Real Estate in Steamboat

Misrepresenting square footage can get a seller into big trouble. If a buyer relies on a seller’s disclosure about the living square feet in his home and the buyer later finds out that the representation was overly ambitious, a lawsuit could ensue.

Sellers have a tendency to round up the number of square feet in their home. The more cautious approach would be to round down. The safest approach would be to make no representation about square feet at all. In an ideal world, this would be the perfect solution. In the real world, however, buyers want to know how many square feet are included.

It’s easy to understand why. Most buyers are busy and don’t want to waste time looking at homes that won’t work for them. Describing a listing by the number of bedrooms and bathrooms, without any reference to square feet, is a safe approach. But, it tells buyers little about the actual size of a listing.

In the diverse housing stock in many older neighborhoods, such as the desirable Rockridge area in Oakland, Calif., three-bedroom homes range in size from about 1,300 square feet to more than 3,000 square feet. To say a house has three bedrooms tells a buyer little about the usable space.

When the number of livable square feet — square feet excluding such things as decks, terraces, garages, basements and storage rooms — is not provided in the listing information, buyers often search on their own for this information.

It’s not that hard to come up with a figure. Simply go to Zillow.com and type in an address. The square-footage figure that pops up is presumably from the public record. Unfortunately, the “public record” often doesn’t reflect reality. It may be accurate for new homes that haven’t been modified since the original building permits were approved. The figure is far more subject to error for older homes that have been remodeled over the years.

Remodels are often done without building permits, which wouldn’t be reflected in the public record. However, even when add-ons are done with permits, the public record is not always changed to reflect the increase in square feet.

HOUSE HUNTING TIP: It’s a good idea for buyers to visit the local building or planning department to find out what documents are on record regarding a listing they’re considering buying. This should be done during the inspection contingency time period. If possible, ask for copies of all the permits that were taken out on the property, starting with the original building permit.

If permits for obvious modifications to the property are missing, this could indicate the seller, or a previous owner, took shortcuts. Or, it could reflect a shortcoming in the planning department records. For example, fires in the City of Oakland Planning Department partially destroyed the permit archives.

Buyers often like to compare listings they’re considering based on the price per square foot. This is a far-from-accurate way to figure out if you’re paying a fair price for a property, unless you’re looking at homes in a new housing development where there is little variability.

Also, if the figures you’re using are from the public record, which is often wrong, the reliability is even more in question. The most accurate source of square footage is the information from the local permitting agency. If that information is not available, a licensed appraiser can measure the house to provide square-footage calculations.

THE CLOSING: Keep in mind that an appraiser might call a room a bedroom — even though it wasn’t permitted as such by the building department — if the work was done by licensed professionals and complies with building-code requirements.

Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.

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Copyright 2007 Dian Hymer

(This is Part 1 of a two-part series.)

Case histories of subprime loans that have gone to foreclosure often generate righteous indignation. With benefit of hindsight, many if not most of them look as if they never should have been made. Such indignation is one important motivator for recent demands that government should require that all home mortgages be “affordable.”

While affordability is a difficult concept to define rigorously, one well-defined affordability rule has emerged with the approval of bank regulators, community groups and many legislators. It applies to adjustable-rate mortgages, or ARMs, which have more than their proportionate share of foreclosures.

In many cases, lenders assess the ability of ARM borrowers to make their payments at the initial interest rate, which is artificially low. When the rate increases, the payment also increases and may become unaffordable.

I will use the 2/28 ARM, the most widely used instrument in the subprime market, to illustrate. The rate is fixed for two years, after which it is adjusted every six months to equal the value of the rate index at the time of the adjustment, plus a margin, which is fixed for the life of the loan. Any rate increase may be limited by a rate-adjustment cap.

For example, assume the initial rate is 6 percent; the index is one-year LIBOR, which currently is about 5.4 percent; the margin is 6 percent; and the adjustment cap is 3 percent. If the index remains unchanged, the rate after two years will rise to 9 percent, the maximum permitted by the cap, and six months later to 11.4 percent. Assuming a 30-year mortgage, the payment will increase by 32.7 percent in month 25, and by another 21.3 percent in month 31. The borrower may not be able to manage such formidable increases.

The affordability proponents propose that lenders should be required to qualify borrowers at the fully indexed rate, or FIR, which is the current value of the index plus the margin, rather than the initial rate. In the example, the FIR is 5.4 percent + 6 percent = 11.4 percent. The logic is that borrowers who at the outset can meet the payment calculated at the FIR will find it affordable 24 or 30 months later when the rate increases.

The requirement, however, would have little impact because it can be so easily (and legally) evaded. This may be a good thing because the consequences of an effective rule might well be unacceptable.

Borrowers are qualified using maximum ratios of mortgage payment plus other housing expenses to income. Assume the maximum ratio is 36 percent and that the borrower taking out the 2/28 ARM described above barely qualifies — his ratio is 36 percent — when the payment is calculated at 6 percent. Calculating the payment at the FIR of 11.4 percent would push the ratio to 51 percent, making the borrower ineligible.

