New York Real Estate Lawyers Blog
We have posted previously about the change of use of properties in the region served by this law firm. Real estate developers may be interested in such properties because they envision a potentially new profitable use for the property, especially if the use changes. For instance, an existing swim club has a dwindling membership base or a nursery business is no longer viable. These obsolete properties have large acreage and could be used for assisted living facilities or multi-family housing. Let’s imagine that an owner of a single-family house is next door or overlooks such a site. It is not hard to believe that the homeowner would not want to live through the rock blasting and noise created by bulldozers and years of construction. Also, the assisted living facility or multi-family housing may change the character of the neighborhood or make it otherwise undesirable to the homeowner. This post will address the options available to such a homeowner.
Usually a developer in this scenario needs to apply to the applicable municipality to request the change of use for the property. There may be valid objections that the neighbors can raise, such as increased traffic and roads that do not accommodate those who will visit and use the facility. If the homeowner does not believe that objecting to zoning changes and the like would be successful or if the homeowner merely wishes to negotiate a deal for himself, there are other options available. One option may be to sell the house to another individual who may not be aware of the potential development of the neighboring property.
Developers who want a particular building site are financially well equipped. If it makes monetary sense, a developer may consider buying the single-family home that stands in the way of his development. If the homeowner is willing to leave his house, he should hire an experienced attorney to negotiate the most favorable terms. The best deal for the homeowner may be to sell the house and to have a qualified attorney include certain provisions in the contract. All seller expenses should also be paid by the developer. These expenses include payment of the seller’s transfer taxes, attorney fee , broker commission and any other costs of the sellers. In addition, the negotiated price should also be high enough to pay off the seller’s mortgage so that the seller is not out-of-pocket at the closing.
The deal could be structured so that the developer pays for the house and the seller uses the funds to buy another property at a future date. Another option would be for the developer to buy a substitute property for the seller. This requires the seller’s involvement so that the replacement property suits his taste and is comparable to the property to be sold to the developer. Should the homeowner be willing to relocate to a less expensive area than New York, the developer’s cost may be reduced. Also, if the new house has real estate taxes or other carrying charges that are significantly higher than those currently paid, financial compensation may be requested from the developer.
Our firm regularly negotiates with developers and homeowners and is available to assist parties as their needs may warrant.