'Fiscal cliff' bill addresses some key housing issues

Battle over mortgage interest deduction still to come

BY KEN HARNEY, WEDNESDAY, JANUARY 2, 2013.

Inman News®

The U.S. Capitol image via Shutterstock.

When the monthlong congressional game of chicken known as the "fiscal cliff" ended late last night in the House of Representatives, housing and real estate emerged as winners on most key issues.

The Senate bill that finally passed the House by a 259-167 vote extended a number of federal tax code provisions that are important to homebuyers, sellers, builders and real estate professionals.

The bill also made permanent the Bush-era reduced tax brackets for all but the highest income earners in the country, along with a permanent "patch" to the increasingly troublesome alternative minimum tax (AMT) that threatened millions of middle-income homeowners with higher taxes.

Do your homework before buying a rental

Rent it Right

BY JANET PORTMAN, THURSDAY, DECEMBER 20, 2012.

Inman News®

House under scrutiny 

image via Shutterstock.

Q: We bought a single-family home to use as investment property. The sellers told us that the neighborhood, near a major university, is very popular with students because the rents are reasonable. We went ahead and closed the deal. Now we've discovered that in fact very few students live here (apparently the rents are prohibitive). This has made it very hard to find qualified tenants. Do we have any recourse against the sellers? --Stephen and Catherine

A: When your seller answered your questions about student renters and their ability to afford neighborhood rents, he was making a "representation," in legal lingo. A representation is a statement that is offered as the truth, sometimes couched in "to the best of my knowledge ..."

When a party to a contract makes a representation, it's a big deal -- if it's false or misleading, about a material (important) aspect of the deal, and the other side reasonably relies on it to their detriment, the "representer" is in for some legal trouble.

For example, telling a buyer that there's no problem with the neighbors next door, when in fact the neighbors account for continuous police visits, is a major misrepresentation that, if uncovered, would likely affect the buyer's decision to proceed.