The maximum ratio, however, remains within the lender’s discretion. This means that a lender who wants to make the loan has only to increase the maximum ratio to 51 percent and, presto, the borrower qualifies at the FIR. This would be a completely legal evasion. In the subprime market, ratios of 50-55 percent are not uncommon.

In principle, government could close this escape valve by freezing the qualification ratio, and 25 years ago this might have been possible. Ratios of 36 percent and 28 percent, measured with and without nonmortgage debt service, were then more or less the norm. As underwriting systems have evolved, however, maximum ratios have proliferated. They now vary from one loan program to another, and with other factors that affect risk, such as credit score, down payment, type of property, and loan purpose.

Government intrusion into this very complex process in order to make the FIR rule effective would be a disaster, and nobody has suggested it.

Proponents of the FIR rule either don’t realize how easily the rule can be evaded, or are satisfied to go through the motions. If the rule was effective, they might be forced to confront a really thorny issue.

Any government underwriting rule that is more restrictive than those selected by lenders, and which cannot be evaded, will reduce the number of households who qualify for loans. Of this group that is cut from the market, some would lose their homes through default and foreclosure had they received loans. This is the intended benefit of the more restrictive rule. A larger number, however, would have become successful homeowners under the previous rules and are now denied this opportunity. This is the unintended but inescapable cost of the restrictive rule.

To prevent one foreclosure by tightening standards, we prevent a larger number of successful loans. I don’t know what that number is, or what society should view as an acceptable number. These questions have been studiously avoided.

Next week: Unaffordable loans that are in the public interest.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Jack Guttentag

Editor’s note: Robert Bruss is temporarily away and will return next week. The following column from Bruss’ “Best of” collection first appeared Sunday, Nov. 12, 2006.

DEAR BOB: Our house is owned under my living-trust name. If I survive my husband, will the basis for the house be stepped up to market value as of the date of his death? Should I add my husband’s living trust to the deed? –Eliza W.

DEAR ELIZA: If the title to your house is in the name of your living trust and it is not a joint living trust with your husband, if he dies before you do, there’s nothing for you to inherit. Therefore, you won’t receive any stepped-up basis to market value on the date of his death.

Purchase Bob Bruss reports online.

However, if you and your husband have a joint living trust and he dies first, in a common-law state you will receive a new stepped-up basis to market value for the 50 percent inherited from your husband. But if the residence is held in a community property state with both spouse names on the living trust, if your husband dies first then you receive a new 100 percent stepped-up basis to market value.

For readers not familiar with the two major benefits of holding real estate titles in your living trust they are (1) avoidance of probate costs and delays, and (2) management of the property by the successor trustee if the original trustor becomes incapacitated, such as with Alzheimer’s disease or a severe stroke.

Please consult a local attorney who specializes in living trusts. It sounds like you need to change the title to your house to include your husband.

WHEN INVOLUNTARY CONVERSION INSURANCE MONEY ISN’T TAXED

DEAR BOB: My wife and I own a single-family rental house that was severely damaged by an accidental fire caused by our tenant. The house will have to be demolished and rebuilt. Our landlord insurance policy is expected to pay both the costs of rebuilding and our rental income losses for up to 12 months after the fire. We realize the rental income will be taxable in the years received. But what are the tax effects of receipt of the remaining insurance proceeds to rebuild? –Peter R.

DEAR PETER: The situation you describe is an Internal Revenue Code 1033 involuntary conversion. You have up to two years after the end of the tax year in which the conversion loss occurred to either rebuild or reinvest the insurance proceeds tax-free in a similar use property.

If your loss exceeds the insurance proceeds, you may qualify for a casualty loss business deduction on the excess loss. For details, please consult your tax adviser.

LEGAL REMEDY FOR A NOISY NEIGHBOR

DEAR BOB: My friend has a neighbor who plays very loud music outdoors. Because of a disability, my friend is severely affected by the vibrations. His homeowners association refuses to help. No other home is close enough to be affected by the noise. Is this a “private nuisance” that I have read about in your column? Does the fact he is disabled offer any special recourse? –Stephen O.

DEAR STEPHEN: You are correct about this being a private nuisance. Presumably your friend has politely asked the neighbor to keep the noise down, but without results. His next recourse is a private nuisance abatement lawsuit against the neighbor.

Your friend should consult a local real estate attorney for details. The disability doesn’t create any special legal advantage.

HIGH RISKS OF BUYING PRE-CONSTRUCTION OUT-OF-TOWN

DEAR BOB: About a year ago, I had an opportunity to buy into a pre-construction out-of-town development. I checked out the local market, which at that time was a “hot” seller’s market. So I invested a $25,000 deposit on a fourplex. Unfortunately, the developer was a crook who filed Chapter 7 bankruptcy. Is there any way to get my $25,000 back? –Todd Y.

