By Robert J. Bruss, Inman News September 30, 2007Question: I own two properties. If the bank forecloses on one, will it affect my other property or my principal residence?
Answer: If you lose any property by foreclosure, your credit will be ruined. Mortgage lenders don't like to see a foreclosure on your credit reports.
However, unless you have a blanket mortgage on all of your properties (which is very rare), loss of one property by foreclosure won't affect your other properties.
Power lines thwart plans for poolQuestion: I want to install a swimming pool in my backyard, but there are electric power lines above the area and a power pole on my property. Can I sue the electric company because I cannot build my pool due to their encroachment?
Answer:When you purchased your home, you were obviously aware of the overhead electric power lines and the easement (not encroachment) over your property. The power company is not liable to you for damages, nor can you force the removal of the wires that are involved in the easement.
However, you could offer to pay the power company to move their wires.
What's deductible on rental house Question: I bought the house next door to rent out. My mortgage is $641 a month, plus an escrow account for the property taxes. I am getting $600 per month rent.
Can I show this as a loss on my income tax returns? My closing costs were about $7,000. Are they tax-deductible? What about the mortgage payments while I was remodeling?
Answer:Your rental income is reported on Schedule E of your income-tax returns. This is the same place you deduct mortgage interest (but not principal) payments and the property taxes paid to the tax collector.
You can also deduct other applicable expenses, such as repairs, insurance and depreciation (a noncash expense for estimated wear, tear and obsolescence).If your annual gross income is less than $100,000, you can deduct up to $25,000 of passive losses from your rental property.As for your closing costs when you bought the rental house, you may be able to deduct some expenses, such as prorated property taxes and mortgage interest.
But other closing costs, such as title insurance and recording fees, are not deductible and must be capitalized as part of your purchase-price cost basis.
It's a sad fact, but a deal's a dealQuestion: A friend of mine signed a contract to buy a house. She put $500 down and had a professional home inspection done. Her mother was battling cancer and died.
My friend backed out of buying the house. Now the seller and his agent are threatening to sue her for not buying. Can they do this?
Answer:Yes. When you sign a contract to buy real estate, that agreement is binding on both the seller and buyer. If the seller had changed his mind about selling, your buyer friend could have sued for specific performance of the sales contract to force the seller to deliver the deed.But a seller is unlikely to sue a buyer for specific performance to force the sale.
Instead, the seller might sue the defaulting buyer for breach-of-contract damages, namely the monetary loss the seller takes if the house is sold to another buyer for less money.
The buyer's personal problem with her mother's illness and death is not a valid reason to cancel the purchase contract.
Source: latimes.com
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