PAULA'S SOUTHAMPTON BLOG: THINK YOU KNOW ALL THERE IS TO KNOW ABOUT REAL ESTATE?...Think Again!

THINK YOU KNOW ALL THERE IS TO KNOW ABOUT REAL ESTATE?...Think Again!

THINK YOU KNOW ALL THERE IS TO KNOW ABOUT REAL ESTATE?...Think Again!

I hope you have your wits about you at this reading, because the details of this story may be a little "mind bending" for you. I really would like you to take a few minutes and read it though because I need your professional take onA "PUZZLING" EXPERIENCE what you think about this situation I find myself in. If you have any input of value for me, PLEASE leave it in a comment below.

In all my 18 years of Real Estate experiences, I have never witnessed nor have I been a party to a situation like this one:

  • I am in contract to sell my home here in Southampton Village; the buyer is a builder and wanted to break ground before the snow flies. I wanted to close before the January 1, 2013 because of the new capital gains taxes that are going to affect me after the first of the year.
  • We had a scheduled closing to take place in New York City on December 12, 2012. The day before, on December 11, 2012...The buyers attorney gave my lawyer a copy of a "notice of Non-conformance" from the Suffolk County Department of Health, Waste Water Management saying that my lot was not properly subdivided by the owner in 1982. The original property was a narrow and deep .65 acre lot that the owner apparently decided to subdivide. There is a "landlocked" lot between my property and the other lot with the owners residence on it. The landlocked lot is a non-build-able, 5,500 SF lot with the original owner's .29 of an acre lot opening to a short cul de sac street, and .31 of an acre belonging to me, with frontage on another Village street.
  • Because the owner did not report the subdivision to the Board of Health at that time, there was no evidence of a subdivision in the Waste Water Management Department and therefore, they view my lot as "non-conforming". 1981 was when they began to require all lot subdivisions to be reported and approved by the Board of Health. I was told I have been "Living on an illegal lot" when I went to the Deoartment of Health in Yaphank to see what the issue is. This is an on-going problem in Suffolk County because of the lax reporting on the part of most smaller communities here in this County--and most people did not know this had to be reported!
  • I bought the house in 1997 and used a local attorney here in the Village to assist me in the transaction. She works as a partner in a well established firm here. I called her immediately and was met with: "I can't help you with that, Paula--you need to to talk to so-and-so to get that fixed". I was outraged and told her as much but then thought better of continuing the conversation and hung up. I called my lawyer for this deal and he was stumped as to why she would not help me out. By her not doing her due diligence at the time, he tells me he thinks that if she helped me out that would be an admission of "guilt" and her responsibility would be established. She should have known about this lot line problem.
  • How did I get Title Insurance??? How did the bank (banks, because I did re-fi over the years!) allow this property to be financed???

 

When we canceled the closing and before I got an idea of the enormity of the problem, I began the research to clear up WHAT IS GOING ON HERE???the issue so that I could complete the closing and my buyer could go ahead with his plans to tear down the house and begin construction.

NOT SO FAST! What I found out when I delved DEEPLY into the situation hit me like a ton of bricks!

  1. It does not matter to the Board of Health who did the change of lot line in 1982, all they want is to get it officially subdivided and approved by the Department of health for the purpose of making sure there is adequate room for buildings and cesspools on both my lot and the lot of the original owner, including the lot beween.
  2. The owner is no where to be found--this is a second (or more) house for him and he uses it so infrequently that I have not seen him for two years. I left message after message on his home phone here and at his office in New Jersey....No reply. He also has since 1982, built a pool house and a pool on the smaller lot, which in reality makes the two lots he owns now merged into one---you can't have a single and separate lot if you have accessory buildings on one lot and a primary residence on the other; that will automatically merge both lots.
  3. The problem is, he never got building permits for his pool or his pool house, so there is no Certificate of Occupancy for either one....another factor that will drag out my situation for 3-6 months or longer before I can close on the house!!! 
  4. I did get the surveyor who did the new survey for my buyer to do a "lot line" modification which showed the Board of Health that since my lot is contiguous by virtue of only one of the two lot lines of the landlocked lot, that it should not present a problem for me but for the original owner only. They did not accept that as reason enough to dismiss the "non-conformance" and in fact pointed out to me that the cesspool that was there since the house was built in 1926, is in the wrong Place and is not far enough away from the pool---a pool that was already there when I bought the property!!
  5. I sent the other owner a certified letter today, scheduled to reach his office on the 2nd of January, telling him that he needs to address this "Urgent matter" with me immediately!  
  6. Oh, and the buyer did not get my permission to go for Department of health approval to build before we closed...maybe just a minor factor in the story, but ironic to say the very least!