DEAR TODD: If you are a regular reader of this column, you know I do not recommend investing in real estate that is more than an hour’s drive from your home. The reason is then you can easily see, touch, smell, and watch it.

You didn’t “invest” $25,000 in that out-of-town project. You speculated when you turned over your $25,000 to the developer.

Some states, such as California, require pre-construction deposits be held in a trust or escrow account so the developer can’t use those funds. Apparently, that didn’t happen or the developer’s bankruptcy trustee would have informed you.

What did you learn from this expensive lesson? (1) Don’t invest out-of-town (2) with people you don’t know and (3) who control your money. In the future, I suggest investing (not speculating) close to home where you can inspect the property before purchase.

USE SAVINGS TO PAY OFF EXPENSIVE HOME EQUITY CREDIT LINE

DEAR BOB: Is it worth cashing out my mutual funds (earning about 5 percent) and my savings account (earning 4.25 percent) to pay off my home equity credit line (HELOC), which is locked at 7.5 percent interest? I like the security of the mutual funds and having cash in a savings account. If I decide to pay off my HELOC, I was told it is better to pay it off slowly over six months rather than all at once. Is that true? –Brad K.

DEAR BRAD: Earning 4 percent to 5 percent (about 3 percent to 4 percent after taxes) interest income, and paying 7.5 interest (around 5 percent after tax deductions) makes no sense. Pay off your HELOC.

If you need the funds for an emergency or home improvements, you can always write a check on your HELOC and borrow the money again. It doesn’t matter for your FICO (Fair Isaac Corp.) credit score whether you pay off the HELOC all at once or gradually. By paying off your HELOC, your FICO score should improve.

REASON FOR HOME SALE AFTER 22 MONTHS IS VERY IMPORTANT

DEAR BOB: My husband and I lived in our home for 22 months before selling it. He reads the tax law to mean that we get a tax exemption for the time spent in our house. For example, if we lived in it 12 months, we would get 50 percent of the $500,000 exemption for a married couple. Is this correct or will we owe tax on our sale profit? –Michelle F.

DEAR MICHELLE: It’s a shame you didn’t wait to sell until after 24 months of ownership and occupancy to obtain the full $500,000 tax exemption.

Your husband conveniently misunderstood Internal Revenue Code 121. To qualify for a principal-residence-sale partial exemption, the reason for the sale must be one of those specified in the tax code and its regulations.

What was your reason for selling your home after only 22 months of ownership and occupancy? Was it due to a job location change, health reasons, or “unforeseen circumstances” such as divorce, job loss, multiple births, etc?

If your reason for the early sale qualifies, then you may be eligible for a partial tax exemption up to 22/24 (11/12) of the $500,000 exemption for a married couple (up to $250,000 for a single home seller).

However, if you sold your home for other reasons, such as moving to a better neighborhood or a bigger house, then you don’t qualify for a partial exemption and your capital gain is fully taxable. For details, please consult your tax adviser.

OWNER’S TITLE INSURANCE POLICY IS BEST PROTECTON FOR BUYER

DEAR BOB: We are in the process of trying to buy a house from a couple involved in a nasty divorce. They each have “street fighter” divorce lawyers who use one tactic after another to delay the sale closing. Just when we get close to a closing date, it gets postponed. The latest tactic is we will only get two quitclaim deeds, one signed by the ex-wife and one signed by the ex-husband. Is this dangerous for us? –Ryan T.

DEAR RYAN: No. Quitclaim deeds are very common in divorce situations. Neither ex-spouse wants to make any warranties or representations as to the condition of the property title.

Your best protection is to obtain an owner’s title insurance policy from a reputable title insurance company. Read it very carefully to be certain there are no liens or encumbrances you weren’t expecting. It is perfectly safe to accept a quitclaim deed if you also receive an owner’s title insurance policy.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Inman News

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, July 2, 2006.

“How would you like to take title to your new home, Mr. and Mrs. Buyer?” the attorney or title closing settlement officer asks.

Thinking fast, you wisely ask, “Well, how do most married couples take title?”

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The reply is usually something like: “Most couples take title in joint tenancy.”

Not wanting to appear stupid or uninformed, you reply, “That’s fine with us.” But do you fully understand the pros and cons of holding joint-tenancy title?

THE PRIMARY JOINT-TENANCY ADVANTAGES. To be legally correct, joint-tenancy real estate ownership means “joint tenancy with right of survivorship.” A few states require use of those exact words on the deed. But in most states, “joint tenancy” is sufficient.

Survivorship means the joint tenant who outlives the joint tenant co-owner(s) automatically receives the deceased’s share of the property without probate court costs or delays. Probate court avoidance is considered the major joint-tenancy advantage.

