I am under contract for a two family house. My mortgage was contingent on the rental income. Now as it comes time to do a Certificate of Occupancy I am being told by the town that the home is considered a one family. Do I have any legal recourse. I have been under contract for 3 months now (they had to remove a oil tank) now my deal may fall apart. It appraised $50000 more than I was going to pay so I thought I had a great deal.It was also appraised as a two family home.
The rights you have will be largely if not exclusively governed by the terms of the contract of sale that you signed. An attorney that practices in real estate should be consulted to review the facts and the contract, and to give you advice on your rights and possible remedies.
Was the house appraised as a two-family home with income potential? If it was appraised as a single family home, then an alternative would be to purchase the home and resell it for a profit.
Please consult an attorney directly before taking action. This answer is intended for general information only and should not be taken as legal advice. My communication with you is not privileged and is not within, or intended to create, an attorney-client relationship. Pursuant to Circular 230 of the Department of Treasury: (1) no written statement to be provided by me relating to any Federal tax transaction or matter is intended to be used, and no such statement can be used, for the purpose of avoiding penalties that may be imposed on the taxpayer, and (2) such written statement may not be used by any person to support the promotion or marketing of or to recommend any Federal tax transaction or matter.
You have alternatives, but make sure you have a lawyer review the contract so you don't miss any options the contract affords you. If the appraisal was based on its actual situation (one family) you have several options, continue and make a profit or move in and enjoy your bargain, see if your contract will allow you to void it, (arguable that a CO for a one family home is not a CO for the two family home you bought), or negotiate the price down again.
This should not be considered legal advice and is intended for educational purposes only. It does not constitute a contract for legal services between any parties. Answers are given to questions for which there may be additional facts not mentioned which might change the legal issues or consequences.
This is why it is important to hire an attorney for real estate transactions. The contract needs to be reviewed by an attorney ASAP.
This is a general answer for informational purposes only. It does not consist of or create an attorney-client relationship. If you require more specific advice, you are advised to formally consult with an attorney.
Years licensed, work experience, education
Peer endorsements, associations, awards
Publications, speaking engagements