Real Estate Law?

[smithers_0990]

Does anybody here know much about real estate law?

I have to write a paper anwering a few questions that have to deal with real estate laws.

I wont write out the problem unless someone knows this stuff.

It has to do with 1031 exchange and a buyer and his wife are buying a house and the husband dies.

Ohh, and they are buying the house in CA.

Anyhelp is greatly appreciated.

 

[Greg S]

DISCLAIMER**** I AM NOT A LAWYER!

There now that that is said. If the husband dies then the wife is the beneficary, CA is a community property state. If the 1031 exchange is being done from existing property to a new one and he dies part way through she is the beneficary and can complete the 1031 exchange as it is still the same assits. Problem will lie when she finally sells of and has to take the capital gains tax at the single tax payer rate.
If the husband died and she is now listed as the sole owner of the property and is using the 1031 exchange rule to purchase a new investment property same thing applies.
Hopefully this covers your question, if not post it and I'll try to sort it out but I haven't actually had to use the 1031 tax rule yet so I don't know everything about it.

 

[smithers_0990]

This is the whole question.

30 Day lock in rate
Prime rate = 5%
Closing in 20 days, (he dies on the third day so 17 days actually left)


Jim is from Wisconsin, he owns a house in WI and rental property in CA. Jim wants to sell the rental property in CA and buy a bigger one (thus the 1031). Bob and Ann want to buy Jims property in CA. Three days into the deal Bob dies.

Can Jim take any legal actions if Ann backs out of the deal?


What other questions could I come up with to give my paper some, ...gusto?
This is for a Credit Law class, that is usually very easy.

Can I use any of this information that you give me in my paper? I gotta ask. I understand your not a lawyer.

Thank you very much for your time.

 

[Greg S]

OK, I understand the question better.
I'd say that yes Ann can back out of the deal due to the fact that the loan, escrow and real estate contract documents will all say Bob and Ann as Husband and Wife. I would suspect that the contract would have a back out clause that states they will buy the property if they can find financing for so much at such and such rate. With Bob dead there goes half, if not all, the income so the loan will not be funded and the purchase will not go through. Ann will likely be out what ever good faith deposit monies she and Bob put in to the escrow but I doubt that there is anything else Jim can do after that.
That wouldbe my understandig of the legal ramifications. On the reality side, Jim could probably sue for breach of contract and try to force Ann to buy the propery, but why bother. It'll cost less money and take less time to find another buyer. He should take the deposit and put it back on the market again.
That's all I can think of off hand, I'm sure there are other things but that is the reality of what would happen. Your lucky, as I am just closing on some investment property here in CA so I have boned up a little on this just recently. It's amazing how much easier finding places and dealing with loan and escrow companies is after the third time. Probably helps that I'm not planning on living in it so there is no emotional attachment.

Oh yeah, yes you can use all this for your papaer.
Good luck.

 

[smithers_0990]

Thanks for the help(cool)