All that is usually necessary to clear the title of a deceased joint tenant’s name is to record a certified copy of the death certificate and an affidavit of survivorship with the local recorder of deeds.

The will of a deceased joint tenant has no effect on their joint-tenancy property. However, joint tenants still need a written will. In the event of simultaneous death of all the joint tenants, such as in a plane crash, the will of each deceased joint tenant determines who receives their share of the property.

Or, in the unlikely event one joint tenant kills another joint tenant, the wrongdoer cannot receive the deceased joint tenant’s share by survivorship so the deceased joint tenant’s will then becomes important.

Although joint tenancy usually involves two co-owners, such as husband and wife, there can be an unlimited number of joint tenants. But they all must take title at the same time by the same deed, and they all own equal shares.

For example, suppose John and Mary Buyer purchase their home as joint tenants. Each therefore owns a 50 percent share. However, when their daughter, Suzy, becomes 18 they decide to add her as an additional joint tenant.

To add Suzy to the title, John and Mary sign and record a quitclaim deed from themselves to John, Mary and Suzy as joint tenants with right of survivorship. The result is each of the three joint tenants now own a one-third interest in the home.

TENANCY BY THE ENTIRETIES FOR MARRIED COUPLES. In 24 states, a husband and wife can hold title as tenants by the entireties, which is very similar to joint tenancy. However, neither spouse can convey their tenancy by entirety share without the other spouse’s signature.

This ownership form overcomes the joint-tenancy disadvantage that one joint tenant can transfer his/her share without approval of the other joint tenant(s), thus breaking up the joint tenancy and creating a tenancy in common.

Tenancy by the entireties for husband and wife is allowed in Alaska, Arkansas, Delaware, Florida, Hawaii, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Wyoming, and the District of Columbia.

SEVEN PROS AND CONS OF JOINT TENANCY. Before consulting your attorney or other trusted adviser to determine if joint tenancy with right of survivorship (JTWRS) is right for your situation, it pays to know the pros and cons:

1. A JOINT TENANT’S WILL DOES NOT AFFECT JTWRS PROPERTY. Except for joint-tenancy simultaneous death or murder situations, a written will has no effect on JTWRS property. Especially in second marriages, where each spouse often wants to leave their half of the property to children of their first marriage, better alternatives might be holding title in a revocable living trust or as tenants in common.

2. PROBATE COSTS AND DELAYS ARE AVOIDED. When a joint tenant dies, his or her share automatically passes to the surviving joint tenant(s) without probate court interference. This is considered the major joint-tenancy advantage.

3. JOINT TENANT’S SHARE CAN BE ATTACHED BY JUDGMENT CREDITORS. Unknown to most joint tenants, judgment creditors of one joint tenant can attach that person’s share of the property. Or, if a joint tenant files bankruptcy and there is sufficient equity in the property, the bankruptcy court can order the property sold with the proceeds divided among the co-owners.

However, after a joint tenant dies, creditors cannot attach the deceased’s share, which automatically passed to the surviving joint tenants.

4. IN A PARTITION LAWSUIT, ONE JOINT TENANT CAN FORCE A SALE OF THE PROPERTY. In most states, one joint tenant co-owner can bring a partition lawsuit to force a sale of the property. The same result applies to tenants in common.

5. ALL JOINT TENANTS CAN OCCUPY AND MANAGE THE PROPERTY. Although each joint tenant has the right to occupy and manage the property, this can become a problem if one joint tenant refuses to pay his or her share of the property expenses.

However, if one joint tenant pays all the expenses, there is a right of reimbursement for necessary costs, such as property taxes.

If a joint tenant is under 18, a minor cannot convey title or pay their share of the property expenses unless represented by a court-appointed guardian. For this reason, minors should usually not be added to the title as joint tenants.

Similarly, if a joint tenant becomes incapacitated, such as with Alzheimer’s disease or a severe stroke, a court-appointed conservator might be necessary to represent the incapacitated joint tenant. However, this problem can be avoided if title is held in a revocable living trust instead of joint tenancy.

6. APPROVAL OF CO-OWNERS IS NOT NEEDED TO BREAK UP A JOINT TENANCY. Except for tenancy by the entireties between husband and wife, one joint tenant can secretly convey his/her share to a third party, thus breaking up the joint tenancy and creating a tenancy in common.

The most famous court decision on this issue is the 1980 decision in Riddle v. Harmon (162 Cal.Rptr. 530). Shortly before her death, the wife secretly conveyed by a quitclaim deed her joint-tenancy share to herself as a tenant in common. After her death, the surviving husband presumed he owned the entire property as the surviving joint tenant. But the court ruled the late wife’s secret deed to herself as a tenant in common made her half of the property subject to her will, which left her assets to a third party. The widower husband retained his 50 percent share as a tenant in common.

