DEAR BOB: We are considering buying a retirement home in a very nice new golf course development near where we frequently vacation. However, we learned the houses are on 99-year land leases. Although we don’t plan to be around when the lease expires, won’t that hurt the value of the homes as they become older? Are there any advantages or disadvantages? –Connie S.
DEAR CONNIE: That 99-year land lease is a great deal for the developer, but not so good for the home buyers. The reason is at the end of the 99 years, title to the houses reverts to the landowner.
Purchase Bob Bruss reports online.
As you can see, the market value of the houses will decline as the 99th year approaches.
However, if the 99-year land leases contain an option for the individual homeowners to buy the land beneath their houses, that makes them much more attractive for several reasons.
The major reason is your land-lease payments then become tax deductible, just like interest. But another reason is most people want to own the land under their home. Please consult a local real estate attorney to review the documents before getting involved.
UNLESS LAND TITLE IS IN A LIVING TRUST, PROBATE IS USUALLY REQUIRED
DEAR BOB: Four of us own a valuable piece of land that we want to sell in the next year or so. The problem is one owner is very ill and will probably die in the next few months. Is there any way to avoid having her share tied up in probate court so title can be transferred to her heir quickly after her death? A problem, however, is she has Alzheimer’s and doesn’t understand what’s going on –Lucie R.
DEAR LUCIE: Presuming you hold title as tenants in common, not as joint tenants with right of survivorship, her share will pass in probate court according to the terms of her will.
Or, if she holds her share in her living trust, then probate court action is not required after her death and her successor trustee can easily transfer her share of the land to whoever is named in the living trust.
Unfortunately, because of the Alzheimer’s disease, it’s too late to create a living trust for her now to avoid probate. For more details, please consult a local probate attorney.
MUST LANDLORD REFUND SECURITY DEPOSIT BEFORE MOVE-OUT?
DEAR BOB: Is there a law requiring a landlord to refund the tenant’s security deposit after a number of years of occupancy? I have never heard of such a law, have you? –Gus G.
DEAR GUS: No. But landlord-tenant law is controlled by state law. Although I try to keep up on new real estate laws, I have not heard of any state which requires landlords to refund tenant security deposits before the tenant moves out. If any reader knows of such a state law, they will surely let me know and I will pass on the information.
The new Robert Bruss special report, “Pros and Cons of Today’s Five Best Real Estate Profit Opportunities,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 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.
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