Ask Realty Times - June 10, 2005
by Peter G. Miller
Question: My neighbor has a fence that crosses about two feet onto my property and runs that way for about ten feet. I was told by the owner, before I bought, that the fence "might cross onto my property." The property line was not clearly staked. A year ago I had the property surveyed and the fence indeed crosses. I have lived here two years. The neighbors are private and we do not talk. What are my rights? Is there a time limit before the property becomes theirs? Answer: What you may have is an "easement by prescription;" that is, the use of your land without permission by someone else. There are a variety of standards to establish such an easement, but one thing is clear: If you don't object then over time your neighbor may gain a permanent right to use the property. You need to speak with an attorney. One question to ask is how long the fence has been in place. Most likely a letter from your lawyer, sent by certified mail with a return receipt, will resolve the matter. Question: I just listed a small antique Cape Cod, circa 1800. It has three bedrooms and a 1,000-gallon septic, but the only thing the town has is a recent tax card saying it's a two-bedroom property. How can I market this to get the three bedroom audience? Answer: You could ask the local government assessor to come out and look at the property. Also, check the definition for a "bedroom" -- local building code standards may help. Question: My daughter bought a condo. The termite inspection was done and passed in December 2004. In March of 2005 the termite inspector came back only to tell her the house has dry wood termites. The flooring in her bathroom is new and that's where the holes were found. The termite company just wants to be responsible for putting some chemical into the holes. I am concerned that there might be some pre-existing problems under that floor. I would prefer the flooring to be pulled up to see what I have, but the termite company does not want to pay for that. Does it go back to the seller? Answer: Perhaps agree with the termite company that you'll pay for opening the floor -- but they'll pay for putting it back if termites are found. Also, as you have a condo, is there a chance that this is a multi-unit problem and therefore a cost the condo association should underwrite? Question: We own two one-story triplexes and a two-story duplex. We have a good cushion of money in the bank. We are good landlords and our units are in good condition. Our only concern is if there is a major earthquake. Could a tenant sue us if there was a natural disaster and they were hurt while in one of our units? How can we limit our liability? Answer: You have an obligation to provide clean and habitable quarters for your tenants. But no one, even landlords, can provide absolute protection against acts of nature. There are some steps to consider: First, see what insurance is available or if you have liability cover under current policies. (There may not be coverage because an earthquake is an act of nature.) Second, see what policies may be available for tenants. Tenants should at least have renter's coverage as a condition of the lease. Question: Let's say an individual who is neither a broker nor an owner has advertised a house for sale. He has found two potential buyers for the house, and wishes to receive a referral fee from the listing broker. Is this legal? If not how could it be structured to be legal? Answer: State licensure rules typically provide that brokers can only pay referral fees to salespeople and associate brokers who work under their authority and to other licensed brokers. Seen another way, referral fees cannot be paid to those without a license. Did a broker ask you to advertise the properties? If not, why is any payment due? Question: We recently signed a contract on a house. The house was marketed with 2,600 sq. ft. and based on that information we agreed to the listing price and signed the contract. After appraisal we discovered that the house is only 2,300 sq. ft. I checked the county records and they also have 2,300 finished sq. ft. What are my options. Answer: If the appraisal showed a much smaller house, was the appraised value sufficient to finance the house at the asking price? One question to consider is how square footage was calculated. Unfortunately, there is no standard measure -- Protocol Z765-2003 of the American National Standards Institute (ANSI) shows one way to calculate square footage -- but this standard is voluntary. The sellers and their broker should be able to show how their square footage figure was calculated. If that is not satisfactory, then show the sale agreement and all marketing materials to an attorney to see if there are grounds for complaint. Question: Due to the lack of inventory and today's high housing prices, many properties now on the market need work. How do the rules differ when buying a fixer-upper versus an average home? Answer: I'm not sure that the rules differ at all -- but the extent of the rules may be very different. I view home sales as having several costs: the expense of acquisition, the cost to fix-up and the cost to maintain. With a home in good condition, it may be worthwhile to make a higher offer than one would make for a like property that requires extensive fix-up and repair. Question: If a building is donated to an organization for use by disabled individuals, can it be sold at some later point by the organization's board of directors? Answer: One would have to look at the precise terms of the donation. It may be that if the building is not used for a given purpose that it will revert back to the donor or the donor's heirs. That said, the board may have good reason to sell. For instance, they may be able to acquire a better property for use by the disabled. They may be able to expand services to the disabled with the proceeds from the sale. They may be able to avoid large repair and maintenance bills, etc. In effect, each situation is unique. Question: I have been told several times that when a seller pays points to help a buyer purchase a home, that the points are deductible to the seller as a marketing cost and also deductible to the buyer as interest. Later, when the property is sold, the buyer then adds the value of the points to the profit. Is this correct? Answer: Generally yes -- but there are a number of tests. For details, see IRS Publication 530: Tax Information for First-Time Homeowners.
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