Wednesday, July 4, 2018

Happy 4th of July! The Culture That Sustains America’s Constitution

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

OK, this is not about title insurance, but about the Constitution. It being July 4th, I've set out this column from the Wall Street Journal in full since a subscription may be required to view it on line.
I hope you enjoy it as much as I did:

The Culture That Sustains America’s Constitution

Without it, checks and balances are barricades of foam and counterweights of butterfly’s breath.

By 

Since 1789 the average life span of national constitutions world-wide has been 19 years, according to scholars at the University of Chicago. Meanwhile, “We the People of the United States” are now well into the third century under our Constitution. We’ve lived under the same written charter longer than any people on earth. We’ve had regular federal elections every two years, uninterrupted even by the Civil War.
Yet America’s Founders had serious doubts about the durability of their “experiment.” Alexander Hamilton, in an 1802 letter to Gouverneur Morris, wondered why he had wasted his best years defending our “frail and worthless” charter. In 1832 Chief Justice John Marshall, near the end of his 34-year tenure, lamented in private correspondence that “our Constitution cannot last.”
You might think America’s track record in the subsequent 200 years would inspire greater confidence. Yet many people today feel, as they have after many fraught elections, that the president is either a savior or the harbinger of doom. So it’s worth reflecting on why the Constitution has endured.
There is, first, its text: It is rigid enough to restrain excesses, yet flexible enough to accommodate innovations. It is so terse that you could fold it into a paper airplane (though the guards at the National Archives would prefer you didn’t). It presumes that both governors and the governed will act mostly responsibly. But as Robert H. Jackson, a future Supreme Court justice, explained in 1937: “Checks and balances work as effectively on spite, jealousy or personal ambition as they do on patriotism or principle.”
The Framers also created the world’s first constitution to institutionalize the principle of human equality. Consider that it was an immigrant who put the words “We the People” into the Constitution. He was James Wilson, the brilliant but forgotten Scottish-born founder who taught that under monarchy, in the “attempt to make one person more than man, millions must be made less.”
Popular rule had become more than a slogan. Alexis de Tocqueville visited in 1831 from France, where the crowned heads at Versailles dared not mingle with their people. He was astonished to meet state governors who had kept their day jobs as farmers. Later Tocqueville visited Andrew Jackson in the White House, where the president himself, with no servant in sight, served glasses of Madeira.
America’s progress in respecting the real implications of equality has at times been slow, even glacial, especially with regard to race. As early as 1876, black fathers in Kansas sought to have their children admitted to schools on equal terms with white children. Yet Brown v. Board of Education would not come for another 78 years. The truth that justice will be forever approximated but never achieved is reflected in the paradoxical words of the Constitution’s preamble: the aim of forming a “more perfect” union.
That impossibly shrewd phrase suggests that Americans have a miraculous thing that we must nevertheless strive to make better. In the 1940s, we interned Japanese-Americans out of misbegotten wartime racial hysteria. But we also apologized for it in a 1998 law that was co-sponsored by then-Rep. Norman Mineta. As a child, Mr. Mineta had been taken to an internment camp in Wyoming. He went on to serve 20 years in the House and five years as secretary of transportation.
“Every banana republic has a Bill of Rights,” Justice Antonin Scalia told a Senate committee in 2011. Written guarantees are meaningless without a culture to sustain them. Russia’s Constitution purports to secure the freedoms of speech and press, but Muscovites shrugged in 2001 when Vladimir Putin seized the last independent television network. Imagine if the White House swallowed up Fox News, CNN and MSNBC, one after another. Americans may bicker over “fake news,” but an attempt at censorship like that would unite us in virtuous rage.
Every American generation has a vocal minority that considers itself doomed to live in an age of constitutional degeneracy. The supposed fall from purity began about 600 days into the Constitution’s life, when the Virginia Legislature, in November 1790, denounced George Washington’s financial policies as constitutionally blasphemous. But Americans chose to cannonade each other with pamphlets, not artillery. And so the orderly transitions of power went on, one after another, like a never-ending football game in which the parties eternally gain and lose yardage.
Constitutionalism is not a mere institutional form but a culture—a set of sentiments, habits and assumptions, a permeating spirit that animates an otherwise lifeless paper scheme. Without this instinctive loyalty, the Constitution’s checks and balances are barricades of foam and counterweights of butterfly’s breath. It is not in having a constitution that our strength lies, but in cherishing it. So long as we keep the faith, our Constitution will be displaced no sooner than an ant tips over the Statue of Liberty.
Mr. Tartakovsky is author of “The Lives of the Constitution: Ten Exceptional Minds that Shaped America’s Supreme Law” and a former deputy solicitor general of Nevada.


