someone check the electrical part. I have seen CSST unbonded in the most respected builders.
Or how about insulation properly installed. I have seen entire panels missing…in a closed roof. oops.
And the last example, poor workmanship. that was not noticed. I was called in at the 11-month warranty and found the mortar between bricks was too thin and already had holes along entire walls with bricks loose.
People make mistakes. New homes are wonderful and it is so exciting. Don’t make it frustrating. Have an inspector take a look to ensure it is built as well as it looks.
Americans spend most of their time inside buildings. We take for granted the shelter, protection, warmth, coolness, air and light that buildings provide, and rarely give a thought to the systems that deliver these services unless there’s a power interruption or other problem. In addition, few Americans understand the environmental consequences of maintaining indoor comfort levels. Today’s buildings typically use mechanical equipment powered by electricity and fossil fuels for lighting, heating, cooling and maintaining air quality. Last year, buildings in the U.S. consumed more 📷than one-third of the nation’s energy and contributed 36% of the carbon dioxide (CO2) emissions released into the atmosphere. Fossil fuels burned to generate electricity and condition buildings emit other pollutants that cost citizens and insurance companies millions of dollars in healthcare costs each year. Mining and extraction of fossil fuels also have environmental impacts, and instability in pricing causes concern among both business people and homeowners. Creating buildings that use less energy not only reduces and stabilizes costs, but also reduces environmental impact. The good news is that we have the knowledge and technologies to reduce energy use in our homes and workplaces without compromising comfort and aesthetics. The bad news is that we are not taking full advantage of these advances—buildings are typically designed and operated without considering all their environmental impacts.
Whole-Building DesignFor decades, researchers and innovative designers and builders have created buildings that treat the environment as a resource, rather than as an obstacle to be overcome. Over the years, building professionals have steadily refined the equipment and design strategies used in these environmentally responsive buildings. This evolutionary process and the resulting body of knowledge have led to the concept of “whole-building” design. In the whole-building approach, designers create a computer model of a structure during the early stages of the design process. Using this model, together with improved communication among the various players in the design/build process, designers can integrate disparate building elements into the most energy-efficient, cost-effective and comfortable building possible. The goal is to minimize the building’s impact on the environment, and, quite often, the results are remarkable, resulting in dramatic savings in energy use without a substantial increase in design or construction costs. As a bonus, these buildings can improve the health, comfort and productivity of their occupants in measurable ways. In commercial buildings, dollar savings from increases in productivity
and reduced absenteeism can dwarf savings from reduced energy use.In 1998, the U.S. Department of Energy (DOE) began working with the commercial buildings industry to develop a 20-year plan for research and development of energy-efficient commercial buildings. More than 250 people from 150 building organizations worked together to create a technology roadmap report which recommends strategies for making commercial buildings more energy-efficient. The overall goal of the DOE’s High-Performance Buildings Program is better buildings that save energy and provide a quality, comfortable environment for workers. The program targets the building community, especially building owners, engineers and architects. Building professionals are encouraged to submit plans for new commercial buildings to be a part of the High-Performance Building program. To participate, you must start very early in the design phase—before any other work is done—and must anticipate a 70% or more energy cost-reduction.
The DOE High-Performance Buildings Program
Although there’s no concrete definition of a high-performance building, InterNACHI defines it as a building with energy, economic and environmental performance that is substantially better than standard practice. It’s energy-efficient, so it saves money and natural resources. It’s a healthy place to live and work for its occupants, and has relatively low impact on the environment. All this is achieved through a process called whole-building design.
Whole-building commercial design considers all building components during the design phase. It integrates all the sub-systems and parts of the building to work together. Because all the pieces must fit together, it is essential that the design team be fully integrated from the beginning of the process. The building design team can include architects, engineers, building occupants and owners, and specialists in areas such as indoor air quality, materials, and energy use.
Whole-building design takes into consideration the building structure and systems as a whole, and examines how these systems work best together to save energy and reduce environmental impact. For example, a building that uses extensive daylighting techniques will reduce the amount of heat given off by lighting fixtures, thus allowing for a smaller air-conditioning system. This whole-building philosophy considers site, energy, materials, indoor air quality, acoustics, natural resources, and their interrelation. This approach brings together building design, energy efficiency, and today’s solar technologies to boost your energy savings and make the most of all your building’s elements. It reduces the amount of energy required to operate a building compared to conventional buildings. It improves the comfort of building occupants by using aesthetically pleasing architectural designs to brighten up work areas using sunlight rather than electricity, without causing excess glare.
