Real Estate Investing

The adage, “When in doubt, throw it out.” can certainly be applied not just to questionable food in the refrigerator, but also many times to real estate.  For agents and sellers our mantra could be, “When in doubt, throw it out there.”  In other words, disclose disclose disclose.

By disclosing known defects or problems with a home or property IN WRITING, you are protecting yourself, the seller, and the buyers of potential court proceedings.  If there is a sink hole, tell about it. If there had been termites in the past but they were treated and repairs made, disclose it.  If there is a cemetery under the house, disclose it.  Of course, how unlikely is that?  Just ask anyone who’s ever watched the movie Poltergeist.

So the question about a house being used as a meth lab inevitably came up.  Do we disclose if a home for sale had been used for the production of meth?  According to Cookeville, Tennessee’s Herald-Citizen, yes it should be disclosed if the agent is aware of it.

… real estate agents can only disclose that information if they are aware of the problem. It is the property owner’s responsibility to make agents aware of all property defects including the house having been used in the manufacturing of meth. Putnam County Sheriff David K. Andrews said anytime a property is quarantined due to a meth lab the law enforcement agency quarantining that property will file paperwork with the register of deeds stating that the property has been quarantined.

When in doubt, disclose.  Disclose disclose disclose.

Photo by Maveric 2003 via Flickr Creative Commons.

PUDs are one of those weird real estate terms that most people pay no attention to.  But on one of the latest disclosure forms that the state requires to be signed in a real estate transaction, to inform whether a home is located in a PUD is now mandatory.

So what is a PUD, exactly?  According to Wikipedia,

PUDs tend to incorporate single-family residential uses within close proximity to two-family units and multiple-family dwellings to form a larger diversified neighborhood concept. Schools, churches, retirement homes, hospitals, and recreation facilities begin to find their way into residential districts. Residential districts also tend to use the best land in the community and the most favorable sites are protected from commercial and industrial uses.

These Planned Unit Developments are designed to enhance compatible land uses so that housing, recreation, and retail are located within one development.  Sometimes industrial parks are also in the same area.  When I lived in Lexington, Ky. the local government okayed a PUD named Beaumont Center.  Previously a field of waving grass, we heard that up to 20,000 people would live there - a community within a community.  We started to see apartments, then a liquor store and party barn, restaurants, and finally homes began appearing.  Today it is a thriving community with hotels, shopping, a city library, and affordable homes.  I would live there in a heart-beat!

So why would you have to disclose if a home is located in a PUD?  Because the buyer should be informed in advance if there are any restrictive covenants, homeowner bylaws, and master deeds that can impact how they live.  For example, can they have a storage building?  What if they want to have a yard sale?  By disclosing the rules and regulations within the PUD, a buyer comes in with their eyes wide open and this is how it should be on behalf of the buyer and to avoid liability as a Realtor.

So what the PUD. Find out if you’re buying in a PUD!