Q. We are moving my dad into assisted living and he wants to keep his house for now. The assisted living folks are saying that he needs to rescind his Principal Residence Exemption (Homestead) for property taxes because he’s not living there. Can he keep the Principle Residence Exemption on his house so the property taxes don’t go up?
A. Yes he can. I see this wrong advice given often from assisted living and nursing homes. According to the Michigan Association of Realtors Legal Counsel the general property tax act provides the following: A person who previously occupied property as his or her principal residence but now resides in a nursing home or assisted living facility may retain an exemption on that property if the owner satisfies all of the following conditions: (1) The owner continues to own that property while residing in the nursing home or assisted living facility. (2) The owner has not established a new principal residence. (3) The owner maintains or provides for the maintenance of that property while residing in the nursing home or assisted living facility. (4) That property is not occupied, is not leased, and is not used for any business or commercial purpose. MCL 211.7cc(5). As always consult an attorney regarding legal matters.
Q. I am buying a condo for the first time (I guess that makes me a newbie). On one of the forms I signed was a Condominium Addendum and it listed a Reserve Fund. What exactly it is that?
A. It’s been a few years since I addressed this but it is always good information for those new to the condominium buying process. A Reserve Fund is also known as Condominium Association Funds and referred to as the following; reserve account, capital expenditure reserve, working capital deposit, initial operating deposit, Seller’s equity in Condominium Association Funds, rainy day fund, or any other funds collected in excess of the monthly Association dues. I know that it sounds like a lot, but here is the easy to understand explanation. A Reserve Fund is an account maintained to provide funds for anticipated expenditures required to maintain a building or property. A Replacement Reserve may be maintained to provide for replacement cost of short lived maintenance items; such as roofs, roads, exterior painting etc… So let’s say that the monthly association fee is $225. After grass cutting, fertilization, snow removal, trash pick up, insurance etc. is paid each and every month there may be $30 left over each month per owner that goes into the reserve fund for future maintenance expenses. (This is given as an example only; your association may have a minimum amount that must be maintained in the reserve fund).
Market Update
It’s Déjà vu for Macomb County and Oakland County’s housing market; inventory way down and prices up. February’s median sales prices continued an upward trend. In Macomb County prices were up by more than 16% and Oakland County prices were up by more than 10%. February’s residential home/condo on market inventory continued to drop. Macomb County’s on market inventory fell by more than 37% and Oakland County’s on market inventory fell by more than 32%. Average days on market continued its downward trend. (All comparisons are month to month, year to year.)
Steve Meyers is a Real Estate Agent/Realtor at RE/MAX Metropolitan located in Shelby Twp. Michigan and is a member of the RE/MAX Hall of Fame. He can be contacted with questions at 586-997-5480 (voicemail) or email him at Steve@AnswersToRealEstateQuestions.com You can also visit his website: www.AnswersToRealEstateQuestions.com