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Renter's lease valid after condo sale
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Q: I am interested in buying a condo that is currently rented out. The seller says that the lease isn't up for seven months and therefore I couldn't move in until then. If I bought this condo, would I be forced to become a landlord? Or can I kick the renters out before their lease is up?
-- L.
A: The rule is that a lease "survives the sale" and is as binding on the new owner as it was on the old one. (Foreclosure situations may have different rules.)
Perhaps the tenants would just as soon move early. Or you could try offering them a cash incentive to leave. Otherwise, remember that if you intend to finance your purchase with a mortgage loan, it may take a few months just to arrange that. Waiting to move in August might not be that much of a hardship, assuming it's really that specific condo you want. Understanding INTEREST
Q: I suspect that person who was told he couldn't deduct mortgage interest if he didn't pay for the entire year might have misunderstood. Or possibly the person who told him misunderstood. As a volunteer tax preparer, I frequently find that part-year owners are better off taking the standard deduction because it's higher than the itemized deductions.
In general, I find that home owners tend to overestimate how much the mortgage interest deduction is worth to them because they don't consider what the standard deduction would have been otherwise.
-- G.W.
A: I'll bet you're right, and you're not the only one who wrote me to point this out. Probably that new home- owner wasn't really told, "You can't deduct your mortgage interest," but rather, "You shouldn't deduct it because for this first year, it works out better to take the standard deduction." ONE SISTER REFUSES
Q: In your column, you mentioned that "any one of the co-owners can force a sale of the property." I'm interested to find out how this is done as my sisters and I inherited our parents' home and one sister refuses to sell or rent it. It's a two-family home and very rentable.
This has been going on since February 2011. My attorney informed me that it would be costly for him to do a partition. Is there anything else that I can do?
A: I was indeed referring to a court-ordered partition sale. Perhaps a letter from your attorney mentioning the possibility would move your sister to a more reasonable stand. SHORT SALE COMING
Q: I have not paid my mortgage for a year, and the bank doesn't want to modify my loan, so I'll be doing a short sale pretty soon. What I'm wondering is whether the lender can come after me for any money I owe. Are there any fines, and will I be taxed on anything?
A: You understand, I assume, that you can only do a short sale if your lender agrees to accept whatever you can get for your property on the open market and lift the mortgage lien so the sale can go through. Ask in advance whether your lender would later go after you with a judgment for the unpaid balance. And get the answer in writing.
Through the end of 2012, the IRS will not tax "forgiven debt" if it was for a mortgage on your own home.
Edith Lank will respond personally to any question sent to askedith.com.
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