For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
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Tuesday, July 3, 2018

New Jersey's Hidden Gems - its Land Preserves for Hiking, Canoeing and Kayaking

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

Looking for a place to hike, canoe, or kayak?  New Jersey has them.  Check out the New Jersey Conservation Foundation for locations and more information.
Many of New Jersey Conservation Foundation's preserved properties are open to the public and offer beautiful locations for hiking, bird-watching, bicycling, picnicking, nature photography and outdoor fun with the family. Some preserves have spots for fishing, kayaking, canoeing and other non-motorized water sports. Preserves are open during daylight hours. 

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
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Monday, July 2, 2018

Solar panels and title insurance

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

With the demand everywhere for renewable energy, homeowners can have their own electrical generating system on the roof.  In fact, solar panels can be seen in just about any neighborhood in New Jersey.  But there are some issues that have to be understood.

From a title insurance perspective, does the homeowner own or lease the system?  The answer to this question can impact you when it comes time to sell or refinance your mortgage.

In addition, system leases can also seem to be unfair as this story from the Asbury Park Press reveals:

Nearly five years ago, Karen Coon signed up to put solar panels on her Lacey home without any upfront cost. She was attracted to the advertising and sales pitch that promised big savings on her monthly energy bills.
Coon said she didn't realize that when she signed the contract to lease the panels from Tredegar Solar Fund the agreement had a built-in rate hike that boosted the cost for her solar-generated electricity by 2.9 percent every year for 20 years.
With compounding, a $200-a-month bill today could top $340 a month at the end of the two decades — a 72 percent increase over the life of the contract.
Now, Coon said she made a mistake in signing up for solar power.
Read the full article.

If you have a question about the title aspects of solar panels, contact me, Stephen Flatow.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
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Something we take for granted in New Jersey - Where Residents Pay Buckets of Money—for Water

We are the New Jersey title insurance agent for you! For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

From WSJ.com:

Where Residents Pay Buckets of Money—for Water

Who thinks of how much we pay for water?  In New Jersey and New York, residents pay reasonable amounts for the essential supply of water that we need. But, in California, not necessarily so.  From the WSJ, a comparison:

In the ritzy Long Island beach community of Southampton, N.Y., the average home runs about $1.4 million and a pound of lobster salad costs around 100 clams. Good thing for homeowners that their water bills are likely to be low. The average Southampton resident pays just $54 a month.
Meanwhile, residents in tony Pebble Beach, Calif., shell out $601 a month, on average, for their water.
Spread Sheet asked real-estate data firms ATTOM Data Solutions and UtilityScore to compile average water and sewage bills for almost 11,000 cities across the country. The results are a tale of two coasts: Homeowners in some of the wealthiest enclaves on the California coast pay buckets of money for their water relative to what Hamptons residents pay.
In addition to Pebble Beach, a number of upscale oceanside California communities like Carmel ($506), Santa Barbara ($469), Monterey ($439) and Malibu ($251) have some of the nation’s highest water bills. Long Island enjoys some of the lowest—even exclusive Hamptons communities like East Hampton ($50), Water Mill ($56), Sag Harbor ($54) and Montauk ($49).
Read the full story at WSJ.COM

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow AT vested.com

#NewJersey #titleinsurance
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Friday, June 29, 2018

Bitcoin and real estate, title company perspective

We are the New Jersey title insurance agent that does it all for you.
For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

