Security Cameras in a Vacation Rental

More and more, vacation rental tenants are encountering properties with security cameras installed, which causes concerns about violation of privacy.

Is it legal for homeowners to install security cameras at a rental property? Are there specific areas where surveillance can be placed or not? Do tenants have to be notified if surveillance cameras are in place?

Homeowners

Homeowners are generally within legal bounds to install surveillance cameras to protect their property. Cameras must be visible in common areas such as front door, driveway, and backyard. This is considered a reasonable measure to protect against break-ins and suspicious activities.

Homeowners should not install surveillance cameras in any interior spaces where tenants have a reasonable expectation of privacy. Invading a right to privacy can lead to a violation of the law. While there are no specific laws regarding visible security cameras, there IS a law that covers wiretapping. In most states, you are absolved from wiretapping if you have the consent of at least one of the parties involved. However, Massachusetts has a two-party consent law. The law states that you need the consent of both parties to legally record a conversation. Otherwise, you might be convicted of wiretapping. Bottom line, when using a security camera, be sure that people who are recorded know that they are being recorded.

HIDDEN cameras are forbidden inside rental homes. In many states, unauthorized installation or use of hidden cameras is a felony, punishable with a significant fine and/or up to 2 years in prison. If hidden cameras are revealed in rental homes and found invading occupants’ right to privacy, the homeowner could face criminal charges and penalties.

If a homeowner intends to install cameras outside or inside a rental property, (s)he should be sure to notify the rental agency and/or the tenant to be transparent and specific about the visible surveillance system before signing any leases.

While there are surely benefits of having cameras installed at a rental property, it is understandable that a vacation rental tenant would object to being observed while on holiday.  Homeowners should consider using surveillance equipment sparingly during the rental season.  The off-season is a more appropriate time when the property is vacant for an extended period of time.

Home security cameraTenants and Guests

Before signing a lease, tenants and guests should be sure they are aware of and complicit with any and all surveillance equipment on the premises.  Review the lease contract carefully to see if the presence of homeowner surveillance cameras is mentioned in written form.

If hidden surveillance cameras are found inside a rental property and without your knowledge and consent, contact local police, who can help determine whether or not the presence of such equipment is unlawful.

The information above is deemed reliable but is not guaranteed and should not be considered legal advice.  Please consult local police and/or your attorney for expert advice regarding this matter.

What is Title V and Why Do I Care?

When searching the Cape & Islands MLS, you’ll frequently encounter references to something known in Massachusetts as “Title V”, a state regulation pertaining to septic systems. Many buyers of Cape Cod homes live off-Cape in metropolitan areas such as Boston and New York City and are unfamiliar with septic systems. If you are one of these people, here’s a brief summary of what you need to know when buying a home on Cape Cod.

The Journey of Waste

Nearly very home has a large drain pipe in the basement or under the house that passes through the foundation and exits the home.  Every toilet, sink, shower, bathtub, and washing machine drains into this primary drain pipe, so that all water and waste exits the home.  But where does it go once it leaves?  That depends on where you live.

The majority of Americans are serviced by sewer systems.  Sewage exits the home and connects to the municipal sewer system where it is drained, treated at a treatment plant, and returned to the environment.  In some rural areas like Cape Cod, sewers are just starting to be installed.  Instead, each home is serviced by a private sewage system located on its own property.  SepticSystemOlder systems are typically the cesspool variety, whereas newer systems are referred to as septic systems (see diagram) that must meet current state regulations known as Title V.

In both cases, the system is buried in the ground outside the house.  Homeowners have the tank pumped periodically to remove the solids that accumulate over time.

Enter Title V

In the mid-70’s, in an attempt to protect especially groundwater from being adversely effected by sewage, Massachusetts adopted Title V, a set of regulations governing the proper siting, construction, upgrade, and maintenance of septic systems and the transport and disposal of sanitary sewage.  Local Boards of Health are tasked with the enforcement of Title V.  One of the key rules related to Title V and effecting both homeowners and home buyers is that all homes with private sewage systems must pass a Title V inspection before being sold.  The inspection is generally initiated and paid for by the seller, and typically costs in the neighborhood of $400.  It should be noted that in many Cape Cod towns, presence of a cesspool system is an automatic failure, so no test is needed.

If the system passes, the homeowner is issued a Title V certificate by the town that is good for 2 years. If the home is sold again in 2.5 years, another inspection must take place.  If the system fails, a new septic system MAY need to be installed, but not always. A brand new system typically costs in the neighborhood of ten thousand dollars, but could run as high as FIFTY thousand dollars, depending on a variety of factors, such as being located in a flood zone.

