Q. DEAR BOB: Thank you for helping us find our house, which we bought in April 1997. Over two years ago, you wrote an article about the benefits of lease-options for home buyers and sellers. Since we were "cash challenged" at the time, my husband and I tried a lease-option.

First, we ran a classified newspaper ad for two weeks: "Executive and family want 3 BR, 2 BA house on two-year lease with option to buy." We received four calls, but the houses were dumps. Next, we followed your suggestion to read the "houses for rent" classified ads. We inspected about 10 houses before finding one we wanted to buy on a lease with option to purchase. The owner said he had tried unsuccessfully to sell the house, so he decided to rent it. We offered him $3,000 nonrefundable option money instead of a security deposit, and he and his wife agreed to our lease-option.

We paid $1,200 a month rent and they gave us a $400-per-month rent credit toward the purchase price. After two years, we used our rent credit and borrowed on our credit cards for a down payment. As you predicted, we had a little trouble finding a mortgage lender, but a sharp mortgage broker got us an adjustable mortgage. Without a lease-option, we wouldn't own our home today.--Marcie H.

A. DEAR MARCIE: Thank you for sharing that lease-option success story. My similar experiences have shown that many owners who advertise their houses and condominiums for rent would really prefer to sell.

A lease-option, with a rent credit of at least 33 percent, is good for both buyer and seller. Lease-option tenants like you usually treat the house as if they already owned it, often making substantial improvements, such as painting and installing new carpets, and causing no trouble for the owners.

I bought my current residence on a lease-option, with a $10,000 nonrefundable deposit to the sellers. My biggest obstacle was the real estate agents, who were worried about their commission. But after the agents saw the lease-option benefits, they became enthusiastic and earned their full commissions in about six months, when I exercised my purchase option.

My buyer's agent also got the listing on my former residence, earning another commission. Although the seller-husband was a bit difficult, his wife saw the lease-option benefits since they had been unable to sell their former residence for six months.

DEAR BOB: I inherited a lot that can't be built on, and I am paying property taxes and maintenance fees. I tried selling it, but the many responses all fell through. I have called the state and county governments for advice, but no one can help. I don't want to ruin my credit ratings by letting the lot revert to the IRS. Help me get rid of this lot.--Deane McC.

DEAR DEANE: Why can't the lot be built on? If it is undersized, ask the local planning commission or city council for a variance. However, if the cause cannot be solved, such as not having water in a rural area, it may be time to abandon the lot. Stopping property-tax payments will eventually result in loss of the lot by a tax sale.

Contrary to what you think, the IRS will not wind up owning the property. It will eventually go to the high bidder at the local tax collector's sale for unpaid property taxes.

As for your credit rating, unfortunately some credit bureaus report unpaid property taxes on credit reports; others do not. Consult a local real estate lawyer about deeding the property out of your name so this doesn't happen to you.

DEAR BOB: Eighteen years ago we bought a lot in an Arkansas retirement community, but the value has declined and the property tax has increased. A few years ago we paid a local real estate agent $500 to list our $7,000 lot for sale, but he didn't offer much hope. How can we get rid of this lot, which costs us $169 a year in taxes?--Carolyn G.

DEAR CAROLYN: Stop paying the property taxes. Eventually the county will take over and sell your property for unpaid property taxes. However, there is a slight risk that the unpaid taxes may show up on your credit reports since some counties report to the credit bureaus.

DEAR BOB: For more than 20 years, my brother and I have owned 96 acres of land, including a house, given to us by our parents. After repairing the house at great expense, we rented it in late 1998. A developer wants to buy the property, and we want to sell. Can I buy a vacation home with my half of the proceeds without paying tax? Or can I use the money to pay off my principal-residence mortgage? Can I make a tax-deferred exchange?--Gary A.

DEAR GARY: You can make a tax-deferred exchange for your half of that investment or business property for another such property. However, you cannot make a tax-deferred exchange for a personal-use vacation home or to pay down your home mortgage.

But you can use the proceeds to buy a rental house, which you can later--after at least a year--use personally as a vacation home. Consult a tax adviser to work out the details.

DEAR BOB: We are investors and own a single-family house in a subdivision that has a homeowners association. The association has put together a new set of laws dictating rental rules. These rules say a buyer must live in the house at least a year before renting to a tenant. Another rule says that when the tenant moves out, the owner must live in the house at least three months before renting to another tenant. Can the association do this?--Nancy and Ludger K.

DEAR NANCY AND LUDGER: Those homeowner association rules are shocking. To be enforceable as conditions, covenants and restrictions, those changes must be voted on by the members of the homeowners association. Just a vote of the association's board of directors usually is not sufficient. Consult a local real estate lawyer, perhaps to obtain an injunction against enforcement.

