TEAM MEETING w/Jeff Prang LA County Assesor
For internal use only
Download the Team Meeting & Jeff Prangs Presentation
Key Updates for Real Estate Agents
Prop 19, BRBC Agreement, and Best Practices for Property Transactions
This week’s session with LA County Assessor Jeff focused on crucial updates for real estate agents, especially around property taxes and new regulations affecting transactions. Jeff clarified the impact of Proposition 19, which allows homeowners over 55 to transfer their tax base but places new restrictions on inherited properties. Additionally, the implementation of the Buyer Representation and Broker Compensation (BRBC) Agreement is now mandatory, requiring agents to present and negotiate compensation terms with clients upfront. Open house protocols have also been updated with the "Ohana" form, ensuring clear representation disclosure. Agents are encouraged to adopt best practices to remain compliant and transparent in transactions.
Top 5 Takeaways
Proposition 19 impacts property tax transfers and inheritance rules.
The BRBC agreement is now required for buyer representation.
Open house protocols mandate visitor non-agency disclosure (Ohana form).
Reassessment only occurs upon transfer or new construction.
New office forms must be used for listings pre- and post-July 24 2024.
5 Best Practices
Always present and explain the BRBC to buyers during consultations.
Utilize the Ohana form for open house visitors to clarify representation.
Stay informed on Prop 19 to advise clients on tax transfer and inheritance rules.
Use the DM-LA and MLSA forms for pre- and post-July 24 2024 listings.
Keep communication transparent about compensation terms with buyers and sellers.
Top 10 FAQs
1. What is Prop 19, and how does it impact property taxes?
Prop 19 allows homeowners 55+ or those who are disabled or victims of natural disasters to transfer their property tax base to a new home. However, it also limits tax exemptions on inherited properties, requiring heirs to live in the inherited home to avoid reassessment.
2. What is the BRBC agreement?
The Buyer Representation and Broker Compensation (BRBC) agreement outlines the services a real estate agent provides and the compensation they receive from the buyer for those services.
3. Can buyers negotiate the compensation amount in the BRBC agreement?
Yes, the compensation amount is negotiable between the buyer and their agent. It’s recommended to set a reasonable percentage and negotiate based on the specific transaction.
4. Is it mandatory to sign the BRBC for buyer representation?
Yes, to ensure transparency and legal protection, buyers must sign the BRBC agreement for the agent to represent them and negotiate compensation.
5. How does Prop 19 affect inherited properties?
Under Prop 19, only properties where heirs live full-time as their primary residence can avoid property tax reassessment. Other inherited properties, like rentals, are subject to reassessment at market value.
6. How do you explain the BRBC agreement to clients?
The BRBC agreement ensures clear communication about the services provided and the compensation arrangement. Explain that this agreement protects both parties by outlining expectations and fees upfront.
7. What happens if the seller refuses to pay the buyer's agent commission?
If the seller doesn’t agree to pay the buyer’s agent commission, the buyer is responsible for compensating their agent, as outlined in the BRBC agreement. However, the agent can negotiate concessions to cover these costs.
8. Can buyers use concessions to cover agent fees?
Yes, buyers can negotiate with the seller to cover agent fees through seller concessions, which can be applied to closing costs, including the buyer's agent compensation.
9. What are the penalties for not notifying the assessor’s office of a property owner’s death?
Heirs are required to notify the assessor within 150 days of the property owner's death. Failure to do so may result in penalties, including supplemental taxes and potential reassessment.
10. How does the 2% annual cap under Prop 13 work?
Prop 13 limits property tax increases to 2% annually based on the original purchase price, unless there’s a change in ownership or significant new construction that triggers reassessment.