What are the benefits of whole-building design? Commercial buildings consume 17% of the total energy consumed in the United States. By creating buildings that use less energy and have lower power demands, greater robustness of the buildings (as well as the power grid) is achieved. This reduces the need for fossil fuels and consequential environmental impact. 📷
Benefits of whole-building design include:
reduced energy use by 50% or more;reduced maintenance and capital costs;reduced environmental impact;increased occupant comfort and health; andincreased employee productivity.
Employee productivity and business profitability are linked. Recent studies have shown an increase in employee productivity when buildings are designed with occupants in mind—natural light, comfortable temperatures, and a quiet work environment being their most important issues. Research suggests that a well-designed workplace can increase employee productivity by 20%. Furthermore, studies also show that a pleasant indoor building environment helps attract desirable tenants for building owners, increasing the number of potential renters for a building.
How much does it cost?
There is a growing interest today on the part of commercial building owners, facilities managers, architects, engineers, and builders to design and construct the best possible building for the allotted budget. Depending on the aggressiveness of the design, experience has shown that it costs no more than 10% more to build high-performance buildings. Some high-performance buildings cost less to construct. Sometimes, additional costs can be procured using cost-benefit ratios and life-cycle costing. The added cost (if any) of system investment each year is compared to the cost of fuel saved each year. Total energy costs are, on average, about 50% less than those for conventionally designed buildings. In many cases, the right-sizing of mechanical systems through passive solar design offsets the costs for additional windows and controls.
Design Approach: Frequently Asked Questions
1. Will the building look unusual?
Many owners want to make a statement with whole-building design and sustainable features. Many other owners, however, are creating these buildings at little or no additional cost that appear no different from conventional designs.
2. Is “whole-building” the same as energy-efficiency?
Energy-efficiency does figure prominently in our designs, but there are many other aspects to design. The whole-building concept looks to integrating all disciplines to meet a set of goals for a building.
3. Are these buildings just for large corporations?
Many of the early adopters were municipalities and government agencies that recognized the opportunities for life-cycle cost savings. Anyone can benefit from whole-building design.
4. Is there a market demand for whole-building design?
Yes. Corporations, universities, and government agencies are demonstrating that whole-building design can provide better working environments and cost less to operate. Students, employees, and non-profit community groups are all demanding and campaigning for the adoption of low-energy buildings.
5. If I decide to “go green,” won’t I have to come up with more money?
Not necessarily. Some prescriptive requirements, such as use of photovoltaics, may initially drive project costs somewhat higher, but several owners have published data demonstrating their success in procuring green buildings for less than the cost of a conventional building. Look around for incentives. These include incentives from local utility companies tied to energy-efficiency, grants for renewable energy installations, and various tax rebate programs.
6. Isn’t whole-building design based on fringe technologies?
Most projects have achieved good performance using conventional building systems. In many instances, it is the effective integration of conventional systems, rather than the use of a new technology, that conserves resources and improves environmental quality. New technologies are used only after careful consultation with owners and the design team. 7.
If it hasn’t been done before, isn’t it hard to do?
Whole-building projects are demonstrating that it’s not hard. For example, the fact that very few commercial buildings employ natural ventilation does not mean that it cannot effectively deliver satisfactory comfort year-round in many climates. In many circumstances, the techniques were used extensively before widespread use of air conditioning.
8. How can you get high-quality materials and systems and good environmental performance at the same time?
Removing highly toxic chemicals from a product or designing a fixture to use less water does NOT mean that the product will be less effective or have a shorter life.
