Monday, June 13, 2011 3:15 pm | By Grant Morgan
California has recently surpassed Michigan to become the state with the second-highest unemployment rate, according to a recent report. The Golden State reported a rate of 11.9% for the month of April, down from 12% in March but created a meager 9,000 jobs in the process. Texas, in contrast, created 32,000 new jobs in April, and has contributed 37% of all new jobs created in the United States in the last two years. The contrast in results is matched by a contrast in attitudes towards property rights.
Uncertain of Rights, Entrepreneurs Fleeing China
Tuesday, June 7, 2011 4:30 pm | By Grant Morgan
A study released on Monday reports that a majority of wealthy individuals and entrepreneurs in the People’s Republic of China have considered leaving the country. According to the report, released by the China Merchant Bank and Bain & Co, more than 60% of China’s “High Net Worth” individuals – those with more than 10 Million Yuan net worth – have either considered emigrating or have already initiated the process.
Shining a Light on Home Resale Fees
Tuesday, June 7, 2011 11:46 am | By Kelsey Zahourek
At the height of the housing crash, developers found themselves strapped for cash to build new developments. Over the last few years, a few financial firms rode to the rescue of developers, but with a questionable catch. In exchange for a percentage of the take and other undisclosed benefits, the developers agreed to insert provisions into home sale contracts that required that every time the home is sold for the next 99 years, a percentage of the sale price (usually 1%) would be paid to a third party.
Covenants in home sale contracts are nothing new: for instance, homeowners’ and condo associations frequently levy resale fees on property. However, these fees benefit the property and its value in the form of maintenance, infrastructure and amenity improvements. The transfer fees at issue here do nothing to benefit the property or its rightful owner. In fact, the opposite is true: since these transfer fees are calculated as a percentage of the sale price each time the property is sold for the next 99 years, any improvements made by the original and subsequent homeowners that increases its value further enriches a third party at the expense of homeowners’ equity in the property. Further, a prospective buyer would be remiss not to leverage the home transfer fee as a bargaining chip, thereby reducing the sale price and further decreasing the sellers’ realized equity in his or her own property.
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