Question: I recently met a person that I knew as a kid, only to find that he/she got mixed up with the wrong people and made some bad choices. These choices had to do with drugs. He/she has paid restitution and spent prison time. How can he/she get back to what he/she knows best and loves to do, that being selling real estate?

Answer: Real estate license applications typically ask if an individual has been convicted of a felony. Those answering "yes" will then have their application reviewed by state real estate regulators. The question, of course, must be answer truthfully.

Does a prior felony conviction bar someone from real estate licensure for life?

Not necessarily. As a country we tend to believe in forgiveness and redemption. While state rules differ, regulators will look at such issues as the type of crime, the amount of time that has passed since the conviction, public safety and whether the conduct was related to real estate or mortgage financing.

The best approach is probably to have your friend or your friend's attorney write a letter to the state real estate commission or department asking for a review of this matter prior to application, explaining the circumstances of the crime, the punishment and discussing the individual's history since his or her release from prison. Supporting letters from friends and employers would help. In other words get the complete story out in the best possible (and truthful) light. A positive response from state regulators can then be attached to a license application.

Question: How can I protect myself in a sale agreement if my tenants do not want to move? I will not be able to close if they decide not to vacate the property even with a 30-day notice?

Answer: Unless there is a clause to the contrary, the rental continues under the terms established in the lease.

If you have tenants on a property and wish to sell, you must plan ahead.

• Is there a lease on the property? If yes, how much time remains?

• Is the property now rented on a month-to-month basis with a lease? If yes, when are you required to give notice to vacate?

• Do the tenants want to stay or leave? Sometimes tenants welcome the opportunity to leave before the end of a lease term. If the tenants will leave early, get a lease modification in writing.

• Could the tenants be encouraged to leave with the provision of a "moving" allowance?

• Do you live in an area with rent control? If yes, what specific rules apply?

Question: I own a house and my father is the second lienholder. I put the house up for sale and we found a buyer. Now my father does not want to sell the house and said he will not be present at the closing. I do not want to sell the house and I believe I cannot sell it without my father's consent. I understand that I must pay the buyer's inspection fee. What am I liable for and do I need to pay my broker or the buyer's broker?

Answer: Your father is a second lienholder. That means he is owed money which is secured by the property.

But, is your father also on the title as an owner? If not, why do you need his approval to sell?

A "listing agreement" can be seen as a performance contract. A broker is only paid when a "ready, willing and able" purchaser who has met all terms of the listing agreement or terms which are otherwise acceptable to you has been found.

Your broker apparently sold the property as directed but you have now elected not to sell. This means the broker did the work he was required to perform. Does the listing agreement provide for a resolution if you do not want to sell? Is it possible that the broker would accept less than a full commission, say advertising costs and some compensation?

As to the buyer broker, he or she may also be entitled to compensation, depending on the terms of the buyer brokerage agreement.

Lastly, there is the buyer. Does your sale agreement have a clause for damages? Will he or she seek monetary damages or "specific performance" -- that is, ask a court to enforce the sale agreement and force you to sell?

Has your father reviewed these issues and their potential cost? When you sit down with an attorney -- which you must do immediately -- bring your father along, perhaps he would be willing to re-consider when he sees the dollars which may be required to resolve this matter.

Question: I purchased a four-unit apartment a little over a year ago that has also been my primary residence. I received more favorable terms on my mortgage because one unit was to be used as my home. I'm now considering purchasing a home and wish to keep the apartment as an investment property. Will this affect my existing mortgage on the apartment, as it will no longer be my primary residence?

Answer: Lenders make residential, owner-occupant loans and loans to investors. Investor loans are regarded as more risky so they have higher rates and tougher terms.

At the time when you applied for a mortgage you were asked if you "intended" to live at the property. By saying "yes" you could purchase property with one to four units and low-rate residential financing as long as you lived in one of the units.

Did you move into the property after closing? Yes. Did the property serve as your principle residence? Yes. Are you required to live there for the entire loan term? No.

So how long is a buyer required to stay? There is no absolute answer. Suppose a buyer bought a home, moved in and three months later their job was transferred 1,200 miles away and they were forced to move? Leaving the property and perhaps renting seems understandable in such circumstances.

But what if a buyer didn't move in? Or what if a buyer moved out a week after closing to buy another investment property? With such circumstances lenders would likely want their money back and some might allege fraud.

Plans change. People move. You lived at the property for more than a year. Is there a mortgage clause requiring you to physically live on the property for so many months or years? The situation you describe seems well within the realm of reason. It seems unlikely that lenders will be distressed, especially if all loan payments have been timely and full -- and stay that way.

Have a real estate question? Send your inquiry to . Because of the volume of mail received, Mr. Miller cannot respond to questions individually or privately. Published letters may be edited for space and style. For comments regarding other Realty Times articles, please contact individual authors by pressing here.

This column is designed to provide accurate and authoritative information in regard to the subject matter covered. It is made available with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal services or other expert assistance is required, the services of a competent professional person should be sought.

Published: December 19, 2003

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