IF YOU HAVE MADE IT TO THIS POINT IN THE STORY, I only have one more request: If you have any knowledge or any experience with dealing with the Board of Health, please comment here?

 

 

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                                     **ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY.  The views expressed herein are my personal views and do not reflect the views of Douglas Elliman Real Estate

 

Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate

Southamtpon Village Real Estate Specialist since 1995;  Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York

Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005

 

Click here to see my Hampton's website to see all my listings; please email me or call me for all your real estate needs in Southampton, Bridgehampton and Watermill:  http://www.elliman.com/paulahathaway

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Comment balloon 26 commentsPaula Hathaway, REALTOR, LBA • January 01 2013 09:16AM

Comments

Wow, you faced many challenges thought the process. They were fortunate to have you on their team. It always make me crazy when I hear someone say, you charge too much. They don't have a clue.

Let's make 2013 the best year ever!

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) over 5 years ago

Paula, this is an unbelievable situation and get a strong team and the right real estate lawyer to make these changes happen...no doubt lawsuits waiting to happen & yes if the builder had done this afterwards you know you would be hauled into court too.  There has to be a brighter day here for you somewhere...best of luck!

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) over 5 years ago

Joe: The public is in the dark about all of this kind of thing and one reason I wanted to put this story out there for others opinions is because it may be read by someone in the county who is facing a similar problem--and I do believe that the "regulation fever" that our government has right now is making life absolutely unbearable for the average person to exist---watch out because I hear it is going to get worse!

...and here's to a fine 2013 indeed!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago

Ginny: I think you hit it on the head; if this had not happened now, it would have come up somewhere down the road and maybe to someone who would be unfamiliar with me and how the issue had nothing to do with my purchase of the property! I always like to turn things around from a negative to a positive--in this case, as hard as it is, I have found the positive! Thank you for your input Ginny!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago

Yikes Paula... looks like there are failures on all levels, from Title company to lawyers to banks. This may be a very sticky subject. I wish you the best of luck, but you will get no help from me unfortunately. 

Posted by Brian Rayl, Active Agent and Co-founder Of Home Value Leads (Home Value Leads) over 5 years ago

Oh gosh. What a mess, Paula.  I'm so sorry about this.  I don't know if this is an advantage or disadvantage that NY is lawyer state (or whatever the term is). 

I'll see if I can consult my dad later this week.  He's semi retired now and practiced mainly in NYC but I'll see if he knows anything.  He used to work w/ a lot of NYC co-ops.  And, he does estates/trusts so deals a lot w/ trying to get in touch w/ the appropriate people.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) over 5 years ago

Paula, first off - you said when you purchased this property you had title insurance? Or just an attorney's opinion? If you have title insurance, a claim needs to be submitted to the agency that issued the owner's policy. If you closed on an attorney's opinion, that attorney will try to avoid you because of possibly getting into legal issues by their failure to find this issue when you purchased, making them liable which they are going to be anyway.

For some reason, this problem was dumped on you to find down the road so you can have the experience of learning more angles when it comes to title issues and health dept issues. You've got the smarts and determination to follow this through. Don't give up, keep the research going and get it resolved. This won't go away and I don't know of any short cuts to help you.

Posted by Carla Harbert, RE/MAX Omega, Brunswick Ohio (Full Time REALTOR in Ohio) over 5 years ago

Seems lika a title matter from beginning (or before) to me.  Why or how the title insurance company issued the policy shouldn't matter at this point, they did.

That's got to be the most messed up piece of land in memory. 

If the pool was there before the cess pool, who permitted the pool?? 
That's just one question that hit me. 

