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HousingBuying a house Buying a house is a good way to build credit while gaining a property asset. In some cases, buying a house can be as affordable as renting. There are several good reasons to own rather than rent:
Find a real estate broker. A broker (or realtor) is not required but can be very helpful. A broker or realtor is a specialist in real estate purchases and sales who can help you pick out a house, deal with the seller and discuss your options for financing with you. See Resources for the Maine Association of Realtors. Get pre-qualified for a loan. It is a good idea to get pre-qualified for a loan. Pre-qualification is a process that a bank will use to determine how much you may borrow to buy a house. Factors the bank will use include your employment, income and existing debt. Once the bank tells you how much you can borrow, you will know what you can afford. Your realtor can find homes for you to look at in your price range. Save enough money for your earnest money, down payment, and closing costs. You will need enough money available to provide earnest money. Earnest money is the deposit you put down on your home when you make an offer. You will also need enough money for a down payment (the percentage of the cost you agree to pay upon sale). Your earnest money provided will be applied to the down payment required. You will also need money to pay for closing costs. These are costs you pay to process the paperwork to buy your home. Financing. You do not need to pay for a house all at once. Your broker will help you decide what kind of financing will work best for you. There are several ways to finance the purchase of a home. Traditional mortgages. Most people use a fixed rate mortgage, which means that your interest rate will stay the same for the whole length of the loan. If interest rates are particularly high when you mortgage your home you may want to choose an adjustable rate mortgage. This would mean that your interest rate would change as often as twice a year depending on several economic factors. Most traditional mortgages require between ten and twenty percent down. HUD (Housing and Urban Development) Programs. The federal government has some mortgage programs for people who do not have a lot of money for a down payment. You can contact a HUD-funded counseling agency to determine whether you qualify for one of these programs. Maine State Housing Authority (MSHA) Programs. MSHA has programs for first-time home buyers if they have low or moderate incomes. These programs provide lower interest rate financing and lower down payment requirements than banks. Special mortgages like these can mean that you will have to pay as little as five percent down when you buy your house. See Resources, Maine State Housing Authority. Credit. Consumer protection and credit issues are discussed in Monney Matters. Your credit will play a role in obtaining a mortgage. The best way to monitor your credit is by requesting your credit report from one of the credit agencies discussed in Money Matters. Property Conditions. There are several things about a property that you should know before you buy. A real estate broker is required to tell you the truth about these things if you ask questions about them. You should also get a qualified inspector to help you decide if the house is sound. You should ask questions about the following things:
The agreement you make with your landlord will affect your rights. There are two types of agreements: leases and tenancy at will. Leases. You may sign a written agreement called a lease. A lease lists the names of the landlord and tenant, the address of the apartment, the length of the lease, and the day the rent is due. Most leases contain much more than this. Read these "extra conditions" carefully and understand them before you sign. A lease sets out the rules you and your landlord agree to follow. For example, it will probably say whether the landlord can evict you before the lease ends, what reasons he must have, and what kind of notice he must give you. If the landlord is trying to evict you, a judge will look at what your lease says to decide the case. If something in a lease is grossly unfair to you, a judge may say that it can't be used against you. But, usually your rights depend on what the lease says. If you have a written agreement that does not have a "lease term" (a specific amount of time you will be renting), then you have a "rental agreement," not a lease. Our advice to you is the same. Read the agreement and understand it before you sign! Tenancy at Will. If you rent without a lease, you become a "tenant at will." Maine law gives you certain rights. For example, to evict you, your landlord must give you time after a written notice and must get a court order if you are still not out. Read more about this under "Evictions" below. Whether you have a lease, a rental agreement or a tenancy at will, the following rules apply: Security Deposits. A security deposit is money you give to your landlord when you move in. Your landlord can use it to cover any unpaid rent or damages. You may not use your security deposit to cover your last month's rent unless your landlord agrees. There are limits to what your landlord can charge. Your landlord cannot make you pay a security deposit that is more than two times your monthly rent. If you live in subsidized housing, your security deposit should be much less. Check with your housing authority. Return of your deposit. If you owe back rent or you have damaged your apartment, your landlord may deduct those costs from your security deposit. If you owe your landlord more than the amount of your security deposit, he may sue you in court. Your landlord cannot keep your security deposit for "normal wear and tear." Examples of "normal wear and tear" are:
Your landlord must either return all of your security deposit or send you a letter telling you why he is not giving some or all of it back. He must send this letter to your "last known address." Give your landlord your new address, or make sure your mail is being forwarded so that you will get the letter. If you are a tenant at will (no written lease), your landlord must give back the deposit or send you the letter within 21 days after you move out and return the key. If you have a lease, check to see what it says. If there is nothing in the lease about this, or if the lease gives more than 30 days, then your landlord has 30 days to return the deposit. This is the legal limit.
