No way to avoid revealing condo problems

DEAR BOB: I own a very nice condo in what you might call a “bad complex.” The board of directors is in constant turmoil. Our association reserve funds are inadequate so every time we need a major repair there is a special assessment of the owners. Of 42 units, 12 are now listed for sale. Fortunately, we have a rule the owners cannot post “for sale” signs, so prospective buyers don’t know of all the units for sale. Fortunately, I took your advice and made only a 10 percent down payment when I purchased about four years ago, so I don’t have much equity. But I am getting married and want to “move on” with my life. Is there any way I can advertise my condo for sale “as-is” to avoid revealing all the problems with the condo association? –Ken W.

DEAR KEN: No. An “as-is” real estate sale means the seller must reveal all known problems with the property, such as those you described, but he does not have to pay for any repairs.

Purchase Bob Bruss reports online.

I suggest you list your condo for sale with a real estate agent who has been successful selling condos in your complex.

HOW LONG SHOULD HOMEOWNER SAVE IMPROVEMENT RECEIPTS?

DEAR BOB: For years we have been saving the receipts for virtually every home improvement we make. Should we continue this practice, considering the generous exemptions of $250,000 and $500,000 allowed by Internal Revenue Code 121, which you often discuss? We are well under these limits and even if we stay in our home many years, I don’t think we will ever have that much profit. –Ray P.

DEAR RAY: Save those home improvement receipts “forever.” You never know when residential market values might skyrocket in your town.

CAN ONE HEIR FORCE OTHER HEIR TO SELL?

DEAR BOB: After our mother died in early 2005, my brother and I inherited her house. I have been living in it for about three years with my wife and two kids. I want to buy out my brother’s half, but he prefers to receive monthly rent for “his half” of the house. I want to get a new mortgage to buy him out. We are, and always will be, “best friends” so I don’t want to cause any problems, but I hate having to pay rent to my brother. My wife isn’t happy about this either. Is there any way I can make him sell his half of the house to me? –Jeff R.

DEAR JEFF: No. Presuming both your names are on the title, probably as tenants-in-common, either one of you can bring a “partition lawsuit” to force the sale of the entire property. The sales proceeds will then be divided between the two co-owners.

However, if you and your family wish to stay in the house, a partition lawsuit is not the solution.

Perhaps if you dangle some cash in front of your brother, explaining if he cooperates he will receive all this tax-free cash (because you both received a new stepped-up basis after your mother’s death), maybe he will sell his half to you.

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