Q-Almost two months ago, we made an offer to buy a house. Before we made our bid, we discussed with the realty agent our desire to add a family room on the back of the house. She said there wouldn`t be any problem. So we went ahead and the sellers accepted our offer. However, it was not contingent on being able to construct the family room.
A few weeks later, my husband went to City Hall to check on the feasibility of adding a family room. The building official checked the property and said the family room would be too close to the boundary and there is a utility line easement where we want to build. When we went back to the realty agent and the sellers, they refused to refund our $5,000 deposit. Without such an addition, the house will be too small for our family. How can we get out of this deal and get our $5,000 back?
A-Shame on that real estate agent for telling you there would be no problem in adding a family room. Instead, she should have said, ”Let`s go to the build-ing department at City Hall to see if that is feasible.”
If the agent represents the seller, both the seller and the agent may be liable for damages to you.
Since you apparently have tried to cancel the contract and get your $5,000 back, you appear to have no alternative except to retain a real estate attorney.
Duplex deduction
Q-In early 1989, I bought a duplex and live in one-half of the house; the other half is rented to a tenant. I reported the rent income on my income tax return and deducted half of the fire insurance, property taxes, mortgage interest and repairs affecting the rental unit. But I did not deduct depreciation because I had been told by a friend that I cannot depreciate my residence. Several weeks ago you told another reader she can depreciate a rental apartment when the owner lives in the same building. Would that apply to my situation, too?
A-Yes. You not only can, but you must depreciate the rental portion of the duplex. It should be easy to amend your 1989 income tax return by filing IRS form 1040X and claiming a tax refund thanks to your depreciation deduction.
Only homes qualify
Q-My late husband and I owned some commercial property where his business was located. I inherited his half of the property, which received a new basis stepped up to market value. But my half of the property retains its old low basis, according to my tax adviser. Because I am 72, I thought there is some tax break when the elderly sell property, but my tax man says there is none. Is this correct?
A-Your tax adviser is correct. There is no special tax exemption when elderly owners sell real estate other than their principal residences. Perhaps you were thinking of the ”over 55 rule” $125,000 home sale tax exemption. Unfortunately, it does not apply to sales of other types of property.
Boundary dispute
Q-About a year ago, a new neighbor bought the house next to ours, where we have lived for 32 years. She says she had a survey made that shows our fence is about three feet on her side of the property line. Now her lawyer demands we pay to have this fence removed. It is overgrown with ivy and we have roses planted on our side of the fence. This all sounds crazy to me. All the lots on our street have 50-foot frontages and I measured ours, which is exactly 50 feet. I hate to get into a fight with the new neighbor, but I want to do the right thing. What should I do?
A-Please consult a real estate attorney. He or she will probably advise you to obtain a survey of your property. Even if the survey shows your neighbor is correct about the property line location, it sounds like you are entitled to a prescriptive easement, since you have had open, notorious, continuous and hostile possession of another`s property for well over the number of years required by state law.
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Please note: Real estate laws differ from place to place, and laws of your area should be checked before making decisions on real estate problems. Robert Bruss will answer inquiries addressed to Tribune Real Estate Features Service, P.O. Box 280038, San Francisco, Calif. 94128.
The new special report ”The Pros and Cons of Equity Sharing” by Robert J. Bruss is available for $3.75 from NewspaperBooks, Box 4386, Orlando, Fla. 32802.