Unsafe or Unfit Housing Your landlord has a duty to make sure your apartment is safe and fit for tenants. If your housing is not safe, there are some remedies for your situation. Landlord's duty. Maine law gives tenants an "implied warranty of habitability." This means that your landlord must promise that your home is safe and fit to live in. Examples of landlord violations:
Step One. Ask your landlord to fix the problem. If he does nothing, you may want to follow up with a written demand. Keep a copy of your letter. Step Two. Call your city hall or town office and ask about any housing codes that may apply to your building. If your town has a building code enforcement officer, you can ask him to look at your home and send the landlord a letter demanding that he fix any serious problems. If there is no building inspector, ask if there is a health inspector to look at your home and contact the landlord. All towns also have local plumbing inspectors. Step Three. If you cannot get local help, you may be able to get some help from one of the state agencies listed offices. Fire hazards: State Fire Marshall's Office Licensing and Inspection Unit TTY: 287-3659 Electrical wiring problems: Senior Electrical Inspector 624-8640 Plumbing: Examining Board 624-8640 Lead paint. You can be tested or have your children tested for lead. Ask your family doctor or clinic about lead tests. If your child's test shows a high level of lead, the lab will tell the Childhood Lead Poisoning Prevention Program in Augusta. They can inspect your home for free and order your landlord to remove the lead. If you want to have the paint in your home checked for lead, ask your landlord for help or call the Health and Environmental Testing Laboratory at 287-2727 and ask for the Environmental Lead Lab. They will tell you how to have your paint tested for lead. They can also test for lead in dust or soil where your child plays. This test costs about $10.00. For more information contact:
Many people are confused about whether a landlord has to have a reason to evict you. The answer depends on whether you are a tenant at will or have a written lease. If you have a written lease or live in subsidized housing or own your own home in a mobile home park, your landlord probably has to have a reason to evict you. If you are a tenant at will (no lease) and you do not live in your own home in a mobile home park, your landlord can evict you without giving a reason. However, he must give you 30 days notice in writing. There are some exceptions to this, explained below. Prior notice. In almost all cases, your landlord must notify you in writing before taking you to Court to get an eviction order. The type of notice he must give depends on what type of tenancy you have. If you don't move out after this notice expires, your landlord must go to court to evict you! If you do not move out by the end of the notice period, then your landlord can have you served with court papers. The court case is called a "Forcible Entry and Detainer." (This does not mean that the landlord can enter your home by force or detain you.) The papers say that he is trying to evict you. They ask the court to hold a hearing to decide if you can be evicted. If you want to fight the eviction, you have a right to be heard in court. A landlord cannot legally evict you without a court order. Here is what will happen:
If you owe the landlord money for rent or damages, he cannot get a court order for this at the eviction hearing. He can only ask for an eviction order. He can sue you later, if he wants to, for any money you owe him. Illegal eviction. It is illegal for your landlord to throw you out by force. Your landlord must get a court order before he evicts you. If your landlord tries get around this by changing the locks, taking your property, or shutting off any of your utilities he has broken the law. If you take him to court and ask for immediate help, the court may stop the landlord and order him to pay you for your losses or $250.00, whichever is greater, and your court costs. If you have a lawyer and you win, the court can also order your landlord to pay your attorney fees. Landlord Entering Your Home. If your landlord wants to come into your home to make non-emergency repairs or to show or inspect the apartment, she must give you "reasonable