There is no law dictating who pays for the new septic system, although the cost is generally absorbed by the seller.  Ideally, the new system should be completely installed and approved prior to the sale, although there are situations when the town will allow the sale to take place prior to the final installation and approval.  Financial assistance, in the form of low interest rate loans, is available to help homeowners finance the cost of a new septic system.

In summary, if you are a Cape Cod homeowner who is thinking of selling your home and you are serviced by a cesspool or septic system, it may be in your best interest to have the system tested BEFORE you list your home so that you’ll at least know whether or not you need to factor in a brand new septic system.  If you are a buyer looking to purchase a home on the Cape, one of the first questions you should ask is whether or not the Title V inspection has been done and if so, if it passed.  Whether you are the buyer or seller, your real estate agent should be able to assist you with Title V compliance issues.

For more information on Title V, click here.

For more information on Title V financing assistance, click here.

Home Buying 101

Many Cape Cod home buyers haven’t bought a home in a very long time and possibly NEVER in Massachusetts.  Others may be first-time home buyers altogether.  Below is a list of the basic steps involved in a typical home purchase in Massachusetts.  To assist you throughout each of these steps, be sure you are working with a reputable, knowledgeable Buyer’s Agent.  Not only does it not cost you anything, but it will save you significant time, frustration, and in many cases, money as well.  Please don’t hesitate to contact me for expert, personalized assistance.  It would be my privilege to assist you.

 

Obtain a current pre-approval letter or proof-of-funds.

Before you begin actually visiting homes with a Realtor, you should be certain how much home you can afford.  There is no point wasting your time looking at homes you cannot afford.  If you do not have a pre-approval letter in-hand, you will realistically not be able to make an offer on a home, in which case you are not quite ready to be viewing homes in person.  Speak to your lender and ask him/her for a pre-approval letter.  If you don’t have a lender, contact me and I will provide you with some trusted contacts.

Shop for homes with your Buyer’s Agent.

A Realtor who is acting as your Buyer’s Agent owes his/her complete fiduciary responsibility to YOU, and therefore can provide you with information and assistance that the agent representing the seller cannot.  And best of all, it doesn’t cost you a dime.  If your Realtor has a good website with full MLS property search capabilities, you can browse homes initially at your leisure from the comfort of your own home.  When you’re truly ready to buy, your Realtor can help you narrow down your choices, set up all of your appointments, and provide you with valuable information about the local market and area.

Find out from your Buyer’s Agent what the home is REALLY worth.

One of the most important services a Buyer’s Agent can provide is information that will help you decide the REAL value of the homes you like.  A seller can ask whatever (s)he wants for a home and the Seller’s Agent is obligated to do what the seller requests.  But a good Buyer’s Agent knows the market and will provide you with a detailed report showing the actual sale prices of similar properties that have recently sold.  This will help you arrive at the best offer price for the home.

Make an offer and negotiate final price & terms.

Once you’ve decided on an offer price, your Realtor (Buyer’s Agent) will prepare all the paperwork, have you sign it, and submit it to the Seller’s Agent, along with a good faith deposit, which is typically $500-$1000.  Usually, there is some back and forth that takes place before both parties agree to a final price and terms.  Your Buyer’s Agent will assist you throughout this process until you and the seller have come to an agreement (or not).  If an agreement is reached, many wheels are suddenly set in motion, as described below.  If you could not come to an agreement, you take back your good faith deposit and resume house shopping with your Realtor!

Apply for a mortgage (unless paying cash).

Once your offer is accepted, and assuming you are not paying cash for the home, you should submit a completed application for your mortgage.  It will take a while for the bank to collect ALL the information they need from you, and the sooner you begin this process, the better.  Plus, the offer you submitted most likely has a date by which you must have applied for your mortgage.  Be sure to read all dates very carefully and be sure to comply with each deadline! A good Buyer’s Agent will keep track of all this for you to ensure that you do not inadvertently lose your deposit.

Conduct your inspections.

Next, you must immediately schedule your home inspection and any other inspections you requested (such as termite, lead paint, radon, etc.)  A buyer typically has about 2 weeks to complete these inspections from the acceptance of the offer.  If you are happy with the results of the inspection, you continue with the process.  If you are not, you typically can either back out of the deal and get your deposit back, or you can try to renegotiate with the seller to address any inspection issues that concern you.  For example, if you learned the roof is at the end of its life and you had no way of knowing this prior to the inspection, you may want to negotiate a lower price to reflect the condition of the roof.

Execute a Purchase & Sale Agreement.

If you are proceeding with the sale after all inspections are complete, you will typically then sign a Purchase & Sale Agreement (aka P&S).  This is a longer and more detailed contract than the initial offer form that spells out all of the terms of the sale.  It is typically prepared by the seller’s attorney and you should have your own attorney review it and make any necessary changes on your behalf.  Your Buyer’s Agent can assist you with selecting a reputable Cape Cod real estate attorney if you do not already have one.  A buyer typically makes a second and much larger deposit at this time.  This deposit is completely negotiable but is typically at least 5% of the sale price.  10% is more common.  ALL deposits are typically and completely refunded if the buyer is unable to obtain a mortgage according to the terms of the P&S.