A high-performance commercial building design strategy requires a clear definition of goals and performance benchmarks from the owner, and an inter-disciplinary design and construction approach. Design criteria should be based on environmental and energy cost/benefit analyses and attention to whole-building and system performance
Because all commercial building components must work together successfully long after project completion, it is essential that sufficient time be set aside in the beginning of a project for design team development, goal-setting, and project-planning. A sustainable building can only be accomplished when everyone (the building owner, future occupants, design team) have the same energy and environmental goals for the project from the start. In short, everyone who is affected by this building in a decision-making position should be involved at the project’s beginning. Ultimately, the building owner is responsible for setting the goals and their implementation. It is the design team’s responsibility to translate goals and budget for the project into measurable benchmarks for design, construction, and operations so the project will be successful.
Traditionally, commercial building design choices are based on budget and/or time considerations. Single-building components are added or deleted to meet time or budget constraints without evaluating their impact on total building performance. Yet, basic design goals, such as minimizing energy consumption or maximizing daylight, cannot be done without understanding the impact of interrelations between the parts of the building, including window-glazing systems, the thermal envelope, mechanical system-integration, orientation, and floor-plate proportions. High-performance building design must ensure complete integration to achieve optimal building performance. These interrelations are very complex. As a result, computerized simulation studies are necessary to properly account for interrelationships. Water and resource conservation, along with recycled, reusable and non-toxic, sustainable materials should also be considered in the design stage.
Building construction is an act of creation than begins long before the first shovel pierces the ground. It begins with a statement of design intent, followed by creation of a performance program. Once these are approved, the process concludes with drawings and specifications, and then, finally, building commissioning during occupancy. Although simplified, below are some general guidelines:
Statement of Intent — A good statement of intent will clearly set forth the goals of the project, and current and possible future uses for the building, as well as a description of how building systems are to perform. Clearly defined goals and objectives here will help in the bidding process later on.
Performance Program — The performance program is the strategy for implementing the goals established by the statement of intent, such as budget, space planning, integrated building systems, and other specific needs. It will also set performance goals for systems, such as lighting wattage per square foot, and include such amendments as elimination of toxic materials. Several building rating systems exist that can be used to write the performance programs, such as the U.S. Green Building Council’s Leadership in Energy and Environmental Design, or the LEED rating system.
Drawings and Specifications — These record the design intent. Most design firms use the format created by the Construction Specifiers Institute (CSI). However, keep in mind that for high-performance buildings, you will need to add “integrated systems drawings” and supporting documents that will illustrate how different building components relate to and impact each other. Specifications that accompany the drawings must clearly explain the design intent, especially if a project includes unusual or innovative practices or requirements.
Building Commissioning — This is the process of ensuring that building systems, such as air-handling equipment, security systems, and elevators, are designed, installed, functionally tested and capable of being operated and maintained according to the owner’s operational needs. Commissioning begins in the design stage and extends at least one year into the initial occupancy of the building. This process ensures that the building is operating as designed. It also saves building owners money by keeping equipment and building systems compliant with warranties, prevents future excessive repairs, reconfiguration and replacement costs, employee absenteeism due to uncomfortable work environments with poor air quality, and frequent tenant turnover.📷In summary, the construction of high-performance buildings has numerous benefits, such as the dramatic reduction of greenhouse gas emissions and energy savings.
If you want to build a new home, there are things you need to know before you begin. Learn about construction standards and about buying land, so you know your rights.
MPS Supplementing Model Building Codes
The Minimum Property Standards (MPS) establish certain minimum standards for buildings constructed under HUD housing programs. This includes new singlefamily homes, multi-family housing and healthcare-type facilities.
HUD Minimum Property Standards and How They Supplement the Model Building Codes
Until the mid-1980s, HUD maintained separate Minimum Property Standards for different types of structures. Since that time, HUD has accepted the model building codes, including over 250 referenced standards and local building codes, in lieu of separate and prescriptive HUD standards. However, there is one major area of difference between the MPS and other model building codes — durability requirements. Homes and projects financed by FHAinsured mortgages are the collateral for these loans, and their lack of durability can increase the FHA’s financial risk in the event of default. More specifically, the model codes do not contain any minimum requirements for the durability of items such as doors, windows, gutters and downspouts, painting and wall coverings, kitchen cabinets and carpeting. The MPS includes minimum standards for these, and other items, to ensure that the value of an FHA-insured home is not reduced by the deterioration of these components.
