Help with first REI deal

3 Replies

My wife and I have been approached by her parents about purchasing the house that she grew up in and that we live in currently. The property itself has an older two family building on the lot and then a newer duplex attached by a breezeway (the city would not let them split the lot into two separate properties and any new structure had to be built attached to the old building). Three of the units are rented to tenants, one unit is where my wife's sister lives, and my wife and I live in an unrecognized basement unit which is technically unrentable because it does not have a second egress point. My wife's parents ultimately want to split all of the units into condos so that they can keep one for my wife's sister and sell us the older building with a chance to buy the third unit in the future. His one sticking point is always having one unit for my wife's sister to live in. Is there a way to avoid splitting the property into condos while putting in the sale agreement that the sister will always be able to live in her one unit? Also her parents are interested in owner financing the deal, but they still owe $170,000. Would we be able to take out a loan to pay off what they owe, and then they finance the remaining balance. Can anyone provide any insight to how we could structure the financing through her parents/the owners? Any help would be greatly appreciated. Dave

David, you're in my area.  I highly recommend Perkins & Anctil in Westford for complex condo law including issues of potential Building/Zoning violations.  The big question is "how many units can this become?"  I know way too many people who have been bit by this snake.  Legal-non-conforming Occupancy  is one thing;  completely illegal is another altogether.  

In the absence of that,  call yourself a "paralegal"with no interest in the property, go to the town, and copy every scrap of paper in the Property's Building, Zoning, and Planning files. (three offices, usually).   Also check Engineering, Board of Health & Conservation.  I don't expect that these offices have anything, but it doesn't hurt to review them.  Then take stock of your allowable uses-- and potential liabilities--  according to the documents.    

PM me if you want more info; I can guide you through the Due Diligence at least.  

@Steve McGovern thanks for the info and I will look into all of that. But my ultimate goal is to not split the property up into condos.

Aah sorry. I misunderstood.   

The answer to your real question lies in the phrase,  "life estate."   Sis lives there for as long as she is alive (or until she requires help.) And you're bound to honor that.  Your Sister's interest is released upon recording of a Death Certificate (or Doctor's affidavit, in the latter case.) 

The covenant runs with the land, so if you NEEDED to sell next year, it would be an encumbrance on your next Owner (thus, significantly reducing your potential consideration.)  

Again, get a lawyer to draw it up.  

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