Question: Our coop is on a land lease. I asked the managing agent what happens when my lease expires in 2030 and he just said, "Then it expires." I have the offering plan, bylaws, house rules, and the like but can't find where it states what happens.
Answer: What happens is that at the end of the tenancy you either continue the lease (possibly at a higher annual rent), buy out the landholder or the "improvements" revert back to the owner of the underlying property. The value of your unit could be wiped out if you lose ownership.
You now have 24 years to prepare for the end of the lease. One idea would be to sell now, while the end of the lease is not an issue. Of course, if you sell you will have to disclose that the property is on a land-lease.
As a place to start, why not speak with other unit owners and find out the whole story. For instance, does the coop have an option to buy the property? At what price?
Question: I have a listing with a real estate broker. He has brought me an offer of an option. He told me recently -- a year and a half after I signed the listing -- that if my lawyer has to talk to him alot and takes up his time -- he will bill my lawyer an hourly fee of $200 the first hour and $150 per hour after that. I was not told this before or when I signed the listing agreement.
Answer: A broker is typically paid on the basis of performance -- no sale, no fee. A broker is usually not paid on the basis of an hourly fee unless that cost is spelled out in the listing agreement.
Will your broker also charge to speak with a home inspector? Your lender? The closing agent? When I buy or sell property I expect my brokers to speak with allied professionals, something I see as well within the expected scope of broker obligations.
Please contact your state real estate commission and ask to speak with an investigator. They will be able to explain if your broker's position is consistent with state rules. A list of U.S. and Canadian regulators can be found at ARELLO.com .
Question: What happens when a borrower refinances their home with several acres, then subdivides and sells off part of the property? Does the lender have to approve the deal?
Answer: The property cannot be sold unless it is either refinanced, the loan is paid off or the lender approves the subdivision -- an approval which is sometimes available in exchange for a reduction of the principal balance.
The loan is secured by the entire property. If the property is subdivided then the lender's security is reduced and the terms of the loan contract have been changed. That cannot be done without the lender's approval.
What could make sense is a situation where the owner sells a portion of the property and then pays off the entire loan at closing.
Question: We just purchased our first condo. After being there for two months, we found out that some of the units are slipping from the foundation and that each condo owner may be liable for a $14,000 assessment to cover the costs -- including owners without the problem.
None of this information was disclosed to us at the time of purchase even though all owners received a notice two years ago informing everyone of the problem. I received confirmation of this from neighbors who all talked about the issue.
What can we do?
Answer: It may well be that you did receive notice. Did you read through all the condo documents you received before the sale agreement was finalized? What about the state-mandated disclosures you received from the seller?
Did you have a buyer broker to assist in the transaction? Did you speak with condo officials before purchasing? Did you ask about planned assessments?
You need to ask what disclosures are required in your jurisdiction -- and then see what disclosures were made. A local attorney can provide specifics.
Question: I would like to know if real estate is going to go down or down in the next months to come.
Answer: Me too. I'd like to know if the value of my property will rise or fall. Unfortunately, while my property rises or falls, your property may react differently because of local economic trends.
No one -- not even seers, soothsayers and securities analysts -- knows what will happen in the future. The best approach is to carefully look at your local marketplace and your particular property. Ask -- among other questions -- if the local population and job base are expanding and whether new home construction is keeping up with demand.
Question: We're currently trying to buy a home. We have a purchase agreement which says all the appliances in the home, the washer, dryer, etc. are to stay. We took our parents over to the house today, and looking through the window, we could see the items had been removed, including all appliances, except the dishwasher. What kind of rights do we have in this case?
Answer: You have the right to enforce your agreement. If the property was to be sold with given appliances, and if those appliances were clearly listed in the sale agreement, then the appliances are to stay.
The best way to enforce the agreement is to require compensation for replacement appliances at closing. This means the sellers will get less cash -- but that's not your problem. For details speak with your broker or an attorney.
Question: We're planning to remodel the only bath in our three-bedroom, 1924 Dutch colonial. The bath is approximately 8 x 8 with a tub/shower combination. I would love to have a separate shower and tub, but there isn't room. How do buyers feel about a home with just a large shower and no tub??
Answer: This Sunday visit open houses in your community and see how comparable homes are outfitted. I bet there isn't a single one that's been "up-graded" to remove a bathtub.
You house now has one full bathroom. Modern homes tend to have more, say two to two and a half baths. The view here is that a house without a tub will be less attractive to buyers than the current arrangement -- and thus more difficult to sell. Local brokers can tell you more.
Question: I'm selling a rental property and realize I'll be paying capital gains tax. If I invest some of the profit in a 529 account, will that portion be a write-off at tax time?
Answer: These are independent events. First there is the sale of the property. Separately there is a contribution to the college fund and such write-offs as may be allowed.
Each event is governed by different rules, reporting forms, etc. The bottom line is that income from the sale (even when discounted as a long-term capital gain) will increase potential taxes while more allowable contributions will decrease taxes. For details, speak with a CPA, enrolled agent or a tax attorney.
Question: I have a ten-acre parcel that I would like to put on the market. I was informed, some months back, by an attorney representing the owner of a parcel behind me, that they would like an easement through my property for the use of our road. It gets a little more complicated than that, but if we do not grant him this easement he could be land locked. My question is: How long do I have to wait for them to get back to me in regards to their proposal, or procedure. I would like to sell my property as soon as possible, and I was told by a broker that it would be better to wait until the issue has been resolved. Unfortunately, they seem to be dragging their feet.
Answer: Why is the land-locked parcel your problem? Why do you have to do anything? What are the owners willing to pay for an easement?
A land-locked parcel is useless unless the owners can teleport. Just explain that unless the matter is wrapped up on a schedule satisfactory to you, the owners will have to deal with someone one else as you're selling. Speak with an attorney for details and ask brokers what should be disclosed in your sale materials. Perhaps the land-locked owners would like to buy your property to assure permanent access.
Question: My husband and I sold our property just about one year ago. We had to sell it for $112,000 for the person that bought it be able to finance that amount, or 80 percent, for us to get $100,000 immediately. So, we are carrying the $12,000 second note. We must sell this note ASAP as we must have the cash.
Can you suggest to me how and when to start this process?
Answer: Why did you sell the property to someone who needed you to take back a loan? Why not sell to a qualified buyer who could finance the entire transaction? Loans with little or nothing down are entirely common today. You would have gotten all your money at closing.
As to that note, it may not be salable at the face value. If the interest rate is low you may need to sell at a discount. If the rate is high you may get a premium. Speak with local mortgage brokers for details.
Question: I recently purchased a home. I bought the property after having it inspected in the winter. We closed on April 15th. I was aware through the disclosure that there was moisture in the lower level and was told it was on the cellar floor in spring only this year but that the problem could be fixed with a bigger sump pump. Also, there was no knowledge of prior leakage. In May the lower level was saturated with water coming in through the walls, huge cracks that were covered by carpet. On closer inspection, you can find moisture everywhere now. New carpets are a loss and my children's rooms are inhabitable. What can I do?
Answer: Did you put in the new carpets? If yes, did you see the "huge" cracks? Were there old carpets damaged when you bought? Did they show signs of leakage? Did you notice the house smelled musty? Was there excessive mold in the property?
Disputes about condition are often complex. Is it possible that the local water pattern changed? That the gutters were stopped up or turned? As a start, speak with the home inspector to see what went wrong.
Have a real estate question? Send your inquiry to Ask Realty Times . 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 . For past columns, please press Ask Realty Times .
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.