Bank conducts appraisal.

If you are applying for a mortgage, the bank will conduct an appraisal to be sure they agree with you regarding the value of the home.  Since they are loaning you the money to buy it, they want to be sure it is a sound investment for them to make.  This is actually very good for you, since it helps to reassure you that you are not overpaying for the home.  In some cases, it might reveal that you are getting a very good deal — at least in the bank’s eyes.

Wait for final loan commitment.

It typically takes 4-6 weeks to receive your loan commitment from the moment you submit a completed application.  During this time, you should stay in touch with your lender and be sure you are providing them everything they requested in the most timely manner possible.  This will help you get your commitment as soon as possible.  The seller will be very anxious for you to receive your commitment so that (s)he can be sure the sale is going through.

Confirm passing Title V and Smoke inspections with Seller.

While you are waiting on your mortgage commitment and planning paint colors for your new home, the Seller will be busy ensuring that the septic system passes Massachusetts Title V regulations and that the smoke and carbon monoxide detectors are up to code.  Both of these are typically required in order for the home to be sold.  Your Realtor can provide you with more information about each of these.

Obtain homeowner’s insurance (& flood insurance, if required/desired).

At least 2 weeks before the scheduled closing, you should contact an insurance company to obtain a homeowner’s policy for your new home.  You will not be allowed to close on your mortgage without it.  If the property is in a flood zone, flood insurance may also be required.  Insurance on the Cape can be tricky, so I recommend you contact John Curley at Dowling and O’Neil, one of the Cape’s premier property and casualty insurance agencies. He can be reached via email at jcurley@doins.com or by phone at (508) 957-4235.

Close on your new home!

By the time your actual closing date arrives, nearly everything has already been done, except for final mortgage signatures, final payment, and transfer of the deed!  The closing attorney (also called the bank’s attorney and sometimes, yet erroneously, called the buyer’s attorney) will contact you a couple of days before the closing to let you know exactly what funds you — the buyer — need to bring to the closing.  The closing typically takes place either at the Barnstable Registry of Deeds or in the closing attorney’s office.  But this differs from closing to closing.  The buyer leaves the closing table with the keys to the home and the seller leaves with a big fat check!

And VOILA — a new Cape Cod Homeowner is born!  I, for one, have never been so happy and have never looked back.

Author’s Disclaimer:  This post is intended to provide a general overview of the home buying process. However every transaction can have its own special situations or circumstances and might not be covered in this post. This post is intended for educational use only. The author does not accept responsibility for any misinterpretation or misapplication of the information contained in this post. The publishing of this material does not constitute the practice of law nor does it attempt to provide legal advice concerning any specific factual situation. FOR ADVICE ON SPECIFIC LEGAL PROBLEMS CONSULT LEGAL COUNSEL.

Buying a Cape Cod Investment Property

The newsletter goofed!  Click the link below for the blog article on the Home Buying Process.

Review of the Home Buying Process

 

Cape Cod is a peninsula off the east coast of Massachusetts boasting 550 miles of coastline. Much of that coastline is occupied by gorgeous, sandy beaches and picturesque harbors — making Cape Cod an ideal vacation spot and a perfect location for purchasing a second home. If the thought of owning a home on the Cape appeals to you, but you just don’t see how you can afford it until later in life, perhaps you’re not considering the fact that most homes on the Cape go a long way toward paying for themselves through summer rentals.

Consider the following example. A woman wishes to buy a relatively young 3-bedroom 2-bath home in Harwich for $400K. The home is a short drive or bike ride to the beach and to downtown Harwich Port, but not close enough to walk. The weekly summer rental rate is estimated at $2500. The woman plans to rent it for just 8 peak weeks in the summer, and use it herself the rest of the year. Her gross rental income will be $20,000 annually. If we deduct from that the estimated rental agency fee of $3,000, and another $2000 for cleaning and utilities during the rental period, the net rental income is roughly $15,000.

If the buyer puts 20% down ($80,000), she will be mortgaging $320,000, which will result in an estimated monthly payment of $2000 — taxes and homeowner’s insurance included. So her annual mortgage, tax and insurance payment will be $24,000, or roughly $9,000 more than the gross rental income. She’ll be able to deduct her mortgage interest, real estate taxes, and some other expenses on her taxes, resulting in further subtractions from the $9000. In the end, owning her new Cape home might only cost her in the neighborhood of $6,000 annually. And this does not factor in the money she will save by not renting someone else’s home, nor the fact that she will now have a Cape house that she and her family and friends can use 44 weeks out of the year.