DEAR BOB: My condominium association's board of directors won't enforce the rules. Some renters store their large boat in the garage and haul it out on weekends around 4 a.m., thus disturbing at least four households. This tenant and his wife also use one or two parking spaces in our "guest only" parking area.

I am 76 and have lived in my condo about 10 years. I cannot afford to hire a lawyer. What can be done to make absentee landlords realize their tenants should be considerate of others? I have asked these tenants to store their large boat, and the truck used to haul it, off the premises, but they refuse. What can I do?--Yvonne H.

DEAR YVONNE: Your situation shows why the best condo associations have conditions, covenants and restrictions and rules limiting or prohibiting rentals. As you discovered, renters are not the same as owner-occupants. I own a condo second home where rentals and pets are prohibited. As a result, buyers are on a waiting list for units in our desirable complex.

Your cheapest alternative is to politely ask the condo association board of directors to enforce the rules against residents parking in the guest spaces. If the renters are violating the regulations by parking the boat on the premises, the owner of their unit can usually be fined by the condo association. If necessary, such fines can be enforced by recording a lien against the condo.

Have you politely written or phoned the absentee landlord to ask for cooperation? That may be the best approach. If that and an appeal to the condo board fail, hiring an lawyer to take legal action against the tenants and their landlord would be the appropriate next step.

DEAR BOB: About five years ago, we built our custom home on an individual lot. Eight other custom houses also were built in the area. Since then a local builder bought the other lots in the development and a subdivision was formed.

Now a homeowners association is billing us for homeowner's dues. Since the home builder took over, the streets have been poorly maintained and storage buildings have been allowed. These things lower the value of our custom home. The eight of us who built custom houses refuse to join the association and are not paying dues. Can we be forced to join?--Maria O.

DEAR MARIA: Unless your property is subject to recorded covenants, conditions and restrictions that require you to pay dues to the homeowners association, you cannot be forced to pay dues. The situation you describe shows what can happen to early home buyers in a new development. For further details, consult a local real estate lawyer.

DEAR BOB: Recently you wrote about canceling private mortgage insurance, but what about canceling FHA insurance? My husband and I bought our house using an FHA home loan. Several months ago I phoned our lender and asked when we would qualify to have the FHA mortgage insurance canceled.

We were told that if we kept making our additional payments toward principal, we should have the required 20 percent of principal paid off by the end of the year. Last week I phoned again to verify the information and was told our FHA loan insurance cannot be canceled.

Can't the bank see we are not a risk for defaulting on our FHA mortgage? We plan to have our FHA mortgage paid off in seven more years.--Sue G.

DEAR SUE: PMI applies to conventional home loans exceeding 80 percent loan-to-value. After a PMI loan's balance drops below 80 percent, most lenders will cancel the PMI premiums, a substantial monthly savings.

Technically, your FHA lender can cancel your FHA mortgage insurance at any time, but most FHA lenders refuse to do so because the FHA insurance provides them with protection in case of borrower default. There is nothing you can do to force your FHA lender to cancel your FHA insurance premium. You were given bad information.

DEAR BOB: I recently had a survey done for a house I own. It's in an older neighborhood, and many fences there are not built on the lot boundaries. The boundary markers left by my surveyor show that part of my lot, about 9 feet by 30 feet, is enclosed by a neighbor's fence.

Luckily, his yard is undeveloped weeds and grass. I would like to move the fence to the correct boundary line, but I'm not looking forward to what may be a confrontational meeting with my neighbor. I will start with diplomacy, but what should I do if my neighbor does not consent to this change? How much authority do the surveyor markings give me?--Steve McK.

DEAR STEVE: Circumstances like yours are quite common. My neighbors across the street just went through a similar situation. If I were your neighbor, I would question the survey. He might want to have his own survey performed. If your surveyor was wrong and you build a new fence on your neighbor's land, you could be liable for damages.

However, if your survey is correct, as I understand your letter, the fence is on your land. Therefore, it is your fence, and you are entitled to remove it and to build a new fence at the correct lot boundary. Consult a local real estate lawyer for details.

DEAR BOB: I inherited a house in a distant city. It is run-down and needs improvements, which I cannot afford. I talked with a nearby real estate agent about listing it for sale "as is," but she said I can't do that. She says I must make the repairs. Is this true?--Vern W.

DEAR VERN: No. To avoid a lawsuit, you must disclose known defects in the house to prospective buyers, including building code violations, but in most places you can sell the house "as is." That means you won't pay for repairs. However, a few cities have ordinances requiring repairs of hazardous conditions before sale.

Interview at least three successful real estate agents who are interested in listing that house for sale. They can show you how to sell it "as is" without making major repairs you can't afford. If there are dangerous building code violations that must be corrected, those can be repaired using the money you'll receive from the sale.