Lots more, but the title insurance company is the one to protect your equity.  No one else is going to give a fig.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 5 years ago

Brian: well, your comment here is helping to get the message out there to others who may have the same problem---from what I hear, there will be many more coming because of the regulatory attitude of the government now...I don't even have a well! I have Town water!

Debbie: You are such a good person! This has been hellish for me and to hear that there may be someone who has a sense of what I am going through is comforting to say the least...I know I have to go through this---but it is nice to see others care what happens!

Carla: I am already at the point where I can see that I have to go through a subdivision whether or not I was involved with the process in 1982! This is the kind of nightmare that I see will happen to others now. I wanted to gett his story out there for others to see they are not alone if they have this going on now...the other thing is to forewarn others so that they check out their own lot lines to make sure they are all conforming to the laws.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago

Lenn: Thank you for that bit of information. I will check into that avenue; in fact my attorney has said that he will checking that out but he wants to see how the Dept of Health views my pleas for dismissal. I have a nephew who is talking to the head of the Department of Health and he will meet with him tomorrow at some point. Paul (my nephew) is a "hot shot" Managing Director at Citi in New York and he is outraged that this has halted the much needed sale of my house. He has been hands-on since the start of all of this but he is in finance not politics....This is something else, is it not??

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago
This is about as ugly as it gets and will require a long time to fix. Happens all the time in Miami if its any consolation. Immigrants come in and do whatever they want to a home without a permit or licensed contractor and this is end result.
Posted by Morris Massre, Real Estate Instructor Broward County Florida over 5 years ago

Morris: I guess it does happen everywhere--but how often does it happen to a real estate agent?? I have been so upset by the idea that this came out of nowhere--hit me the day BEFORE my closing and it will set me back significantly for the foreseeable future. I need to make sure that the public is aware of these "silent" deal killers...I had no idea that this man who is my neighbor was so careless in his real estate dealings.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago

I wish I had advice to offer, but I don't.  Except that eventually this will work out and as Ginny mentioned, if this would have been discovered AFTER the sale, you would be in a worse situation (yes, that is possible), so I can see a small silver lining.  I have never had to work with the Board of Health in a real estate transaction - we don't have cesspools, we have septic systems and they are run through the Sewage Inforcement Officer of each township area.  Please let us know how this works out.  Hopefully you will get this solved in 2013! 

Posted by Joy Daniels (Joy Daniels Real Estate Group, Ltd.) over 5 years ago

Paula, no advice here, just sympathy.  And I agree, the regulations that our government(s) have put us under has become a heavy burden.  Your area of the country is one of the worse I've seen outside of California.  I am so sorry you are having to go through this.  My prayers are with you.

Posted by Lynn Pruitt (Keller Williams Lanier Partners) over 5 years ago

Joy: I certainly hope so! In the last week I have seen so many people step back and say "Whoa!" how can that be??? Well it can be and as you say, it could have been worse!!

Lynn: Thank you Lynn--I have taken a deep breath and now am in the mode to take care of it and get it done! I also foresee possible litgation coming--my buyer is very unhappy that he can not close when he thought he could. He may even walk as a result of this!

 

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago

Paula-Quite a way to begin the new year. I think the advice you've been given regarding pursuing the Title Insurance is the way to go. I try to avoid being litigious, but the attorney who helped you in 1997 bears some scrutiny, and maybe a rap on the knuckles (figuratively of course).

Posted by Wayne Johnson, San Antonio REALTOR, San Antonio Homes For Sale (Coldwell Banker D'Ann Harper REALTORS®) over 5 years ago

Yikes... what an ordeal!  Paula, one thing this is shown us, is that whenever there are attorneys involved in the real estate process, there is still NO guarantee that issues of this nature are even discovered until way after the fact!  There appears to be many entities to blame here for this to have NOT been handled years before.  A very frustrating situation for you!

Posted by Dan Hopper, Denver Realtor / Author / Advocate/Short Sale (Keller Williams Realty Downtown LLC) over 5 years ago

Wow Paula, wish I had a solution for you, it appears you are going down the right path, really hope someone can be held responsible for the neglect that put you in this spot.  

