Not necessarily. It is possible to own a house on a rented property. Granted, it’s most common in mobile home parks.
But if you want an extreme example there’s the city of Salamanca, NY. The entire city has been build inside an Indian reservation and the reservation retained ownership of the land. So you can buy a building in Salamanca but you can’t buy the land it’s located on.
That’s the way I’d handle it. I’m assuming I have no extraordinary attachment to that particular piece of land. I’d sell them the lot at a reasonable price and I buy a new lot if I still wanted a piece of land of my own.
Who are you selling the lot to? The homebuilder or the homebuyer? If you’re talking about the homebuyer, why should he have to purchase another lot? He paid to have a house built on his lot. It is up to the builder to fulfill their contract. That poor guy shouldn’t have to buy another lot because the builder fucked up.
That’s what I would do. I just had a $680,000 permanent improvement made to my lot and I don’t want to pay taxes on it. The lawyer would get me a handsome chunk of change for that home, whether from the builder, the sucker who hired them (who really isn’t the “homeowner” because they don’t own the home), or on the open market.
I can’t imagine commisioning a $680k house and never once going to personally inspect the progress during construction and again when completed. The couple just assumed everything would be done correctly and to their specs? That’s a poor assumption even if the house was built on the correct lot!
I would ask for considerably more than fair market value for the lot: clearly, it’s worth much more to the home"owner" than to anyone else.
I don’t know who would legally own the house; I’d have to ask a lawyer. My assumption is, it’s their house on my lot, but I could insist that they move it.
I’d rather have cash than the property anyway.
I agree that it’s the builder, not the homeowner or landowner who is screwed. The builder still owes its customer a $650k house on the correct lot as contracted. Now the builder also has left an unwanted (or at least un-asked for) house on someone else’s property.
They’re gonna need their insurance, because I think they’re going to have to build another house (assuming the first can’t be moved) and then either pay to have the first one demolished or try to sell it to the landowner for whatever he is willing to pay for a house he didn’t ask for.
So – not a free house exactly (the builder would probably rather recover as much material as possible and demolish the rest) but probably a house way, way under market value. But at a cost to the builder, not to the people who wanted the house.
And pay capital gains, etc. Unfortunately (at least in MI) you can’t swap land without tax consequences. You can’t even shift borders: My parents have land that surrounds someone else’s on two sides. Both parties would like to shift the borders one way in an even swap, but to do so they’d have to pay capital gains, with cost basis from 1957.
Determine whose fault it is.
If it’s my fault, keep my head down and my mouth shut.
If it’s someone else’s, sue them to within an inch of their lives.
Several people have mentioned the builder but I don’t see as he’s liable. He was contracted to build a house on a specified location and he did so. I don’t see how it’s his fault that he was given the wrong location. Any liability would seem to be on the house owner or the surveyor.
As for selling the property, I’m selling it to the person who owns the house. They’re the one who has a strong interest in buying the property. If I sell to anyone else, it’s not going to solve the problem other than ending my involvement.
I can see where the house owner will be upset for having to buy my lot when he thought he already owned it. But them’s the breaks. If it was his fault he should be happy I’m willing to sell him the lot at a reasonable price and not hold him over the barrel. If it wasn’t his fault, he can seek reimbursement via a lawsuit against the surveyor or whoever was at fault.
This.
I am finding it utterly mystifying as to how this could happen. We’re putting an addition onto a house - a house my fiancee already owns - and the hoops that had to be jumped through were immense, and her identity is a factor in EVERY element of the transaction. Everything is checked and checked and checked some more.
In my experience, 10x the market price of the property is not all that uncommon for a blown title case. Especially one where the property was damaged.
Call it a fantasy, then; this is a “what if” situation, and the question is what would I want, not what would the law allow.
Anyway, Bear Nenno makes it all clear to me and I would just sit back and wait for the builder to return my lot to its prior condition or to pay me as much as I can get for it.
Put up a sign stating “Any houses left on lot overnight will be towed away at owner’s expense”.
But they have no means to cure title on the property short of a condemnation proceeding. They can’t even rent the home without trespassing.
Regardless if you knew about it, you were harmed when they damaged your property.
They could tear down house, but the numbers don’t make sense. Suppose you own a $100k lot and someone just built a $600k house on it.
First they’ve got to demolish and haul away the above surface structure, they’ll probably want to do it in a manner to preserve as much of the materials as possible this is slow with meticulous labor, say that part cost $250k. Next comes the foundation assuming they didn’t build their McMansion on blocks. That means there’s at least 10’ of steel reinforced concrete in the ground, good luck getting a permit to blast it out in a residential subdivision with gas and water pipes, say the foundation costs another $350k.
Then don’t forget, this is in Florida, which means there’s probably bell holes another 20’ deep underneath the foundation, deeper excavating, by this time the high coastal water table is starting to seep into the giant hole you’ve dug and you’ve got pumps running 24/7 to keep the water out. You can’t just dump that water anywhere, (legally) it’s brackish and contaminated from the demolition site. Nope, it’s got to be disposed of properly. Say all this cost another $350k.
Finally, it’s time to bring in fill dirt and restore the original grade and drainage, $150k.
Tack on an extra $100k for engineering consulting and permitting, and it’s cost a total of $1.1mm to remediate the site.
OR
The property owner walks in and says instead of all that why don’t you just buy my $100k lot for $750k?
Which deal do you take?
The really strange thing is that if I’m understanding the reports, the house was there for six months before anyone realized the mistake. It was another surveyor, doing a separate survey for a completely different sale, who discovered the house was on the wrong lot.
I believe Dave Barry called your problem about remembering things that aren’t important “brain sludge.”
What would happen if the lot owner was an eccentric old coot who absolutely refused to sell? Would they try to pull some adverse possessiony thing on him?
Hang on a sec. Did you just estimate that it would cost $600k to tear down a house and remove a foundation?
Let me guess, you aren’t in the building business.