ARTICLES & NEWS

HOME CONSTRUCTION ARTICLES

small pool

Mediation and Arbitration, Not Litigation, Can Settle Many Disputes

By Christopher Combs | October 18, 2020

Question: At the time that we purchased our new Gilbert home six months ago, our landscaping plan provided for a swimming pool in the backyard. We now have the money to build the swimming pool. Due to an incorrect survey by our homebuilder, however, the boundary wall between our home and our neighbor’s home is in the wrong location. The boundary wall now has to be moved ten feet further into our backyard, and we can now only build a “large bathtub” in our backyard. Our homebuilder has refused to take any responsibility for the loss in value to our…

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homebuild and blueprint

Home Builders Require Mediation And Arbitration

By Christopher Combs | August 2, 2020

Question: We signed the builder’s purchase contract to buy a new home in the San Tan Valley. The builder’s sales agent made numerous false statements, especially in regard to the upgrades that were available in the home. The “bottom line” is that we canceled the purchase contract and demanded our $20,000 earnest money back. The builder refuses to give the $20,000 earnest money back to us. In addition, the builder demands reimbursement for the $28,000 cost of upgrades that the builder says are worthless to any new buyer of the home. Under the builder’s purchase contract we are required to…

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Garage

Confirm Not Only Permit Issued But Construction Completed

By Christopher Combs | June 21, 2020

Question: When we purchased our East Valley home, the Seller’s Property Disclosure Statement (“SPDS”), line 150, said that there was a permit from the City of Chandler for the construction of the 2,000-square-foot detached garage. The SPDS, line 155, said that the detached garage had been “completed.” We want to use this detached garage for our collector cars and for an art studio. We recently learned, however, that although a permit from the City of Chandler was granted to build the detached garage, there was never a certificate of completion for the detached garage from the City of Chandler. For…

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Baby room

Son Entitled to Appreciation in Home’s New Value

By Christopher Combs | May 3, 2020

Question: My son and his girlfriend bought a home in North Phoenix three years ago as tenants in common. They each contributed $15,000 for the down payment, and my understanding is that they have been splitting the monthly mortgage payments and other home expenses. Last year they had a baby, and they needed another bedroom. We loaned our son $20,000 to add on a bedroom. Although my son and his girlfriend are happy now, what happens if they break up and have to sell the home? Will my son get back from the proceeds the $20,000 cost of the bedroom…

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handshake deal

Documentation Necessary if Building Home with Next-Door Neighbor

By Christopher Combs | March 29, 2020

Question: My next-door neighbor has a construction background. I can get construction financing. We want to buy an old home in downtown Glendale, and do a “scrape and build,” i.e., tear the old home down and build a new home. My next-door neighbor is fine with a “handshake” deal. In other words, everything would be in my name to get the construction financing and we would split the profits after we sell the new home. What are your thoughts? Answer: Not good thoughts! In every business relationship, and especially in a business relationship with a neighbor or a family member,…

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Community Center

Developer Has Sold the Community Center

By Christopher Combs | March 22, 2020

Question: We purchased our new home in a Chandler subdivision six years ago. At the time of our purchase we received a brochure from the homebuilder stating that one of the benefits of our purchase was the community center which could be used for recreational and social activities. After all of the homes in the subdivision were sold by the developer, the developer deeded the community center to the owner of an adjoining golf course for a golf maintenance building. I always thought that, if the homebuilder’s brochure stated that a certain item such as a brand name microwave would…

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1031 exchange

Restrictions Apply on Tax-Free Deferred Exchange of Homes

By Christopher Combs | March 8, 2020

Question: Ten years ago after the “crash” we bought a rental home in North Phoenix. This rental home has appreciated in value by $200,000 in the last ten years. We now want to sell this North Phoenix home, and to use the $200,000 sale proceeds to build a home in Chandler as our personal residence. We do not want to pay any tax on the $200,000 capital gain on the sale of the North Phoenix home. Can we use a section 1031 tax-free deferred exchange to sell the North Phoenix home and use these $200,000 sale proceeds to build our…

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Construction loan

“Walking Away” From Construction Disaster

By Christopher Combs | February 23, 2020

Question: In 2016 we bought a lot for $40,000 in Camp Verde to build a summer home. Last summer we got a construction loan for $280,000. This $280,000 construction loan was secured by the lot and by the home to be constructed on the lot. During construction of the home, however, heavy rains caused the foundation to sink and the partially built home to collapse. Almost all of the $280,000 loan had been used for the construction of the home. Our contractor has no insurance and our insurance company has denied coverage because we didn’t go to Camp Verde to…

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