7. NONSIMULTANEOUS DEATH OF JOINT TENANTS CREATES UNINTENDED RESULTS. When all joint tenants die at the same time and the order of death cannot be determined, such as in a plane crash, the share of each deceased joint tenant then passes according to his/her written will (or by the state law of intestate succession if no will is found).

However, if one joint tenant survives the other for just a short time, his or her heirs receive the entire property. That happened a few years ago in Berkeley, Calif. Joint-tenant property owners Larry and his girlfriend Lana were on an evening walk. A drive-by shooter’s bullets hit both Larry and Lana.

They were rushed to a nearby hospital where Lana died at 2:58 a.m. Larry was kept alive on a ventilator until 4:55 a.m. when he died. Because Larry survived Lana, he was the surviving joint tenant of their properties. His heirs inherited all the joint-tenancy property under his will and Lana’s relatives received nothing because she was not the surviving joint tenant.

CONCLUSION: Although holding title as joint tenants (or tenancy by the entireties between husband and wife where allowed) offers many benefits, it also provides possible disadvantages. Other co-ownership alternatives to be considered include tenants in common and revocable living trusts. Consultation with your attorney and tax adviser is recommended.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Inman News

Nothing grabs people’s attention or draws crazed male wolf calls quite like the sight of some old Las Vegas high-rise hotel being imploded. While Americans may never again view such events without eerie flashbacks to 9/11, bringing down a large building predictably, and above all safely, ironically remains a calling that demands both skill and finesse.

The few seconds it takes to carry out a graceful, seemingly slow-motion building implosion makes this kind of work look simple — even effortless. In fact though, it requires weeks and often months of planning and preparatory work. The engineering involved can be nearly as complex as that used to design the building in the first place.

First, high-rise demolition engineers or “blasters” study the original building plans and decide how to persuade the structure to fall and where they want it to. Nonstructural portions are often removed by conventional methods so that they won’t impede the collapse, and columns or beams may be weakened so that they’ll fail in predictable locations — something like scoring cardboard to make it fold where you want it to.

Despite the well-known use of explosives in this profession, it’s gravity that really does the job. After all, the energy it took to hoist every single beam and brick into place is locked up in the structure, waiting for Mother Nature to reclaim it. The taller the building, moreover, the more stored energy it contains. Using explosives just gives gravity a little nudge and lets it go to work.

Often, the presence of nearby structures requires a building to be brought down in a certain direction, or even within the space of its own footprint. To accomplish this, blasters use a carefully choreographed sequence of explosions, each of them relatively small, to induce a predictable and orderly collapse. For example, in a typical high-rise implosion, the bottom center support columns will be blasted first, followed a few seconds later by the columns further out, so that the sinking middle portion will pull the building walls inward after it. In a reinforced concrete building, the blasters may choose a grade of explosive that will pulverize the concrete but leave the reinforcing bars intact, so that the steel strands will help guide the building down in the right direction.

While there are countless outfits who demolish buildings, in the realm of high-rise demolition, there’s only one superstar. Controlled Demolition Inc. is a Maryland company run by the Loizeaux family, the Flying Wallendas of building implosion. Through three generations, the Loizeauxs have demolished skyscrapers, stadiums, smokestacks, bridges, radio towers and just about every other kind of large structure imaginable. They’re even listed in the Guinness Book of World Records for the most buildings to be imploded at the same time — 17 — handily beating their own previous Guinness record of 12. It’s a tribute to the family’s skill that the public almost nonchalantly expects buildings weighing many millions of pounds to obediently crumble into a tidy little pile at the push of a button. Making it so isn’t quite as easy as it looks.

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Arrol Gellner

When you’re standing there, surrounded by Christmas ornaments, Halloween decorations and other boxes representing a plethora of seldom-used items, your eyes can’t help but wander up toward the ceiling. Hmmm … all that space up there in the attic, just waiting to be filled. But can you use it safely? And how do you get up there, without having to drag out the big ladder every time?

Whether or not an attic can be safely used for storage depends on the framing that supports the ceiling, the size and span of the lumber, the weight of the items being stored, and other variables that are unique to each home. The typical trussed or stick-framed attic is capable of supporting light loads evenly spaced, such as boxes of decorations or clothes. They are typically not suitable for heavy, concentrated loads such as boxes of paper or files.

Also, you should never cut any components in the ceiling or roof framing in order to accommodate storage — or for any other reason — unless you fully understand how the framing supports its loads, and how to transfer those loads during and after the reframing process. In short, never attempt to alter framing or use the attic for heavy storage purposes without first consulting with an experienced contractor, architect or structural engineer.

GAINING ACCESS

If you’ve determined that the attic is safe for storage, the next question is how to get up there safely and conveniently. For that one, Werner Ladders has come up with an innovative solution in the form of their “Televator” Telescoping Attic Ladder. The Televator is a fully retractable aluminum ladder that stores up in the attic behind a door, and that telescopes down into the room when needed.

