Duplex Question

JimMorrissey · Jan 15, 2005

If a person was to build a duplex on say 3/4 acre....How would the land be divided up? Legally it would need to remain one parcel due to state regulations (ACT 250 in Vermont). Would the land be co-owned? Would the building owners only own the building itself?

What do you see here for ownership possibilites on a single 3/4 acre parcel with two homeowners living on it?

Thanks!

JerryG · Jan 15, 2005

There are several like that around. The owner usually lives on one side and rent the other.

LBrown59 · Jan 16, 2005

Or you could rent out both sides.

PineRidge · Jan 16, 2005

Years back my brother and I purchased a twinplex so that each of our families would have a place to live. As I remember we used our corporation as the owner on the deed, but that was just a fancy way of saying that it was a 50/50 ownership. Naturally when we both decided it was time to sell and move on to greener pastures it took both of our signatures to do so.

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btolle · Jan 16, 2005

I am not familiar with Vermont real estate law, but it should be possible to show the land as being owned by both parties. Each owner would also be the owner of an undivided 1/2 interest in the land.

A good title company lawyer should be able to write the deeds so they comply with state real estate laws. It would be a good idea to consult the attorney before starting construction to be sure that is possible in your state.

You may also want to check building ordinances to see if you will need a "party wall" between the units. This is a wall that goes from foundation to roof with no breaks in it and would most likely be needed to be constructed to be fireproof.

I would also consult with a local real estate agent to see if the local market will support a duplex like that. In other words, will you be able to sell it for a reasonable price some day. In the area where I live (East Texas) it would be a tough sell and the resale value would be low. Land is cheap here so us Texans all want our own plot.

While such an arrangement may be common in your area, I would never buy such a property no matter who owned the other side. They could die and 3 of their children and 8 of their grandchildren could move in and turn it into something out of "Grapes of Wrath". Again, some things like maximum number of occupants may need to be addressed in the deeds to prevent that situation.

DISCLAIMER: I am a licensed Texas Real Estate Salecperson. The above is not to be construed as legal advice. If you are in doubt about any real estate matters consult an attorney before proceeding.

Bill Tolle

DannyD · Jan 16, 2005

in the event of a death of a partner there should be a buyout arrangement predrawn up with the partnership papers etc.

I would not own something like this without a corp behind me. No sense making trouble when it can be handled other ways.

JimMorrissey · Jan 16, 2005

Bill,

Thanks. Yes, I will deal with all professionals prior to any construction. I really was just mulling over the idea, not really intending to dig tomorrow. -Just wanted to get some feedback.

People in Vermont want their own land too, but land is very expensive and fairly hard to find. There are mountains all around and National Forest for miles. It a gorgeous place, but not tons of land....thus the duplex idea. Anyway, I think I've ruled it out. I need to simplify, reduce risk and not make things more confusing and harder to deal with. I'm a one man show.

Thanks for the input.

btolle · Jan 16, 2005

Jim,

I believe in brainstorming but I try to run my brainstorms by some other folks before I spend any money.

The idea of a duplex may still be good but you may want to own the whole thing and forget selling half of it. Depending on the "atmosphere" you might be able to fence half the property and allow the renters to have a big garden, keep a horse, or ???

I used to own a couple of duplexes and I loved them. They were paying for themselves and making me just a few $ a month.

I lived in one and the renter was paying enough to cover the note and my utilities so I lived cheap for a few years.

Finally sold them and a rent house when we moved to East Texas and managed to pay off our house here with the sale proceeds.

Don't give up. Keep tossing ideas out and see where they go.

Bill Tolle

rambler · Jan 26, 2005

A duplex can be a good deal, but needs a lot of legal issues dealt with up front. It becomes a nightmare if one trys to sell each half seperatly. Mostly they only work well as 2 rental units or a owner side / rental side.

If each 1/2 is seperatly owned, the nightmare begins. Lots of smart people would stay far away with such an arrangement.

--->Paul