Q. I bought my house 17 years ago and am doing some remodeling. Now city inspector says I need to get permit for windows that were in the house when I purchased it 17 years ago. Is that legal?
A. While I am not a city inspector, or attorney, nor do I have any affiliation with the building trade, I’m all for inspectors calling out any items that were put in “not to code” that are health and safety risks. Codes exist for a reason, and are not arbitrary. What’s more, they improve the value of homes, and therefore neighborhoods, which is good for all.
When it comes to windows in particular, sliding doors have been an ongoing hazard with non-tempered glass. Since you don’t specify why your windows were called out, that may be one item. Another is dual glazing, the code for which has changed to meet energy efficiency guidelines. This will be a benefit to both the environment and your wallet in the long run, due to fuel savings.
What the real estate business has done to protect buyers like you is to enforce mandatory disclosure on the part of the seller for non permitted items that exist at time of sale. Unfortunately, 17 years ago when you purchased, those disclosure requirements were not in place. Had they been, you could go back to the seller if you were still within a reasonable amount of time, and request that they repair the items for you.
In your case, if you are doing other work on your property that requires building inspectors to be present, then yes, they can, and often do, call out non permitted work, and require its repair.
Q. Last month I bought a condo in a 10 unit building. My unit came with 2 parking spots (tandem). The agent showed me one set of spaces, but in reality, they turned out not to be mine. Unfortunately for me, the HOA has placed the building’s dumpster in my top tandem parking spot. With the layout of the garage, I can see how it is the only realistic place for it, however I don’t see why I should have to lose my other parking spot for it.
A. Here are my thoughts on your situation. Parking is a commodity in this city, and a value added at the time of purchase or resale, and this situation should have been properly disclosed to you during escrow.
First, pull out your purchase documents. Unless you bought an REO property, you will have received a disclosure from the seller called the “Real Estate Transfer Disclosure Statement” (TDS), which is a statutorily mandated disclosure that retail sellers are required to provide. Please consult that form and see item C2, page 2, which asks if there any common features whose use or responsibility for maintenance impacts your property. The seller should have provided the information there, and given you a full description below when they answered “yes” to that question. The seller has liability toward you.
Second, in your CCR’s, if the parking spaces are deeded to you, you will find a full description therein. If the agent, or agent’s representative, showed you the wrong spaces, you have an issue with them as well. (This is why it is necessary to READ the CCR’s, and be clear about deeded vs. assigned spaces, and what power the HOA has over the spaces.)
Ultimately, though, this is your home, and you want resolution. There are many diplomatic solutions, (contact the HOA, write a letter to the board, contact the agent, etc.) and you need to see which one fits you best. But you MUST resolve this, getting TWO parking spaces back, because even if you can live with this during your tenancy, it will be EXTREMELY hard to sell the condo this way, and you will HAVE to disclose it when you sell. (see above!)
So ultimately, my advice is, be nice, then be firm, then get a lawyer if necessary, but get your unimpeded spaces back.
Q. I heard that the drawback to a short sale is “forgiveness of debt”, and that it is taxable as income. How does that work?
A. When a lender decides to forgive all or a portion of a borrower’s debt, (such as in a short sale or deed in lieu of foreclosure) the forgiven amount is considered as income for the borrower and is liable to be taxed. It used to be that you owed income tax on any forgiveness of debt. Due to recent laws enacted during the financial crisis, in most cases, a short sale will usually not cause you to owe income tax.
There are two circumstances in which you can qualify to short sell a property without any tax liability.
Short Sale of a Primary Residence. The Mortgage Forgiveness Debt Relief Act of 2007 (and it’s extension in the 2008 Federal Bailout) now allows you to complete a short sale on a primary residence without any tax liability. This relief is only available on mortgage debt used to buy, build or improve your home, and it is only available for debt that was forgiven in the years 2007 through 2012.
Today when a homeowner sells their primary residence, they can file a simple form and the forgiven debt is no longer taxable. The amount of forgiven mortgage debt allowed to be excluded from income tax is limited to $2 million per year. This includes mortgage debt that was forgiven in foreclosure and debt reduced through a mortgage workout, short sale or foreclosure.
Short Sale of a Non-Primary Residence: If the property you are selling is not a primary residence, then you may be eligible for tax relief if you are considered insolvent. Insolvency is usually considered when your total gross debts are more than your total gross assets.
I’m sure a good tax professional can give you more information. I recommend that you consult with a competent legal or tax professional before moving forward with a short sale.