HUD Field Office Acceptance for Areas Without Building Codes
HUD requires that each property insured with an FHA mortgage meet one of the nationally recognized building codes or a state or local building code based on a nationally recognized building code. In areas where such state or local codes are used, HUD determines if the state or local code is comparable to the model building code. There are also areas of the United States that do not have building codes. If no state or local building code has been adopted, the appropriate HUD Field Office will specify a building code that is comparable to one of the nationally recognized model building codes.
Interstate Land Sales
The Interstate Land Sales program protects consumers from fraud and abuse in the sale or lease of land. In 1968, Congress enacted the Interstate Land Sales Full Disclosure Act, which is patterned after the Securities Law of 1933, and requires land developers to register subdivisions of 100 or more nonexempt lots with HUD, and to provide each purchaser with a disclosure document called a property report. The property report contains relevant information about the subdivision and must be delivered to each purchaser before the signing of the contract or agreement.
Buying Lots from Developers
Be well informed when shopping for land. Lots may be marketed as sites for future retirement homes, for second home locations, or for recreational or campsite use. However, be wary of any investment aspect that may be stressed by sales personnel. If you plan to purchase a lot which is offered by promotional land sales, take plenty of time before coming to a decision. Before signing a purchase agreement, a contract, or a check:
know your rights as a buyer;know something about the developer;know the facts about the development and the lot you plan to buy; and know what you are doing when you encounter high-pressure sales campaigns.
Generally, if the company from which you plan to buy is offering 100 or more unimproved lots for sale or lease through the mail or by means of interstate commerce, it may be required to register with the U.S. Department of Housing and Urban Development (HUD). This means that the company must file with HUD and provide prospective buyers with a property report containing detailed information about the property. Failure to do this may be a violation of federal law, punishable by up to five years in prison, a $10,000 fine, or both. The information filed by the developer and retained by HUD must contain such items as these:
a copy of the corporate charter and financial statement;information about the land, including title policy or attorney’s title opinion, and copies of the deed and mortgages;information on local ordinances, health regulations, etc.;information about facilities available in the area, such as schools, hospitals and transportation systems;information about availability of utilities and water, and plans for sewage disposal;development plans for the property, including information on roads, streets and recreational facilities; and supporting documents, such as maps, plans and letters from suppliers of water and sewer facilities.
The company filing this information must swear and affirm that it is correct and complete, and an appropriate fee must accompany submission. The information is retained by HUD and is available for public inspection. The property report, which is also prepared by the developer, goes to the buyer. The law requires the seller to give the report to a prospective lot purchaser prior to the time a purchase agreement is signed. Ask for it. The seller is also required to have the buyer sign a receipt acknowledging receipt of the property report. Do not sign the receipt unless you have actually received the property report. Check the developer’s property report before buying. This is the kind of information you will find in a property report:
distances to nearby communities over paved and unpaved roads;existence of mortgages or liens on the property;whether contract payments are placed in escrow;availability and location of recreational facilities;availability of sewer and water service or septic tanks and wells;present and proposed utility services and charges;the number of homes currently occupied;soil and foundation conditions which could cause problems in construction or in using septic tanks; andthe type of title the buyer may receive and when it should be received.
Read the Property Report Before Signing Anything
This report is prepared and issued by the developer of this subdivision. It is not prepared or issued by the federal government. Federal law requires that you receive this report prior to signing a contract or agreement to buy or lease a lot in this subdivision. However, no federal agency has judged the merits or value of the property. If you received the report prior to signing a contract or agreement, you may cancel your contract or agreement by giving notice to the seller any time before midnight of the seventh day following the signing of the contract or agreement. If you did not receive this report before you signed a contract or agreement, you may cancel the contract or agreement any time within two years from the date of signing.
Your Contract Rights
If the lot you are buying is subject to the jurisdiction of the Interstate Land Sales Full Disclosure Act, the contract or purchase agreement must inform you of certain rights given to buyers by that Act. The contract should state that the buyer has a “cooling-off” period of seven days (or longer, if provided by state law) following the day that the contract is signed to cancel the contract, for any reason, by notice to the seller, and get his or her money back. Furthermore, unless the contract states that the seller will give the buyer a warranty deed, within 180 days after the contract is signed, the buyer has a right to cancel the contract for up to two years from the day that the contract is signed, unless the contract contains the following provisions:
a clear description of the lot so that the buyer may record the contract with the proper county authority;the right of the buyer to a notice of any default (by the buyer), and at least 20 days after receipt of that notice to cure or remedy the default;a limitation on the amount of money the seller may keep as liquidated damages, of 15% of the principal paid by the buyer (exclusive of interest) or the seller’s actual damages, whichever is greater.
