Question: We are encountering financial problems due to illness and unemployment. So far we have been able to keep up our mortgage payments. But we weren't able to pay the property taxes when they came due. We are supposed to pay them directly as they are not collected with our mortgage payments. What will happen if we don't pay our property taxes?
- Larry S.
Answer: Most mortgage lenders have a tax service company which informs the lender when property taxes are not paid on time. The lender usually then pays the property taxes and begins foreclosure because failure to pay property taxes is a default on the mortgage.
My suggestion is to write to your mortgage lender, explaining your problem and how you propose to solve it. The lender can often pay the property taxes and add that amount to your mortgage balance. It will not hurt you to try that approach. Good luck!
Question: When I bought my home, the property disclosure form said I had public water, but I later learned the water comes from a private source. What can I do to get out of my purchase contract?
Answer: Your question is a bit confusing. Your letter is postmarked December 2011, Cape Coral, Fla. You refer to a private source?
If you've already taken title to your home, a rescission of the sale will require a lawsuit. However, if you have not yet taken title, you might be able to refuse to proceed due to misrepresentation of the water source.
Many non-public water companies have the franchise rights to supply water to a community. They must meet stringent water-qualified standards, the same as city water departments. If you cancel the purchase without a sound legal reason, you may have to forfeit your deposit and become liable for damages to the seller. You were not too clear on where you lived ... hope this works.
Question: Almost five years ago I inherited 19 acres of land which some day will be very valuable for a single-family housing development, or possibly commercial development. The sewers haven't been extended there yet, but they should be in a few years.
Meanwhile, a small developer has made me a good offer which will give me about $250,000 profit since my basis is very low. Is there any way I can avoid profit tax, as I would like to use the money to buy apartments?
- Gerald R.
Answer: Yes. That's easy. You can make an Internal Revenue Code 1031 tax-deferred exchange by trading equal or up in both equity and property value for those apartments you want to acquire.
If a direct exchange is not feasible, you can make an IRC 1031(A) (3) Starker delayed exchange. Be sure your sales agreement provides for a tax-deferred exchange.
When the land sales closes, the proceeds should be held by a third party accommodator, such as a bank trust department. You then have 45 days from the sale closing to designate the qualifying property to be acquired and 180 days to complete the acquisition. For further details, consult your tax adviser or attorney.
Have a real estate question?
Write, call, fax, or e-mail
Bob Jeffries, Realtor
C-21 Birchwood Realty Inc.
4040 Del Prado Blvd.
Cape Coral, FL 33904