So if you’ve been putting off buying the beach house because you think you can’t afford it, don’t forget that a home on the Cape is one of those few investments that can help pay for itself, and that you can actually enjoy in the meantime. For details and for expert advice, contact your accountant or financial advisor. And remember — nobody on their deathbed ever said they wished they’d spent less time relaxing on Cape Cod. Happy Holidays!

A FLOOD of Questions!

You’ve probably heard that FEMA has revised its flood maps nationwide and that many Cape Cod homeowners may now require expensive flood insurance policies, even if they never needed them before.  These maps, the proposed increases, and bills aimed at delaying their adoption have been a great source of confusion for homeowners and Realtors alike for quite some time.


President Obama recently signed into law a bipartisan bill that will delay flood insurance rate hikes for property owners nationwide.  This is very good news for both buyers and sellers of Cape Cod properties since a significant percentage of our homes are or would be in noteworthy flood zones.


If you have questions about flood or homeowner’s insurance, or to be sure you are receiving the best possible rates on ALL your personal and commercial lines of insurance, please contact John Curley at Dowling & O’Neil Insurance Agency at (508) 957-4235 or by email at jcurley@doins.com.  He’ll take good care of you.  Tell him I sent you.



New Year – New Mortgage! Update Your Pre-Approval Letter!

If you’re in the market for a home on the Cape, a current pre-approval letter is essential to your success (or proof of funds if you are paying cash).  An offer is incomplete without one of these documents and will not be taken seriously by the Seller.  If your pre-approval letter is more than 30 days old, you would be wise to get it updated.  Rules have changed and Sellers don’t want to take chances.  Before you go shopping, contact your Lender for an updated pre-approval.  If you don’t have a lender, contact Dave Gravelle at Merrimack Mortgage.  He’d be happy to help you out.

‘Tis the Season

Christmas is a time when many of us take a break from the stresses and worries of our everyday lives and focus, even for a moment, on the better things in life.  The smile of a child, the smell of a fresh wreath, the comfort of family and friends, the generosity of strangers.  And so shall I take a break from my everyday posts about buying a home on Cape Cod and focus for a moment on one of those things.

A couple of nights ago, I had dinner with a friend at the Impudent Oyster in Chatham.  We sat at the bottom of the U-shaped bar which was very quiet, as one would expect on a Monday night in early December.  A friendly man, possibly in his 40’s, was dining perpendicular to the right of us, and two lovely silver-haired ladies were perpendicular to our left.  The ladies were clearly enjoying their dinner and evening together, and the man was engaged in conversation with our female bartender (who happens to be terrific).  My friend and I were busy discussing the particulars of our day.

First to leave was the friendly man, who after some whispering with the bartender, paid his bill and left.  The ladies were next, and began to put on their coats.  When they asked the bartender for the bill, she informed them that the gentleman sitting across from them insisted on paying for their dinners and drinks.  Needless to say, they were speechless.  Delighted.  Astounded.  And speechless.  They did not know the man.  They had no idea why he had paid their bill.  And when their speech returned, they could only repeat how they wished they could have thanked him.  They left the restaurant giddy as schoolgirls and feeling like a million bucks.

The incident reminded me of the infamous editorial from 1897: 

“Yes, VIRGINIA, there is a Santa Claus. He exists as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy. Alas! how dreary would be the world if there were no Santa Claus.”

Wishing you all a little magic this Christmas.

Marie

Welcome to BuyOnTheCape.com!

Dear Visitors,

Thank you for visiting this new online resource dedicated to assisting prospective buyers with the purchase of Cape Cod properties. Officially launching on April 12, 2011, BuyOnTheCape.com provides one-stop shopping for all your Cape Cod real estate needs, including:

• Fast, easy access to the entire Cape Cod MLS,
• Tips on buying foreclosures, short sales and bank-owned properties,
• Financing information & calculators,
• The most comprehensive list of Cape Cod golf residences,
• Information specific to those aged 50 and above,
• Town-specific information and market data,
• And much, much more.

BuyOnTheCape is presented by Cape Cod Realtor, Marie Kelly, of Realty Executives. Marie realized her own dream of owning a home on the Cape in 2004, and joined Realty Executives after a successful and rewarding 20 year career in software marketing management. By coupling her knowledge of and passion for Cape Cod real estate with her extensive online and traditional marketing expertise, Marie is in a unique position to assist with modern-day real estate needs.

If you are looking to buy on the Cape, please feel free to use BuyOnTheCape.com to browse the entire Cape Cod MLS, or contact Marie directly at (508) 259-8379 or Marie@BuyOnTheCape.com. Thanks for stopping by and we hope to hear from you soon!