Contract Rights Concerning Property Reports
It has always been the law that if the developer has an obligation to register with the Interstate Land Sales Division, the developer or sales agent must give the buyer a copy of the current property report before the buyer signs a contract. Otherwise, the buyer has up to two years to cancel the contract and get their money back. That fact must also be clearly set forth in all contracts. You may have the right to void the contract if the subdivision has not been registered with HUD, or you were not given a property report. Furthermore, if the developer has represented that it will provide or complete roads, water, sewer, gas, electricity or recreational facilities in its property report, in its advertising, or in its sales promotions, the developer must obligate itself to do so in the contract, clearly and conditionally (except for acts of nature or impossibility of performance). In addition to the right to a full disclosure of information about the lot, the prospective buyer may have the right to void the contract and receive a refund of their money if the developer has failed to register the subdivision with HUD or has failed to supply the purchaser with a property report. While a purchaser may have the right to void the contract with the developer under these conditions, the purchaser may still be liable for contract payments to a third party if that contract has been assigned to a financing institution or some similar entity. The registration is retained by HUD and is available for public inspection. If the property report contains misstatements of fact, if there are omissions, if fraudulent sales practices are used, or if other provisions of the law have been violated, the purchaser may also sue to recover damages and actual costs and expenses in court against the developer. However, depending on when your sale occurred, you may be barred from taking further action due to the Act’s statute of limitations. Your attorney can advise you further on this matter.
Even if you received the property report prior to the time of your signing of the contract or agreement, you have the right to revoke the contract or agreement by notice to the seller until midnight of the seventh day following the signing of the contract. You should contact the developer, preferably in writing, if you wish to revoke your contract and receive a refund of any money paid to date. Even if the property report is delivered to you before you sign a sales agreement, the law gives you a “cooling-off ” period. This right cannot be waived.
A Word About the Interstate Land Sales Division
The HUD unit which administers the law, examines the developer’s registration statement, and registers the land sales operator is the Interstate Land Sales Division. Except for disclosure purposes, this office is not concerned with zoning or land-use planning, and has no control over the quality of the subdivision. It does
not dictate what land can be sold, to whom, or at what price. It cannot act as a purchaser’s attorney. But it will help purchasers secure the rights given to them by the Interstate Land Sales Full Disclosure Act. HUD is authorized by law to conduct investigations and public hearings, to subpoena witnesses and secure evidence, and to seek court injunctions to prevent violations of the law. If necessary, HUD may seek criminal indictments. HUD is authorized by law to conduct investigations and, if necessary, seek criminal indictments.
Exemptions from the Law
The prospective buyer should be aware that not all promotional land sales operations are covered by the law. If the land sales program is exempt, no registration is required by HUD, and there will be no property report. Here are some of the specific situations for which the statute allows exemptions without review by HUD, including the sale of:
tracts of fewer than 100 lots which are not otherwise exempt;lots in a subdivision where every lot is 20 acres or more in size;lots upon which a residential, commercial or industrial building has been erected, or where a sales contract obligates the seller to build one within two years;certain lots which are sold only to residents of the state or metropolitan area in which the subdivision is located;certain low-volume sales operations (no more than 12 lots a year);certain lots that meet certain local codes and standards and are zoned for single-family residences or are limited to single-family residences by enforceable codes and restrictions; andcertain lots, contained in multiple sites of fewer than 100 lots each, offered pursuant to a common promotional plan.
Other exemptions are available which are not listed above. If you have reason to believe that your sale is not exempt and may still be covered by the law, contact the Interstate Land Sales Division.
