DEAR BOB: I own several acres of vacant land, zoned agricultural, which is valued at $145,000 per acre. Until about five years ago, I had many prospective development buyers. But then the city and county announced future plans to build a frontage road through my property. Now there is no interest in my land from buyers. But the city and county refuse to make a decision to buy or condemn my land. In the meantime, I have to pay property taxes and also pay for trash removal. Do I have any recourse under Internal Revenue Code 1033 for “involuntary conversion”? – Zoe H.
DEAR ZOE: Internal Revenue Code 1033 applies to tax-deferral benefits for real estate owners who either have their property condemned by eminent domain or have their property seriously damaged, such as by fire or flood.
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Your situation does not appear to qualify because the city and county are just considering a frontage road through your property. Until official action is taken, you are free to sell or trade your land.
As I read your letter, I thought about a rental house investment property I bought about 10 years ago. It was a run-down fixer-upper. The Realtor warned me the city was considering condemning all the houses on “my” side of the street for widening.
But I went ahead, bought the property at a bargain price, fixed it up, and sold it at a handsome profit to a nearby gas station owner who was well aware of the possible condemnation.
Today, over 10 years later, the street still hasn’t been widened. I suggest you go ahead and build on your property. If the city refuses to issue you building permits, then you and your attorney can sue the city for inverse condemnation damages, which take away the full use of your property.
PARTITION LAWSUIT CAN FORCE JOINTLY-OWNED REALTY SALE
DEAR BOB: You are so right that parents should not add their children to their realty titles. My wife and I learned that the hard way. When our son was in his 20s, he was very ambitious and successful. We were so proud of him. As we had some health issues about six years ago, we decided to add him to the title to our home so he wouldn’t have to go through probate if we died. Thanks to modern medicine, we both overcame cancer and are now in excellent health. But now we want to sell our home, worth about $450,000, to move to a warmer climate. However, our now-unemployed son in his 30s demands his one-third share (for which he paid nothing). What can we do to force a sale? – Henry S.
DEAR HENRY: The legal answer is you can bring a partition lawsuit against your ungrateful son to force a sale of the property. But the drawback is the sale proceeds will then be split three ways. For more details, please consult a local real estate attorney.
HOW TO SUE AN OUT-OF-STATE HOME WARRANTY COMPANY
DEAR BOB: When we bought our home, the Realtor sold us a one-year home warranty policy from a company headquartered in Idaho. I can’t find any nearby office. When our water heater “blew up,” they refused to pay for a replacement. They said it was an old water heater (true) so it was a pre-existing condition for which they don’t have to pay. So we had to pay the $579 replacement cost, including upgrade to conform with the current building code. It’s not a large amount. But I hate to see the company get away with this. How can I sue the home warranty company without having to go to Idaho? – Jan C.
DEAR JAN: If that home warranty company is doing business in your state, they are required to have a designated agent to accept service of process. To find that agent, contact the appropriate state official who regulates corporations. Where I live, it’s called the Secretary of State.
Contact that official to learn who is authorized to accept service of process for that home warranty company in your state. If the company isn’t registered, then you can serve the Small Claims Court summons and complaint on the appropriate state official. Your local Small Claims Court clerk should be able to give you more details.
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