DEAR BOB: I, along with a large number of fellow senior citizens, live in a condo complex of 192 units. Our problem is that due to the high number of rentals, 98 to be exact, we seniors are unable to obtain reverse mortgages, which many of us had counted on to help with our finances. Most of us have no mortgages. What can we do? – Carolyn B.
DEAR CAROLYN: For readers not familiar with the situation, most mortgage lenders refuse to make loans in condo complexes with more than 20 percent to 30 percent rentals. The primary reason is the foreclosure rate is much higher in condo complexes with a large number of absentee owners.
Purchase Bob Bruss reports online.
I am shocked you and your fellow condo owners allowed the situation to get out of control with more than 50 percent rentals. Don’t owner-occupants want to live in your condo complex? What is so wrong that it doesn’t appeal to owner-occupants?
If you wanted to sell your condo, you would have great difficulty unless you can find a cash buyer. Although some mortgage lenders will still make loans in your complex, they will charge more due to their very high risk.
Don’t blame the reverse mortgage lenders for not approving reverse mortgages in your high-risk complex. They are just being prudent.
You and your fellow owner-occupants should meet with the condo board of directors to get the percent of renters down to no more than 20 percent. You’ll probably need to consult a local attorney familiar with condo law to determine what can be done to restrict future rentals.
NO INSURANCE COVERAGE FOR FRIVOLOUS LAWSUIT
DEAR BOB: Last year I sold my strip-mall plaza, which was located on two lots. I never spoke to the buyer–who had a buyer’s broker–nor his attorney handling the closing. After the sale, the buyer’s real estate broker contacted me about selling my vacant lot next to the shopping center. I was planning to put a storage business there. But when the buyer saw the broker’s for-sale sign on the lot, he contacted the broker and attorney. He told them he thought he also bought the vacant lot. The buyer’s agent and his attorney showed him that none of the closing papers included the vacant lot. Then he sued his attorney and his realty broker. He also named me as a defendant. I sent the summons and complaint to my insurance company, as well as the buyer’s insurance company, which also insures me because I carried back a mortgage for the buyer. They refused to defend me. Who is responsible to defend me? Can I counter-claim for damages for this frivolous lawsuit? – Lawrence S.
DEAR LAWRENCE: Neither your former insurance company nor the buyer’s insurance company has a duty to defend you. You should hire your own attorney.
After you win the lawsuit, or are dismissed by the court as a defendant, then you can sue that nasty buyer for malicious prosecution damages. But you first must win the case. For full details, please consult a local real estate attorney.
UPDATE YOUR LIVING TRUST
DEAR BOB: I greatly enjoy your articles each week. About 10 years ago, my husband and I took out a living trust. Then we moved to Chicago. Now we moved to California. I worry that we never had anyone check our living trust for the last 10 years. My daughter, who is our successor trustee, has had health problems. I am 95 years old and need help to do the correct things legally. What should we do? – Lorel B.
DEAR LOREL: You definitely need to consult a localestate-planning attorney to update your living trust and be certain all your major assets are included so probate costs and delays can be avoided.
A major mistake many living trust owners make is they fail to transfer title to their real estate into their living trusts. For example, the title to your house or condo should be held in your living trust. If it isn’t, it will be subject to probate costs and delays, unless exempt.
The Robert Bruss special report “Living Trust Pros and Cons for Avoiding Probate Costs and Delays for Your Heirs,” is available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet download at www.bobbruss.com. Questions for this column are welcome at either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
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