Posted by Kathy Stoltman, Ventura County Real Estate Consultant 805-746-1793 (Rockwood Realty) over 5 years ago

Wayne: I agree; I stil have her voice in my ear--telling me "I can't help you" as I was freaking out about the news!!! She took that position and there was no changing her mind. That was very telling!

Dan: ..yes Dan and it makes me wonder if I will be able to get any restitution because of the "Buyer beware" slogan that this same attorney threw at me years ago!

Kathy: I am going to keep a positive thought and hope that I do get some re-imbursement for the huge costs--it si not cheap to subdivide a piece of property....especailly when it is not even your property!!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago

Good lord, Paula!  I would be very nervous right now if I were your first lawyer who suddenly can't help.  This is an interesting example of how incredibly complicated real estate transactions can become.  And I guess the bottom line, is this another situation where a title insurance company will have to be forced by a lawsuit to take care of this.

But back to lawyer Number One, and my guerilla advocacy background coming through.

Lawyers are probably less afraid of being sued than they are of having a formal complaint fiiled with their local regulators, and particularly the Bar Association.  A hint of intention to file a complaint would probably really get her attention. 

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 5 years ago

Patricia: That's is exactly what I have begun to research---how will it affect me if I do file against her; since I am in the business and even though I have not used her since that transaction, she still has influence in this small community. I have had others say the same thing to me about filing a complaint too so I may do just that!

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago

WOW Paula, it's unreal how Title Co issued Title Insurance in the first place. Not to point fingers to Title Company or the first lawyer who handled the transaction but they have to take some responsibility for their actions. Unfortunately it does happen in my area from time to time, especially in rural areas with homes 5+ acres. It is the title company's responsibility to pay for the damages here in FL. Wishing you the best of luck!

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) over 5 years ago

You might want to read your policy to make sure that any action you take would not void your title inxurance policy. 

There's no reason you couldn't pursue both actions at the same time.

No one would be able to hide, including an incompetent attorney.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 5 years ago

Beth: Well, I guess you could say this is what Title Insurance insures one title against...I will find out though and see what comes of it.

Thanks Lenn--that sounds like good advice. I'm not sure if my current attorney has dealt with this sort of thing before but since the holidays interfered with the whole thing it has been hard to keep a flow of information with him. I have known my current attorney for years and he has been very helpful in the past. I guess I will find out from him tomorrow if he has ever handled a title issue before. I agree that the first attorney should be very nervous about this. It is a small community here too so taking on a major lawsuit with the local attorneys is going to be difficult at best. I do think I will seek council from a litigator first before I put forward a plan.

Posted by Paula Hathaway, REALTOR, LBA, ...The Most Informed Agent In The Hamptons! (Douglas Elliman Real Estate) over 5 years ago

Wow that is one heck of a challenge, I have delt with a couple of properties that were landlocked but no tlike this. I imagine you will find that the pool was done without any one knowing and with the rule changes it was perhaps grandfathered in.

Posted by Charles Stallions Property Manager, Pensacola, Pace & Gulf Breeze Property Management (Charles Stallions Real Estate Services) over 5 years ago

Paula  Similar situation but I was not the owner nor will I go into it...this is your show.  What I can tell you is you will become an expert after this is over.  In my situation an investor had been to every Realtor in town and got no satisfaction.  He walked into my office starting our conversation with "I know you can't help me but I've been to everyone else and I know you are new but...." 

I have always had the attitude of "GET IT DONE" and accepted this one head on.  It involved a bankruptcy, foreclosure and a cash buyer.  I spent 24 hours talking to every title company and lender in the area with everyone saying "Won't touch it!" 

Long story short, I closed it in 72 hours.  I got my reputation from that transaction and proud of it.  I am proud of making the tough ones work.

YOU WILL learn from this and be better and more professional for it.  Never stop asking "What will and how to resolve this?"  Someone has the power and it does have to be resolved.

Thanks for the inspiration you have given me this past year...thanks for all you do!

Posted by John G. Johnston, An Exclusive Buyer's Agent ~ Westcliffe, CO (John G. Johnston & Associates, LLC) over 5 years ago

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