notice." Normally, this means at least 24 hours notice. Your landlord can come in only at "reasonable times." Generally, this means during the daytime or evening, not in the middle of the night. There may be other factors that make certain times "unreasonable" for you. Exception: If there is an emergency, your landlord can enter after a shorter notice or without notice. For example, the pipes burst or there is a fire in your apartment. If your landlord does not follow these rules, or if your landlord tries to come in without good reason to the point you feel harassed, you can sue your landlord. The judge can order your landlord to pay you for your "actual damages" or $100.00, whichever is more. She can also order the landlord to stop coming into your apartment without good reason and without fair notice. If you have a lawyer and you win a hearing, the court can also order your landlord to pay your lawyer fees. If you cannot get a lawyer and if you need fast protection from serious, repeated harassment, you can file a Protection from Harassment complaint in District Court. Call Pine Tree Legal if you want more information about how to do this. Changing the locks. If you need to change your locks for any reason, you must notify your landlord. Also, you must give him a key within 48 hours of the change. Your landlord may give you an eviction notice if you change the locks without following these rules. He can also charge you for any damage caused, if he needs to enter in an emergency and is locked out. Subsidized Housing. If a housing authority or other agency pays all of part of your rent, your housing is "subsidized" by the government. Your rent may be subsidized even if your house or apartment is owned by a private landlord. This is usually a "section 8" or "voucher" subsidy. "Public housing" is also subsidized. (See Resources.) If you live in "subsidized housing," you should have a standard lease. This lease gives you more protections than most non-subsidized tenants have. For example, your lease may have a "grievance procedure" which gives you the right to an informal, out-of-court hearing on a complaint you have against your landlord. Your lease probably gives you more protections against eviction than the ones described in this handbook. It may say that your landlord cannot evict you unless he has "good cause" or unless he can prove you broke the lease. You also have rights under federal law that may not be explained in your lease. Different subsidized housing programs have different rules and different form leases.Read your lease! If you are not sure of your rights under your lease or if you are being evicted from subsidized housing, contact your local Pine Tree Legal office. Mobile Home Parks. If you rent a lot or a home in a mobile home park, many of the rules described above apply to you, but some rules are different. You can find out more about your rights in a mobile home park from Pine Tree Legal Assistance or the Attorney General's office. Resources: General: Pine Tree Legal Assistance 88 Federal St. P.O. Box 547 Portland, ME 044112 (207) 774-8211 TTY (207) 828-2308 61 Maine St. Bangor, ME 04401 (207) 942-8241 TTY (207) 942-1060 Augusta office: (207) 622-4731, TTY (207) 623-7770 Presque Isle office: (207) 765-4349, TTY (207) 764-2455 Machias office: (207) 255-8656, TTY (207) 255-6179 Lewiston office: (207) 784-1558 Realtors: Maine Association of Realtors 19 Community Dr. Augusta, ME 04330 (207) 622-7501. Discrimination: Maine Human Rights Commission 51 State House Station Augusta, Maine 04333-0051 phone: 624-6050 TTY: 624-6064 HUD Fair Housing Office 10 Causeway Street, Room 321 Boston, MA 02222-1092 phone: 1-617-994-8300 or toll free: 1-800-827-5005 TTY:1-617-565-5453 Subsidized housing: Maine State Housing Authority 89 State House Station Augusta, Maine 04330 toll free phone: 1-800-452-4668 TTY: 1-800-452-4603 County-by county list of subsidized housing projects in Maine www.mainehousing.org/subshsg.html Rights of Tenants in Maine www.ptla.org/cliented/tenants.htm Consumer Rights When You Live in a Mobile Home http://www.maine.gov/ag/index.php?r=clg&s=chap15 Fair Housing: Your Right to Rent or Own a Home (also available in Spanish, Somali, Arabic and Chinese) http://www.ptla.org/ptlasite/cliented/fairhousing.htm |
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