Bitcoin Bonanza Hits Real Estate

June 28, 2018
By Jeremy Yohe
It’s been reported that more than 100,000 merchants worldwide accept Bitcoin. Companies such as Microsoft, Expedia, Newegg. Overstock and Subway all accept Bitcoin payments. The cryptocurrency is no longer just a risky investment opportunity for the adventurous. It’s becoming an alternative way of paying for regular things—like real estate. It was only a matter of time before the cryptocurrency made its way into real estate closings on everything from land on Lake Tahoe in California to Manhattan condos.
Bitcoin has gained traction in areas such as Miami, which is a hotbed for foreign investors. These buyers are much more comfortable with the cryptocurrency than American companies. A Miami penthouse was listed in December for 33 Bitcoins—a value of around $544,500 at the time. The seller specified they would not accept any other form of payment. In Seattle, a homebuyer just used Bitcoin and other cryptocurrencies for the downpayment on a home in January.
In September 2017, Kuper Sotheby’s International Realty reportedly became the first brokerage in Texas to close on a home purchased entirely with Bitcoin. Sheryl Lowe of Kuper Sotheby’s International Realty, the agent who represented the buyer in the sale noted, “In all of my 33 years of closing transactions, I honestly couldn’t have expected something so unique to go so smoothly. In a matter of 10 minutes, the Bitcoin was changed to U.S. dollars and the deal was done.”
Title Company Essential to Process
Lowe pointed to the team at Independence Title for keeping everything together. Jay Fitzgerald, general Counsel for Independence Title, said the company has closed a few other transactions involving Bitcoin since last year. Independence Title has educated its escrow officers on what they need to be aware of when facilitating transactions involving cryptocurrency.
“For our purposes, it’s the same as having anyone come in with some sort of currency that doesn’t constitute good funds under Texas regulations,” he said. “There has got to be a conversion. It doesn’t matter if its pesos or Bitcoin.”
While the Bitcoin satisfies the agreed-upon price of the property, Fitzgerald says difficulty can arise when handling the other settlement costs that require payment in U.S. dollars.
“There is some doubling back, and it can cause some timing issues for loan payoffs,” he added.
There are two general ways to convert Bitcoin to cash: buyers may use a payment vendor service like Bitpay or use a Bitcoin investment account. Fitzgerald said Independence Title is considering developing a relationship with Bitpay or other vendors. This would eliminate each seller having to register with the payment vendor service.
“Maybe we can arrange to work within the vendor system so the money from the Bitcoin conversion can be deposited with us,” Fitzgerald said. “That will facilitate seller payoffs or any other fees that need paid. The buyer would still tender the Bitcoin to a conversion service, which would then wire the money to us.”
While the use of virtual currency continues to gain traction, there remains plenty of nervousness around the lack of regulations and understanding as to how gains in Bitcoin are taxed.
In March 2014, the Internal Revenue Service (IRS) issued a notice on virtual currency, such as Bitcoin. The notice provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that:
  • Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2 and are subject to federal income tax withholding and payroll taxes.
  • Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.
  • The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
  • A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
Things to Consider
With more consumers coming to the closing table with some version of a cryptocurrency, it’s important for title and settlement companies to have policies and procedures in place to handle these transactions.
Alan Fields, director of underwriting for WFG National Title Insurance Co., said the first question a title company must ask is about the type of transfer. The deal could either require the conversion of the Bitcoin to cash or be a Bitcoin-for-Bitcoin land exchange between the buyer and seller.
If the buyer has Bitcoin, but the seller wants cash, Fields said the transaction is no different than a “normal” transaction. As title professionals, we are not concerned with what legal assets—stock, bonds, other land, or Bitcoin—may have been sold to generate the funds which are ultimately wired into our trust account. Our concern is receipt of “good funds.”
It gets tricky when it’s a Bitcoin swap for land, because escrow laws in most states say funds must be held by a title agency in a federally-insured account. Currently, there aren’t any insured Bitcoin accounts.
“If you have a buyer that says they want Bitcoin, a seller’s property and a seller that wants Bitcoin, we treat it as a property-for-property swap,” Fields said. “This is how 1031 exchanges were originally handled.”
