Question (AZ): I am looking at a home in a planned community with an HOA. I read in the HOA's guidelines that metal roll shutters are not allowed. This home has metal roll shutters. The owner said the developer approved them. However, nobody has paperwork on the approval. Can I as the new owner be required to remove them since the HOA's guidelines do not allow them at this time?

Answer: We assume that you are only looking at this home, and have not entered into a purchase agreement. The only way we can see that you could purchase this home without the contingent liability of having to replace the disallowed metal roll shutters, is if you can secure a written permission from the HOA Board of Directors after your request has been reviewed by the HOA's attorney. The rules of the HOA exist for a reason and such rules are not to be violated unless those legally in charge of their enforcement have granted a written waiver specific to the subject property.

Question (FL): I have full power of attorney for my father who is not available in the U.S. to handle the transaction himself. I found a buyer via an agent and they made an offer. I signed and accepted the offer in the name of my dad. It is scheduled to close in a few weeks and now my father wants to change the deal or he won't close. The buyers are upset and I am too. What recourse do the buyers have? Can they sue for Specific Performance and force my dad to sell the house at the given price? Will they win? Can they include damages?

Answer: First, since the closing is scheduled in a few weeks, you should consult an attorney who can look at your Power of Attorney ("POA") and advise you as to the answers to your questions. You state you have a "full power of attorney" for your father, but that does not tell us much about the POA. Powers of Attorney can be General Powers that are very broad, or Specific Powers that are focused upon a specific act. They can be financial POAs to handle financial matters, such as the purchase or sale of real estate. The POA can also be a Durable Power of Attorney which can either be for medical purposes or financial purposes.

The POA generally speaks to whether or not, and under what conditions, it can be revoked by the principal (your father in this case) so that the agent (you as the attorney in fact) has no further capacity to act as the agent of the principal. However, the POA should be reviewed by a Florida attorney to advise you and your father as to the Florida real estate contract.

Just a note in closing, it seems to us that there might be some missing facts here. For example, why is your father having second thoughts?

Question (NY): I am selling my home and the buyer has asked for a seller's concession. My question is, "Will the additional sum allotted for the concession have an effect on the capital gains tax I will be paying at closing?"

Answer: Generally, you will not pay Capital Gains Tax at the closing of your real estate transaction. It is paid, but only if it is owed and payable, when you file your 2006 tax returns. Since you are selling your principal residence you may qualify for a capital gains tax exemption equal to $250,000.00 if you are single, or $500,000.00 if you are married and filing jointly. We recommend that you read Internal Revenue Service Publication 523 and Publication 544.

There are very specific methods for calculating how much of the proceeds from the sale of your property are taxable, and whether or not the proceeds qualify as being ordinary income, short term capital gains, or long term capital gains and, of course, whether you have any capital gains tax at all based upon the formula for determining acquisition cost, allowable expenses, allowable additions to your capitalized cost and allowable selling expenses (one of which may be the seller concessions you mentioned in your email to us).

Bottom line, seek professional advice from a CPA, Enrolled Agent, Financial Planner, or other knowledgeable professional who will keep your complete financial picture in mind when providing answers to such questions.

Question (WI): I am considering purchasing a model home. The list price is $299,000. It has been a model for at least 2 years. Is there a standard or an industry percent that I can expect to be discounted because of the fact that it is a model?

Answer: We are not aware of an industry discount or any standard used by builders or real estate agents as a discount percent regarding the asking price of model homes.

The asking price for which a builder is willing to sell a new home, even though it may have been used as a model, is negotiable. It is a function of "Supply versus Demand" for that particular home. Supply vs. Demand can be influenced by a whole lot of variables including, without limitation, asking price, perceived quality of construction, functionality of design, interest rates, and other comparable properties for sale.

If you are not represented in a written Buyer Representation Agreement by a Realtor or an attorney, then we suggest you make a written offer to the builder's sales representative for what you believe to be a fair offer and then have an attorney review your offer before you sign the offer. Do hire a competent real estate Inspector to inspect the home regardless of the fact that it may be new construction.

Published: October 10, 2006

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George Stephens, CRB is the Broker of ERA Stephens Properties. He is licensed as a mortgage broker in Texas, and a real estate broker in Texas, Georgia, and Massachusetts. Charles J. Jacobus, JD is Board Certified by the Texas Board of Legal Specialization in Residential and Commercial Real Estate Law, and the author of Texas Real Estate Law, and Texas Real Estate, both published by Thomson Publishing. He also teaches at Champions School of Real Estate, Houston Community College, and is an adjunct professor at the University of Houston Law Center. To send us a question visit AskGeorge.net and click the "Ask A Question" button. The answers to questions in this column do not contain legal advice. George and Chuck are co-authors of Texas Real Estate Brokerage and Law of Agency, published by Thomson Publishing. If you wish to obtain legal advice, you should consult your own attorney.