Settling Probate

If that doesn't produce satisfactory results, then you and your neighbors should consider bringing a lawsuit against the neighbor to abate this private nuisance that is disturbing the neighborhood.

DEAR BOB: My wife and I own a property that contains two rental houses on one lot. To sell the property and avoid capital gains tax, can we occupy one of the houses and still rent out the other one? Or must we occupy and/or not rent both for two years? -- Jon H.

DEAR JON: You and your wife could occupy one of the rental units as your principal residence at least 24 of the last 60 months before selling the property. Then you will avoid capital gains tax apportioned to that unit, up to $500,000 for a married couple filing a joint tax return. If you were single, Internal Revenue Code 121 provides a principal-residence-sale tax exemption up to $250,000.

However, your capital gains tax apportioned to the other rental house will remain taxable. Keeping the other unit vacant won't reduce your capital gains tax on its sale. For more details, please consult a tax adviser.

DEAR BOB: I will soon be buying out my investor co-owner in an apartment building for about $260,000. We are not relatives. We obtained title insurance when we bought the property about six years ago. Do I need title insurance again? -- Herb W.

DEAR HERB: Yes. Always get an owner's title insurance policy when acquiring any property and especially when buying out a co-owner. That's the only way you can be certain you are obtaining marketable title.

There is a possibility your co-owner has unpaid liens -- judgment, income tax, child support or other liens -- that may have attached to the property. Go back to the company that originally insured your title and ask if they have a discounted or "bring down" rate for your situation.

DEAR BOB: The buyer of our home made a quick Internet mortgage application and was declined. I offered to carry back the mortgage for the buyer on exactly the terms stated in the sales contract financing contingency clause. But the buyer refuses and wants to cancel the sale. Am I obligated to refund the buyer's good-faith deposit? -- Mary Ann P.

DEAR MARY ANN: The buyer is obligated to use good faith to remove the contingency clauses in the purchase contract. Applying with just one mortgage lender is clearly insufficient and does not show good faith.

Your offer to carry back the mortgage for the buyer shows financing is available.

However, if the buyer wants to get out of the sale, you might not want to do business with that person. Buyers like that are disgusting.

If I were in your situation, I would have my lawyer write a letter to the buyer giving him the opportunity to clear his breach of contract by either accepting your finance offer or obtaining a mortgage elsewhere.