Know the Developer
Knowing your rights under the law is the first step in making a sensible land purchase. To exercise those rights, you also must know something about the honesty and reliability of the developer who offers the subdivision that interests you. Don’t fail to ask questions. Whether you are contacted by a sales agent on the phone or by mail, at a promotional luncheon or dinner, in a sales booth at a shopping center, or in the course of your own inspection of the subdivision, make it your business to find out all you can about the company and the property. In addition, get any verbal promises or representations in writing. Don’t fail to ask questions. If you are seriously interested in buying a lot, ask if the company is registered with HUD or is entitled to an exemption. Request a copy of the property report and take the time to study it carefully and thoroughly. If you still have unanswered questions, delay any commitment until you have investigated. Discuss current prices in the area with local independent brokers. Talk to other people who have purchased lots. A local Chamber of Commerce, Better Business Bureau, or consumer protection group may have information about the seller’s reputation. Inquire through county or municipal authorities about local ordinances or regulations affecting properties similar to that which you plan to buy. Don’t be high-pressured by sales agents.
Know the Facts About the Lot
Once you have decided on an appealing subdivision, inspect the property. Don’t buy “sight unseen.” Better yet, hire an InterNACHI inspector to perform a thorough property inspection. Also, check the developer’s plans for the project and know what you are getting with your lot purchase. It’s a good idea to make a list of the facts you will need to know. Some of the questions you should be asking, and answering, are these:
How large will the development become?What zoning controls are specified?What amenities are promised?What provision has the developer made to assure construction and maintenance?What are the provisions for sewer and water service?Are all of the promised facilities and utilities in the contract?Will there be access roads or streets to your property, and how will they be surfaced? Who maintains them? How much will they cost?Will you have clear title to the property? What liens, reservations or encumbrances exist?Will you receive a deed upon purchase or a recordable sales contract?What happens to your payments? Are they placed in a special escrow account to pay for the property, or are they spent at once by the developer?If the developer defaults on the mortgage or goes bankrupt, could you lose your lot and investment to date to satisfy a claim against the development?What happens when the developer moves out? Is there a homeowners’ association to take over community management?Are there restrictions against using the lot for a campsite until you are ready to build?Are there any annual maintenance fees or special assessments required of property owners?
This is a partial list of points to consider before you commit your money or your signature.
Know What You are Doing
Interstate land sales promotions often are conducted in a high-pressure atmosphere that sweeps unsophisticated buyers along. Before they are aware that they have made a commitment, these buyers may have signed a sales contract and started to make payments on a lot. They may be delighted with the selection made, but, if not, it may be too late for a change of mind.
Nine Dishonest Sales Practices
Here are some of the practices avoided by reliable sales operations. Watch out for them and exercise sales resistance if you suspect they are occurring:
concealing or misrepresenting facts about current and resale value. Sales agents may present general facts about the area’s population growth, industrial or residential development, and real estate price levels as if they apply to your specific lot. You may be encouraged to believe that your piece of land represents an investment which will increase in value as regional development occurs. A sales agent may tell you that the developer will re-sell the lot, if you request. This promise may not be kept. Future resale is difficult or impossible in many promotional developments because much of your purchase price — sometimes as much as 40% — has gone for an intensive advertising campaign and commissions for sales agents. You are already paying a top price and it is unlikely that anyone else would pay you more than you are paying the developer. You may even have to sell for less than the price you originally paid for the lot. Sales promotions often are conducted in a high-pressure atmosphere. Furthermore, when you attempt to sell your lot, you are in competition with the developer, who probably holds extensive, unsold acreage in the same subdivision. In most areas, real estate brokers find it impractical to undertake the sale of lots in subdivisions and will not accept such listings. It is unlikely that the lot you purchase through interstate land sales represents an investment, in the view of professional land investors. Remember, the elements of value of a piece of land are its usefulness, the supply, the demand, and the buyer’s ability to re-sell it. The Urban Land Institute estimates that land must double in value every five years to justify holding it as an investment. In some areas, the cost of holding the land, such as taxes and other assessments, can run as high as 11% a year.failure to honor refund promises or agreements. Some sales promotions conducted by mail, email or long-distance telephone include the offer of a refund if the property has been misrepresented, or if the customer inspects the land within a certain period of time and decides not to buy. When