DEAR BOB: I want to sell my house without a realty agent. How can I list it in the local multiple listing service?--Breen H.

DEAR BREEN: The multiple listing service is available only to member real estate brokers and agents. It is the most powerful marketing tool available, but it is not open to the public.

DEAR BOB: For more than 50 years our neighbors, who were like family to us, used our driveway--with our permission--to access the main road. They had enough land to build their own road, but not enough money. Last December the surviving neighbor died.

We are in our eighties and want to sell our property, but the neighbor's heirs claim the driveway is theirs to use by prescriptive easement. When they sell the property, which is now on the market, they claim the new owners can use our driveway.

After reading your recent article about easements, we consulted an attorney, but he's uncertain about prescriptive easement details. The heirs' attorney says they will tow our car from our driveway if we block it. Does this mean that because we gave permission to the neighbors all those years, they now have a prescriptive easement to use our driveway forever?--Jean R.

DEAR JEAN: No. Consult a local lawyer who specializes in real estate law. A prescriptive easement can arise only by open, notorious and hostile use without the property owner's permission. Long use of another's property with the owner's permission cannot become a prescriptive easement. For example, a longtime tenant's use of a landlord's property with permission cannot constitute a prescriptive easement.

Your legal solution is to bring a quiet title lawsuit in court against the heirs who claim a prescriptive easement. If they cannot prove that the deceased's use of your driveway was open, notorious and hostile for the required number of years in your state, they lose. You can then block their continued use of your driveway by constructing a fence, for example.

If you're in a confrontational mood before going to court, you could block the driveway, but be prepared for trouble. If the heirs tow your car from your driveway, as threatened by their lawyer, they could be criminally prosecuted for grand theft. If you revoke the permissive driveway use, and they continue to use your property, they could be arrested for trespass. I presume you don't want these confrontations, in which case a quiet title lawsuit is a better solution.

DEAR BOB: A year ago my husband and I bought our house. It has a conventional mortgage of about $50,000. We are both older than 75 and we wanted to add our unmarried daughter to the title.

The lender said she couldn't qualify on the loan papers, but we added her to the title anyway. When we die, we want to be sure the house goes to her. I hope we didn't get our daughter in trouble. Should we tell the lender that we added her to the title even though she couldn't qualify for a mortgage?--Gloria S.

DEAR GLORIA: Stop worrying. As long as the mortgage payments are current and you, the original borrowers, still hold title, the lender doesn't care. Even though you technically violated the mortgage-due-on-sale clause by adding your daughter to the title without the lender's permission, the lender probably won't hassle you if the payments are current.

However, I'm concerned about how you, your husband and your daughter hold title. Is it in joint tenancy with right of survivorship? Or do you have it in a living trust? I hope you've chosen one of these methods because both will avoid probate.

If you hold title by another method, such as tenants in common, consult a local real estate lawyer about the adverse consequences and straighten the title out now, before someone dies, to avoid probate costs and delays later.

DEAR BOB: About eight years ago my employer transferred me to New Jersey. Because of her job, my wife could not relocate. So we bought a condominium near my job where I stayed four nights a week, and I returned home on weekends.

I retired in late 1998 and am now profitably selling the condo. Will my four nights a week for more than seven years qualify me for the $250,000 exemption on the condo sale?--Charles B.

DEAR CHARLES: Your situation is so unusual that nobody knows the answer for sure. Internal Revenue Code 121 says that to qualify for the $250,000 home-sale tax exemption, your aggregate ownership and occupancy of the principal residence must be at least two years out of the five years before the sale.

It appears that you qualify; however, an IRS auditor could argue the condo was not your "principal" residence. But your response would be that it was your primary residence for the required "aggregate" two years out of the five years before the sale. For more details, consult a tax adviser.

DEAR BOB: I often see the TV infomercials for Carleton Sheets, who sells books and tapes about real estate investing. I've watched his shows for several years, and they're fascinating.

Is he for real? What do you think of him? Should I buy his books and tapes?--Albert S.

DEAR ALBERT: Not a week goes by when I do not receive questions similar to yours about Carleton Sheets. He has been advertising on television for at least 15 years.

I've received so many letters about his materials that I bought them, read them and listened to his tapes. They are excellent. I can't find any fault, except perhaps that he makes real estate investing sound a bit too easy. But his techniques are practical and realistic.

Last November, during a visit to Sarasota, Fla., I took Carleton Sheets to dinner with a group of real estate investors. We were favorably impressed with him. I can't find any reason not to recommend his books and tapes.

Readers with questions should write Robert J. Bruss at P.O. Box 280038, San Francisco, Calif. 94128.{copy} 1999, Tribune Media Services Inc.