Return to Annual Homestead Declarations
Vermont funds its educational system through a property tax system. The “education tax” is imposed on all homestead and nonresidential property, but at differing rates. The basis for classifying a particular property a homestead (and thus being taxed at a lower rate) is dependent upon the owner filing a “homestead declaration” with the Vermont Department of Taxes.
Effective January 1, 2013, property owners in Vermont will again have to file an annual homestead declaration in order to have their property classified as a homestead for purposes of the statewide education tax. This is actually a return to the system that existed up until 2010, when the Department of Taxes stopped requiring an annual declaration. A homestead declaration filed in 2010 remained valid until the property was sold, the property was no longer the owner’s primary residence or the owner was no longer domiciled in Vermont. When this happened the property owner was expected to file a homestead declaration withdrawal with the Department of Taxes.
The goal was to relieve property owners from having to remember to file the declaration each year. As it turns out, however, property owners are regularly forgetting to file the withdrawal which has apparently caused all kinds of record keeping problems for the Department of Taxes. In response, the Department has decided that a return to an annual filing requirement is in order.
A “homestead” property is statutorily defined as the principal dwelling and parcel of land surrounding the dwelling, owned and occupied by a resident individual as the individual’s domicile. An individual can only have one “homestead”; second homes and camps are generally not considered homesteads. (Camps can qualify only if it is the owner’s principal residence.) Although Vermont law does not require a particular number of days that an individual must occupy the dwelling to qualify as homestead, mere ownership and spending a lot of time at the property is not enough to qualify for homestead status. The individual must be domiciled in Vermont and the house must be occupied as the individual’s principal dwelling. Spouses and civil union partners who own and occupy a residence together need to file only one homestead declaration.
The necessary form, and more information about homestead declarations, can be found at: www.state.vt.us/tax
Vermont Energy Efficiency Standards for residential construction–a potential trap for builders and a cause of action for injured homeowners
In our office, we frequently have clients who have had work done on their homes–new roofs, additions, renovations, and even new construction–and the work is not satisfactory. Homeowners are faced with potentially expensive litigation against the contractor to remedy the wrong done to them. There are legal remedies against a contractor who has not performed his or her job, including claims for breach of contract and consumer fraud claims. However, litigation is expensive, and collecting your judgment may be problematic. For example, the contractor may be operating as a corporation or LLC, and those entities may have no assets from which to collect the judgment. In addition, married couples in Vermont are not liable for any sole debts or liabilities, so if all of your contractor’s assets are held with his or her spouse, those assets are not available to you to satisfy a judgment. Finally, not only is litigation expensive, but there are long delays before your case will be heard. Therefore, it is advisable to do some preventive medicine before the work has begun, so that if the work is substandard, you will have an easier time obtaining compensation for your loss. Here are some things you must do to avoid costly litigation for sub-par work:
1. Have a written agreement prepared and signed by you and the contractor. This agreement should contain specific provisions outlining what services the contractor will perform, and what materials he will purchase. The type and quality of the material and the quality of the service should be included. Verbal agreements are legal, but parties may remember differently what the terms of the agreement are. A clearly written contract will dispel any doubts as to the terms of the agreement.
2. Provisions should be made in the agreement for inspection at regular intervals or when a portion of the project is complete. Depending on the size, cost and type of project, you should consider using a professional inspector.
3. The agreement should also include a time frame for completion, and specific provisions for payment upon completion and inspection of parts or all of the project.
4. The agreement should include specific costs, with provisions for cost overruns only upon your written consent.
5. The agreement should require proof that the skilled workers on the project have appropriate licenses such as a plumber’s or electrician’s license.
6. If you are dealing with a small contractor who has a separate corporation or LLC, the contractor should sign the agreement not only as officer of the corporation, but also personally.
7. This is important: you must require proof of liability insurance that will cover reimbursement to you if the work is substandard or incomplete. Require that the contractor provide you not only with the Insurance declaration page, but the entire policy. You need to make sure the policy covers the contractor’s work, and that there are no exclusions that pertain to your project. For instance, in some some cases the insurance company refuses coverage because the contractor used subcontractors, which were not covered under the policy. Depending on the project, it is advisable to request that the contractor obtain a performance bond.
8. Finally, it is advisable to have an attorney prepare the agreement and review the insurance policy or the performance bond before work begins. This is a good investment to prevent incurring greater attorneys fees in litigation if the contractor breaches the agreement with you.
Remember, a contractor who is willing to sign a clearly written contract providing for safeguards for the homeowner, and who is willing to provide proof of insurance or performance bond coverage will be more likely to do the job right, thus leaving you satisfied.