Unlike traditional folding attic access stairs, the Televator requires very little effort to use, and very little room in which to open and set up, making it a great solution for confined areas such as bedroom closets where existing attic access hatches are typically located. An included metal pole is used to open the ceiling door and then telescope the ladder down, and the same pole is used to reverse the process to store the ladder back in the attic. The ladder sections are spring-loaded, and require only minimal strength to pull down or retract. The Televator comes complete in one box, and is easy to install for the average do-it-yourselfer. You will need to supply your own plywood for constructing the door, but all of the necessary door hardware is included with the kit.

The first step in the installation of a Televator is to determine if it will work for your particular attic access situation. The Televator is available in two sizes — one for ceilings between 7 feet 4 inches and 8 feet 4 inches in height, the other for ceilings up to 10 feet 3 inches. Both require a ceiling opening that is a minimum of 22 inches by 22 inches (it can be larger than that in either or both directions, but not smaller). When the ladder is closed, it requires 13 horizontal inches from the back of the attic opening to any obstructions, and when it’s open it requires 30 vertical inches of clearance from the top of the attic framing. In its fully extended position, the 8-foot ladder requires 35 inches of clear space horizontally from the back of the attic opening to the front of the ladder’s feet where they rest on the floor; the 10-foot version requires 41 inches.

Once you have the hole in the ceiling ready, installation is pretty straightforward. The ladder unit is completely assembled, and requires only the installation of a couple of corner support brackets and a header plate. You’ll need a drill and a wrench for putting in the lag bolts.

Next, the length of the ladder is adjusted for your specific ceiling height. Here again, the Televator’s unique design makes this process a simple matter of removing and then reinstalling a couple of screws in the adjustment brackets — no cutting is required.

The final installation step of the ladder itself is to lift the unit into the opening and hang it on the support bracket. Two locking plates are then bolted into place and the two support struts are attached, and that’s it. Complete installation, not including making the door or doing anything with the ceiling opening, should take less than an hour.

Making and installing the door is a matter of cutting a piece of 1/2-inch plywood to size, then installing the hinges, support brackets, latch and weather stripping. Everything you need (except the plywood) is supplied, and there are complete instructions and templates for every phase of the installation.

The Televator ladder carries a load rating of 250 pounds, and retails for $199 for the 8-foot version. You can visit www.wernerladder.com for more information, including a dealer locator.

Remodeling and repair questions? E-mail Paul at paul2887@ykwc.net.

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Inman News

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, July 2, 2006.

DEAR BOB: I plan to sell my home. Should I stay in my home while trying to sell it? We could move into our new home and leave the one we are trying to sell vacant. Which scenario will help sell our home faster? –Dana P.

DEAR DANA: Your listing real estate agent is in the best position to advise you whether to stay or move during the sales process.

Purchase Bob Bruss reports online.

The specific answer depends on whether your home shows well with you and your furniture still in the house. Or maybe it will show better if you move out, spruce it up with fresh paint and perhaps new carpets.

As a buyer, I like vacant houses because then I can easily spot most defects. As a seller, I prefer to sell vacant houses after painting and cleaning them, usually installing new wall-to-wall carpet. Vacant rooms look bigger than rooms occupied with furniture.

NO TAX DEDUCTION IF LOAN IS NOT SECURED BY YOUR HOME

DEAR BOB: To buy our first home, my wife’s parents loaned us $50,000. We have been faithfully repaying them monthly, including interest. As they are retired, they need the income. However, when we were audited by the IRS, our interest deduction for this loan was denied. The IRS agent said the interest is not deductible because the $50,000 loan is not secured by a mortgage on our home. Is this correct? –Gerry T.

DEAR GERRY: Yes. For home mortgage interest to qualify as an itemized tax deduction, the loan must be secured by a mortgage on your property.

To qualify for an interest deduction, you should give your wife’s parents a mortgage or deed of trust to secure their promissory note. Then you can deduct the interest you pay each year to them. For more details, please consult your tax adviser.

SHOULD HOME SELLER CREDIT BUYER FOR DEFECTIVE WINDOWS?

DEAR BOB: I just sold my house. The buyer had it professionally inspected. All went well, but the buyer asked me to replace a couple of windows that have condensation, probably due to a bad seal. My home is 12 years old and in beautiful “mint” condition. I just put more than $20,000 into it with a new roof, siding, appliances, and professional paint job throughout. I feel the buyer is being unreasonable, asking me to fix the one and only thing wrong with my home. The house is selling for $350,000. Am I being unreasonable not wanting to pay for the windows? –Joe McC.

DEAR JOE: If the buyer’s purchase offer is acceptable, especially if the local home sales market is slow, why risk losing him over a few hundred, or even a few thousand, dollars?

Better than replacing those windows, however, is to offer your buyer a “repair credit” at the closing, such as $500 or $1,000. Chances are the buyer won’t even replace those windows, but then you won’t risk losing the sale over a petty item.

