Drones and Brightwood Trials

Beazer Construction is starting a new phase in Brightwood Trails and if I was the listing agent I would use a drone to take an overhead picture.  The reason is the site is big and the little painted picture of the subdivision really doesn't tell you anything. If any of you are starting to think about using drones in your business here is some information that might come in handy.

What do I need to know about the FAA's new drone rule?

Release Date: 08/23/2016

Bill Gifford, Martin & Gifford, PLLC

QUESTION: I have heard that there is a new federal rule regarding drones that is taking effect soon. What do I need to know about that rule?

ANSWER:  In late June, the Federal Aviation Administration announced a new "Small Unmanned Aircraft Rule" which goes into effect on August 29, 2016. Under that rule, drones weighing less than 55 pounds will be able to be used for commercial purposes without first obtaining a "Section 333 waiver" from the FAA. This change will make it easier for brokers to use drones in the marketing of their real estate listings. However, brokers should know that many federal and state-imposed restrictions remain on the use of drones for commercial purposes.

Under the new rule, a pilot's license will no longer be required to operate a drone. Instead, drone users need only obtain a "Remote Pilot Certificate with a Small UAS Rating". This Certificate is less expensive and less time-consuming to obtain than a traditional pilot's license. To obtain one, a drone user must meet several eligibility requirements, including taking and passing an initial aeronautical knowledge test. The FAA estimates that the cost to obtain a Remote Pilot Certificate will be $150.00.

The new rule includes many restrictions on when and how drones can be used. For example, drones may only be operated during daylight hours. The person operating the controls must be able to see the drone at all times. Drones may not be operated over a person who is not directly participating in the drone operation, unless that person is under a structure or in a vehicle that will provide protection in the event of an accident. The drone's maximum groundspeed is limited to 100 miles per hour. A drone may not be operated more than 400 feet above ground level, unless it is within a 400 feet of a structure.

The new FAA rule does not address any of the privacy issues associated with drone use. However, state law continues to include several prohibitions: under NCGS §15A-300.1 (b)(2), drones may not be used to photograph a person without that person's consent.

An operator permit from the NC Division of Aviation is still required for all commercial drone operations in North Carolina. Details on the permitting process can be found on the NC Department of Transportation's website here.

Mortgage or No Mortgage on Purchase Offer

QUESTION:  In recent months, I have had several transactions where buyers who have represented that they do not have to obtain a new loan in order to purchase the property have later notified me that they will be financing their purchase with some sort of loan. I suspect that each of these buyers intended all along to obtain a new loan, but checked the "does not" box in paragraph 5(a) of the Contract in order to make their offer look more attractive. Is there anything I can do to protect my seller-clients from this tactic?     

ANSWER:  Unless you can prove that a buyer misrepresented whether he or she needed financing, that buyer's subsequent decision to obtain a loan would not give your seller-client the right to terminate a contract. However, we do have a few suggestions. First, we strongly encourage you and your seller-clients to heed the following advice which appears in the note at the end of paragraph 5(a): "If Buyer represents that Buyer does not have to obtain a new loan in order to purchase the Property, Seller is advised,prior to signing this offer, to obtain documentation from Buyer which demonstrates that Buyer will be able to close on the Property without the necessity of obtaining a new loan." If a buyer is able to provide the requested documentation, it is much more likely that he or she will proceed to close without financing, or will at least be able to easily obtain any financing that he or she decides to seek.

You should also consider having an attorney-drafted addendum available that your seller-clients can insist on attaching to the Contract whenever an offer is received with a "no new loan" representation. The addendum could impose fairly serious consequences on any buyers who decide to seek financing after representing that they do not need to do so. For example, the addendum could give the Seller the right to terminate the contract, and retain the Buyer's Earnest Money Deposit, in the event the Buyer seeks financing in connection with the purchase of the Property.

Buyer agents who employ the tactic you describe are cautioned that any buyer who will need to obtain a new loan in order to purchase a property, but represents otherwise, is engaging in conduct which constitutes a breach of contract. Paragraph 1(e) of the Contract states that the Earnest Money Deposit shall be paid to Seller in the event of a breach by Buyer. Furthermore, buyer agents who are aware of intentional misrepresentations being made by their clients are engaging in conduct which violates both North Carolina's Real Estate License Law and Article 1 of the REALTOR® Code of Ethics.