Question: I just leased a duplex unit. Yesterday, a neighbor told me that it had been a meth lab, and that the tenants' van exploded, burning the street. The landlord didn't tell us. When we complained of cat odor, he said he'd check and the next time we spoke, he "admitted" there had been two cats there who had a litter box in the basement. What do we do now?
Answer: Is what the neighbor said true? If yes, no one wants a meth lab in the neighborhood. It's illegal and the possibility of fire or explosion is serious. However, the meth lab is gone -- as are the former tenants and their cats and car.
As to the cats, call the local health department. A landlord has an obligation to provide housing which is clean, safe and habitable. Ask if the property is up to code. Be aware that cats are sometimes used to cover-up meth lab odors. Also be aware that an extensive rehabbing may be required before the property can be occupied.
Question: My children and I recently had to move out of our lease/purchase home after only five months due to serious mold contamination. The cost for mold repairs was estimated to be around $50,000.
The sellers of the home felt they had already put in enough money and refused to make repairs of the five water leaks. Once we moved out they re-listed the house. What is their responsibility to disclose this issue?
Answer: The problem here is not mold -- it's the leaks. Fix the leaks and much of the mold problem will be resolved. As with first question above, the owners have an obligation to furnish a safe, clean and habitable property.
Before you moved out it would have been a useful idea to contact the local building or health inspector to see if the property was up to code. It's important to understand that, like gravity, mold is everywhere. It is not possible to have a mold-free property. As well, mold in the usual case is not a problem for most people. However, there are individuals who are acutely bothered by mold and for them mold is a serious health matter. If you have been bothered by mold you should check with a physician.
Question: We are buying a lot in a subdivision and discovered that a neighbor has cleared a substantial portion of our lot before closing. What retribution, if any, is available to me as the buyer? Or is there something the seller should do before we close?
Answer: The seller typically has an obligation to deliver a property at closing in substantially the same condition as when a contract was signed. Please have an attorney review your purchase agreement. An "adjustment" may be due. If the problem is significant, ask if you are required to complete the agreement.
This is still another example of why both sellers and buyers should make a photo record of the property at the time the agreement is signed and at the walk-through. It's tough to tell a judge the trees are gone, it's easy to illustrate the extent of the problem with photos.
Question: I bid on a house over the Internet. I had never seen the house. I only bid on it based on what was advertised. Now I have to send the biding company about $3,500 as a deposit. I did not know that the deal was to be like. They say if I do not send the money, my credit card will be charged a fee of $600. Should I send the required deposit or should I let go of this deal? Should I let them charge me the $600 or should I call my credit card company and tell them not to honor the charge?
Answer: When you bid for a property at an auction, whether online or off, the seller has a reasonable expectation that would-be buyers will make good on their bids. If the bid offer is not completed, it means that the seller may have to re-sell the property -- and that is a cost. The $600 may well be liquidating damages.
No one knows whether you should buy the property, not buy the property or pay the $600. Like you, we have not seen the property and have no idea what it might be worth.
Please have an attorney review such documentation as you may have and get specific advice. As well, never bid on a property sight unseen, whether offered on the Internet or off. If you want to purchase real estate, work with a buyer broker, attorney or both.
Question: Why are people worried about option ARMs? Are not monthly increases limited to 7.5 percent annually?
Answer: Please review your loan documents carefully. They likely say two things: First, monthly payments adjust annually and can only rise 7.5 percent. However, a lender may also have the right to "recast" a loan that allows negative amortization -- meaning the right to change the payment schedule every few years so that the loan is self-amortizing over the balance of the mortgage term. The new payment required when a loan is recast can be considerably higher than a 7.5 percent increase.
So yes, folks are right to worry.
Question: I'm 28 years old and a fireman. I bought a townhome for $265,000 two years ago and one last week for $560,000. I'll rent out the first one, but what do you think of my current real estate situation?
Answer: As I read your note you have two properties that are now worth more than $1.1 million. You have $300,000 or so in equity with the first home.
You will now rent out the first property. Will the rent cover the mortgage? What if you have a vacancy? By any chance, have you used adjustable-rate financing? If so, what happens if rates rise?
Few homes have doubled in value in two years -- you have been enormously lucky with the first property. At this point it might be good to sit down with an accountant or financial planner to review the specifics of your situation.
Question: I was speaking with a friend on an Internet forum and he was telling me land in a given area is worth a million dollars per acre. I find this hard to believe even though I have a two-acre lot in the area. How can I confirm local land prices?
Answer: Speak with neighborhood real estate brokers such as those who post local market condition reports with Realty Times.
Question: I have had good credit up until moving and bills getting sent to the wrong address and thus resulting in a few late payments.
Now I need to rent an apartment and was wondering if I could rent one on the basis of my salary and the fact I have never been late with rent from past landlords. Also, I will have a letter from the person I am renting from saying I have paid all rent on time. I have a very good salary. Also, could I possibly get someone to co-sign for me? What are my odds of renting an apartment?
Answer: That mail was sent to a wrong address is not your fault. Moreover, only items at least 30 days late are reported by credit agencies -- though bills should always be paid in full and on time because other problems can result from late payments.
A good credit history, a solid salary, a reasonable explanation of any recorded late payments and a letter from the past landlord should allow you to readily get an apartment.
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