The new Robert Bruss special report, “Probate Property Profit Secrets Revealed,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 94010, or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Inman News

Question: We have owned a condo on a local golf course for seven years. There is a beautiful waterfall fountain/pond on the property that has been there since the complex was built in the early 1970s. We, along with the owner before us, took good care of it and consider it to be an integral part of our living experience. We are not sure if it is in the association common area, but the association has never taken any steps whatsoever to care for the fountain. We recently received a letter from the association board of directors that they are turning off the water to the fountain because the cost of the water is being borne by the association. They also claim that they need to clean out the water to prevent a problem with standing water and West Nile Virus?! Our concern is their actions will de-value our property, as the fountain/waterfall/pond is a very attractive asset to the property. Do we have any recourse on this issue?

Property manager Griswold replies:

You may not have any recourse, but you should do some homework and find out. If the location of the waterfall fountain/pond is on the association property then they have the right and authority to make that change. So check your governing documents and the condominium plan to make sure who is responsible for this particular element of the property. You could also formally offer a written agreement under which you would underwrite the ongoing costs of proper maintenance, but the board of directors may not be interested in such an arrangement, as it creates a grey area if there are ever any problems. Another legitimate concern would be that such a practice might establish a precedent that the board does not want to support throughout the project. In other words, you may be a responsible homeowner and fulfill your commitment, but the board would have to treat others making similar proposals in the same manner, and they may not be as diligent as you are in properly maintaining components of the association, which would have negative repercussions for the association. You should also consider putting your concerns in writing in a positive manner. I would suggest that you point out the loss of this feature to the community rather than strictly recite concerns about your own personal interests. My experience is that most boards are likely to be swayed by a community perspective than simply your own loss of value, which is not the paramount concern of the board.

Question: We have a small apartment building, and we pay for the garbage pickup. A tenant did some “spring cleaning” and completely overwhelmed our bins, including mattresses and box springs and broken stereo shelving. The garbage collection company informed me that “if it’s not in the bin” I have to arrange for special pickup and pay for it. I asked the tenants if they could pay for the extra charges and they replied, “It’s not my problem, you provide the garbage pickup!” They do admit it is their stuff. Am I stuck with the bill?

James McKinley, an attorney for landlords, replies:

Although your agreement states that you are responsible for garbage pickup, you are probably not responsible for large items your tenant is attempting to dispose of even though it is your Dumpster. Without seeing a copy of the lease, it is difficult to give an opinion, but I doubt any residential lease implies that the landlord would be responsible for the disposal of large items such as mattresses, box springs and other items that don’t fit in the bin. If your lease does not specifically state that you are not responsible for the disposal of large items, you may want to modify the lease in the future. In your case, the tenants leaving large items that do not fit in the garbage bin should be considered littering in the common areas, and the tenants should be responsible for any additional charges required to haul these items away.

Steven Kellman, an attorney for tenants, replies:

I would have to weigh in here with James. I think that items like mattresses and box springs are not considered trash in the conventional sense. In fact, many landfills charge a separate fee for dumping mattresses, and often there are special rules about recycling large items such as mattresses and frames. Trash for everyday living does not normally include major hauling and dumping items. It appears that the landlord’s responsibility would be limited to the normal refuse generated by day-to-day living meant for the trash bin provided for the tenants. In this case, I think that the tenants are taking advantage of the trash service and trying to make it a free hauling, recycling and dumping service as well. This appears to be an inappropriate position to take unless the lease specifically provides for such rights, which I doubt it does. To maintain an effective and harmonious landlord-tenant relationship, both parties need to respect and not take any unfair or unlawful advantage of each other. In this case, the tenant should pay the extra charges, which would probably be much less than the hauling and landfill costs.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of “Property Management for Dummies” and co-author of “Real Estate Investing for Dummies,” and San Diego attorneys Steven R. Kellman, director of the Tenant’s Legal Center, and James McKinley, principal in a law firm representing landlords.

E-mail your questions to Rental Q&A at rgriswold.inman@retodayradio.com.

Questions should be brief and cannot be answered individually.

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Inman News

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, July 2, 2006.

In 2000, Richard and Lilia Aaron bought their residential property. The only access to a public road over their land is a one-half-mile-long, steep driveway, which is difficult to use, especially in inclement weather.

Regular use of that driveway had been discontinued by previous owners for about 20 years because there was a more convenient access over a paved private road, known as Texaco Road, which crosses adjoining property owned by Dallas and Patricia Dunham.

Purchase Bob Bruss reports online.

Not long before the Aarons’ property purchase, the Dunhams began to limit use of the road. Evidence shows the road was created in 1982 by Texaco, which used it to reach nearby leased property.

The prior owners of the Aaron property used the Texaco Road without asking or receiving permission. But in 1999 the Dunhams wrote a letter to the prior owners, the Fullertons, revoking permission to use the road. The Aarons were aware of the dispute when they bought their home in 2000.

