Housing news from HousingWire’s weekend desk
Case will resume April 25
There are two vitally important legal battles going on in housing right now that you need to be paying attention to.
One deals with the new housing regulator that rules the block, and the other deals with the two most popular names in online real estate, both game-changers for the industry.
The Consumer Financial Protection Bureau’s battle with PHH questions the authority of the bureau. The hearing is still going on, and looking at the situation so far, it makes us wonder, “Will PHH accomplish the unthinkable against the CFPB?”
The other legal battle making headlines is Move’s lawsuit against Zillow over trade secrets.
Move, which operates Realtor.com for the National Association of Realtors Move and is now owned by News Corp, is mad at Zillow for allegedly poaching one of its top executives and gaining all the top-secret information that he knew. Zillow quickly said, no, all of this is without merit, but not before taking a heavy beating in legal fees with even more to come.
The case finally hit the courtroom last week, and turns out, the story is even more complicated.
From a piece by Richard Morgan in The New York Post, which is owned by News Corp as well:
During a key court hearing this week, Errol Samuelson, a top Zillow exec accused of stealing confidential information from Move Inc., said he deleted documents because he didn’t want anyone to know his medical history — specifically, that he could be at risk of developing a rare and terminal hereditary health condition.
This week’s hearing was over whether Zillow should be sanctioned for destroying evidence that Move says is crucial to its case.
Curt Beardsley, another former Move executive, was also charged for stealing trade secrets, the article noted.
This was his defense. From the article:
Beardsley destroyed a hard drive once connected to Move’s internal network by smashing it against a wall. Frustration motivated the incident, he testified.
He admitted as well to wiping data from two company-issued computers because he said he was trying to cover up his hardcore porn habit.
An article by Todd Bishop in GeekWire, which also covered the case, noted that Zillow CEO Spencer Rascoff denied allegations that the company hired two executives from Move for the purpose of gaining access to the real estate rival’s trade secrets or other confidential information.
If one of the executives had suggested as much during employment discussions, “I would have hung up the phone at that very moment,” Rascoff said.
“Curt made a number of decisions that exhibited bad judgment that I can only describe as knuckle-headed moves, which in the aggregate created the appearance of impropriety,” Rascoff said Wednesday. Rascoff said he learned of the situation from Beardsley’s deposition, noting that the executive was disciplined for “the totality of his actions.”
The evidentiary hearing required more than the four days allotted to it and will resume April 25.
Today is the last day to file taxes, and if you’re wondering why it’s due the 18th and not 15th this year, read this.
Homeowners were probably discouraged this year by the tax break they got from buying a home. According to an article in CNBC by Diana Olick, low mortgage rates and an increase in the standard deduction almost makes tax breaks for homeowners non-existent. The good news is that interest rates are at all-time lows.
The article states:
The standard marital deduction has risen from $1,300 in 1972 to $12,600 today, meaning that the first $12,600 of itemized deductions has no benefit to consumers. According to John Burns of California-based John Burns Real Estate Consulting, a typical first-time homebuyer, financing 95% or less of a median-priced U.S. home (around $200,000) pays less than $12,000 in mortgage interest and property taxes annually. That is not enough to hit the itemization level. Even with other deductions that bring the taxpayer over the $12,600 limit, the tax savings are minimal.
“It’s interesting, nobody is mentioning tax savings as a reason to buy anymore in focus groups,” added Burns.
While solar energy is breaking a lot of ground in housing lately, the reward isn’t paying off for the solar companies. An article from MIT Technology Review by Richard Martin states, solar giant SunEdison is lurching toward bankruptcy due to more than $11 billion in debt, at least one investigation by federal officials and a lawsuit from its own subsidiary
The shares of other leading solar providers, including SolarCity and Sunrun, have lost more than half their value in the last four months as investors lose confidence in the no-money-down, 20-year-lease model that has fueled the explosive growth of the rooftop solar market in the last few years.
Even though Congress has extended the investment tax credit, which provides credits worth 30% of the value of installations, that growth is expected to slow as the developers focus on improving their balance sheets rather than fueling breakneck expansion.
New York City renters are in luck as a wave of new luxury rentals is stoking competition and spurring a flurry of concessions by landlords, according to an article in the New York Times by Michelle Higgins said.
The article stated that more than 20% of rental agreements in the first quarter of 2016 handled by the brokerage firm Citi Habitats included some form of deal sweetener, marking the highest level of concessions in more than five years.
“Increasing concessions in a rental market signals that landlords are having a harder time filling vacancies, making it easier to negotiate,” said Joe Charat, the general manager of Naked Apartments
The article lists eight tips from Higgins on how negotiate your rent. Here’s a preview of one.
Be creative. A landlord who won’t budge on the rent may be willing to waive gym memberships, parking or other costs associated with a rental.