the customers request the refund, s/he may encounter arguments about the terms of the agreement. The company may even accuse its own agent of having made a money-back guarantee without the consent or knowledge of the developer. Sometimes, the promised refund is made, but only after a long delay.misrepresentation of facts about the subdivision. This is where the property report offers an added measure of protection. A sales agent may offer false or incomplete information relating to either a distant subdivision or one which you visit. Misrepresentations often relate to matters such as the legal title, claims against it, latent dangers (such as swamps or cliffs), unusual physical features (such as poor drainage), restrictions on use, or lack of necessary facilities and utilities. Read the property report carefully with an eye to omissions, generalizations, or unproved statements that may tend to mislead you. If you are concerned about overlooking something important, discuss the report and the contract with a lawyer who understands real estate matters. The developer also may use advertisements that imply that certain facilities and amenities are currently available when they are not. Read the property report to determine whether these facilities and amenities are actually completed, or proposed to be completed in the future. If the company advertises sales on credit terms, the Truth in Lending Act requires the sales contract to fully set forth all terms of financing. This information must include total cost, simple annual interest, and total finance charges.failure to develop the subdivision as planned. Many buyers rely upon the developer’s contractual agreement or a verbal promise to develop the subdivision in a certain way. The promised attractions that influenced your purchase (golf course, marina, swimming pool, etc.) may never materialize after you become an owner. If they are provided, it may be only after a long delay. If you are planning on immediate vacation use of the property, or are working toward a specific retirement date, you may find that the special features promised of the development are not available when you need them.failure to deliver deeds and/or title insurance policies. Documents relating to the sales transaction may not be delivered as promised. Some sales in the promotional land development industry are made by contract for a deed to be delivered when the purchaser makes the last payment under the terms of the contract. A dishonest developer may fail to deliver the deed, or deliver it only after a long delay. A sales agent may offer false or incomplete information.abusive treatment and high-pressure sales tactics. Some sales agents drive prospective customers around a subdivision in automobiles equipped with citizen band radios which provide a running commentary on lot sales in progress. The customer may be misled by this and other sales techniques to believe that desirable lots are selling rapidly and that a hurried choice must be made. Hurrying the buyers into a purchase they may later regret is only one ploy of high-pressure sales agents. More offensive is abusive language used to embarrass customers who delay an immediate decision to buy. In some instances, hesitant buyers have been isolated in remote or unfamiliar places where transportation is controlled by the sales agent or the agent’s organization.failure to make good on sales inducements. Free vacations, gifts, savings bonds, trading stamps, and other promised inducements are used to lure people to sales presentations or to development sites. These promised treats may never materialize. Sometimes, special conditions are attached to the lure, or a customer is advised that gifts go only to lot purchasers. A “free vacation” may be the means of delivering the prospective buyer to a battery of high-pressure sales agents in a distant place. The promised attractions may never materialize.”bait and switch” tactics. Lots are frequently advertised at extremely low prices. When prospective buyers appear, they are told that the low-priced lots are all sold and then are pressured to buy one that is much more expensive. If the cheaper lot is available, it may be located on the side of a cliff or in another inaccessible location. If accessible, it may be much too small for a building or have other undesirable features. The buyers may be lured to the property with a certificate entitling them to a “free” lot. Often, the certificate bears a face value of $500 to $1,000. If the buyers attempt to cash it in, the amount is simply included in the regular price (often inflated) of the lot they choose. Often, this so-called “bait and switch” technique has a delayed fuse. Buyers who purchase an unseen lot for later retirement may be unpleasantly surprised when they visit the development. The lot they have paid for may be remote from other homes, shopping and medical facilities. It may be insufficiently developed for use. When the buyers complain, sales personnel attempt to switch them to a more expensive lot, applying the money paid for the original lot to an inflated price for the new one, and tacking on additional financing charges. If the unhappy purchasers lack sufficient funds to accept this alternative, they are left with an unusable, unmarketable first choice.failure to grant rights under the Interstate Land Sales Full Disclosure Act. Purchasers may not be given copies of the property report before they sign a sales contract. Some sales agents withhold this detailed statement until customers choose a specific lot. Sometimes, the buyers receive the report in a mass of promotional materials and legal documents. Unaware that the report is in their possession, they fail to read and understand it before signing a sales contract.