Shortly after purchase, the Aarons brought this declaratory relief lawsuit against the Dunhams, claiming a prescriptive easement to continue using the private Texaco Road over the Dunham land. They argued the previous owners’ use of the road was adverse, open, notorious and continuous without permission of the property owners, so a prescriptive easement was thereby created.

If you were the judge would you rule the Aarons have a prescriptive easement to continue using the Texaco Road?

The judge said yes!

To create a prescriptive easement, the judge began, the nonpermissive use must be adverse, open, notorious and continuous for the time period specified by state law. The evidence shows the use by the previous owners of the Aaron property was without the express permission of the Dunhams, he added.

If the past use had been permissive, that permission could be revoked and there could be no prescriptive easement created because there was no adverse or hostile use, he commented.

But the evidence shows the Aarons and the previous owners used the Texaco Road over the Dunham property without express permission for many years, the judge emphasized.

Because they have another route, although inconvenient, to reach their property from the public road, the Aarons are not entitled to an easement by necessity, he noted. However, they have proven all the elements and are therefore entitled to be granted a prescriptive easement to use Texaco Road across the Dunham property, the judge ruled.

Based on the 2006 California Court of Appeal decision in Aaron v. Dunham, 41 Cal.Rptr.3d 32.

(For more information on Bob Bruss publications, visit his Real Estate Center).

Copyright 2007 Inman News

Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, July 2, 2006.

DEAR BOB: About three years ago, my son wanted to buy a condominium. He was earning about $75,000 per year as a CPA working for a “big six” accounting firm. However, his FICO credit score was horrible, around 600, due to his mistakes (failure to pay credit-card bills) while he was in college. So I agreed to take title and obtain the condo mortgage in my name. Since then, he paid all the mortgage payments on time. I recently signed a quitclaim deed adding him as a joint tenant with right of survivorship. When he approached the mortgage company about transferring the loan to him so he can improve his FICO score, he was told he would have to pay a 1 percent assumption fee, which will be about $3,600. He says he wants to do this so he can deduct the mortgage interest and property taxes on his income-tax returns. Do you think he should do so? –Dan F.

DEAR DAN: No. As a CPA, your son should know he is entitled to deduct the itemized property tax and mortgage interest deductions he pays on his tax returns if his name is on the condo title. His name does not have to be on the mortgage obligation to claim the interest deduction.

Purchase Bob Bruss reports online.

Millions of U.S. homeowners have purchased homes “subject to” an existing mortgage. If they fail to make the payments, they can lose their property by foreclosure. That is your son’s situation.

What matters is he must be on the title and be legally obligated to make the payments or risk losing the property. When you added his name to the title, he became eligible to claim the income-tax mortgage interest and property-tax deductions.

Other than improving his FICO score, I see no advantage for him paying $3,600 to assume that mortgage obligation.

EACH MORTGAGE LENDER LOOKS AT LEASE-OPTIONS DIFFERENTLY

DEAR BOB: When a tenant-buyer goes to a mortgage lender to get a loan to exercise a lease-option, does the bank look at the option consideration money and the rent credit earned during the tenancy as part of the down payment? I am told the loan-to-value ratio will be based on the option purchase price rather than the current fair market value –Joel D.

DEAR JOEL: Having been involved in many home lease-option purchases and sales, my experience has been that each mortgage lender treats lease-options differently.

When a lease-option buyer obtains an adjustable-rate mortgage, I’ve found the mortgage lenders are the most flexible, giving full down-payment credit for the buyer’s option money and the rent credit earned during the tenancy period.

The buyer should consult at least a half-dozen mortgage lenders to obtain their specific mortgage terms for exercising a lease-option. This is a situation where I highly recommend consulting an experienced mortgage broker who should know which lenders are the most flexible in such situations.

PRESCRIPTIVE EASEMENTS DON’T REQUIRE PROPERTY TAX PAYMENTS

DEAR BOB: About a year ago, you had a letter regarding prescriptive easements over private property. As I recall, you said one of the important requirements is whether the owners were paying the property taxes. Our private road travels through several other properties before reaching the public road. There are no recorded easements. We each pay the property taxes on our separate parcels. The property is in a rural area, outside the city. Do we have a prescriptive easement? –Delores R.

DEAR DELORES: I think you confused obtaining title to an entire property by adverse possession with obtaining a prescriptive easement over a neighbor’s property.

Adverse possession to obtain title to an entire parcel requires open, notorious, hostile (without permission) and continuous use of the property, plus payment of property taxes, for the number of years required by state law.

However, obtaining a prescriptive easement only requires open, notorious, hostile and continuous use for the required number of years, but without payment of property taxes. For full details, please consult a local real estate attorney.

The new Robert Bruss special report, “Probate Property Profit Secrets Revealed,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 94010, or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his Real Estate Center).

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What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2007 Inman News