In this scenario, the title agent will want to make sure the buyer and seller both have a Bitcoin wallet, a software program that “stores” the virtual currency. The sale consideration would be handled between the Bitcoin wallets, and outside of the title agent or escrow officer. The parties would still need to deposit funds for charges and costs that are applicable to the transactions.
Fields encourages title agents to talk with their underwriters if such a deal arises. Although it’s not within the scope of your agency agreement, underwriters are available to help agents work through the special and very detailed escrow agreements unique to a Bitcoin transaction.
An issue with Bitcoin is that its value has been very volatile. After hitting a record high close to $20,000 in December, Bitcoin’s value slipped to just above $6,000 in June. It hovered around $10,000 in March but was fell below $7,500 at the end of March. While the parties can agree on the terms of their Bitcoin for land swap—“I’ll give you 20 Bitcoins for your house”—the title agent is still expected to make various tax and governmental reports. Fields said that the title agent has some responsibility to make sure the agreed value to be reported to the government is “within reason” for the fluctuating values as of the date of closing.
Fields says a title company needs thorough escrow instructions that covers all the variables to protect itself. Instructions should specify that the seller agrees to accept a certain amount in Bitcoin. They should also indicate the Bitcoin wallet to which the currency should be sent.
Additional concerns include:
  • Having enough money in U.S. currency to pay-off loans, pay taxes, releases, payoffs, recording fees and other things that require cash—and, of course, your fees.
  • What value to enter on the federally mandated Closing Disclosure
  • Reporting to FinCEN, the IRS and state tax authorities
Evolving Buyer
Ben Shaoul, president of Magnum Real Estate Group, said the buyer has evolved. They are now younger and want to pay in various ways.
“Cryptocurrency is something that has been asked of us—’Can you take cryptocurrency? Can we pay that way?’” he said. “And of course, when somebody wants to pay you with a different form of payment, you’re going to try to work with them and give them what they want, especially in a very busy real estate market.”
Shaoul was among the first to adopt Bitcoin for commercial real estate transactions. He recently developed hipster condos that he allows buyers to purchase using Bitcoin. In the hopes of attracting younger tenants, Development company Brookliv accepts Bitcoin rental payments for its brownstones. Beverly Hills-based Hubilu Venture Corp. accepts Bitcoin rental for apartments it acquired near the University of Southern California.
A little over a year ago—in a first for Southern California—a buyer used roughly 3,300 Bitcoins to buy a Cape Cod-style mansion in Manhattan Beach for $3.225 million. Had the buyer waited until later in the year, that same number of Bitcoin could’ve bought multiple beach houses, a few penthouse condos and a private island in the Caribbean.
Sites like Open Listings are making it easier to find properties you can purchase with Bitcoin with a search tool that allows you to look for the words “Bitcoin” or “Ethereum.” Experts warn that buying real estate with Bitcoin won’t be simple in every case. Open Listing notes, “Even if you are able to find a seller that’s willing to accept your offer in Bitcoin, it can be tricky to find title insurance and escrow companies who feel comfortable handling virtual currency transactions. To take on your home purchase, they may require you to cash out your Bitcoin so that your transaction can be treated more like a traditional house purchase.”
Ethereum is another digital currency that could disrupt the real estate industry. Ethereum is known for its “smart contracts” that are written on the Ethereum blockchain—the technology behind the cryptocurrency. Ethereum is the second-most-adopted cryptocurrency after Bitcoin, according to Joel Leslie—co-founder and partner of Propify, a blockchain-based real estate marketing solution platform. Unlike Bitcoin, when investors use Ethereum to purchase property, they can stipulate things within the smart contract that are binding and enacted as soon as buyers pay up.
For example, Leslie said sellers can stipulate Ethereum coins are to be transferred immediately following the transaction, and it will happen instantly.
“The evolution of cryptocurrencies will be exciting to see as time goes on,” Shaoul said. “Much like the Internet, we are seeing more of a commonality with just how important cryptocurrency is in the world, rather than without.”


Jeremy Yohe is vice president of communications for ALTA. He can be reached at jyohe@alta.org.


For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow AT vested.com
@vestedland
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