Dear Edith: In a recent column you replied to a question, "Can someone sell a house without the land? Do they have to mention they are also selling the land?" You said "When you buy real estate, what you buy is land. Anything permanently attached — like a house — comes with it. Deeds that transfer ownership seldom mention buildings anyhow."

Several months ago a Realtor in Maryland informed me that when purchasing a home in Maryland you have to check to make sure it includes the land. Some houses don't come with the land. Apparently the landowner retains ownership of the land and you pay rent to them. The answer to the question should be, it depends on where you are buying a house. — C.S.

Answer: Thanks for taking the time and trouble to write. You're not the only reader who e-mailed about this.

I should have added, "Occasionally what you're buying is a lease to the land. And again, any buildings come with it."

In England, land leases are common. When property like that is put on the market, an important part of the listing information is how many years are left on the lease. There's no point in paying a great deal for property that will revert to the landowner in a few years.

In the state of Hawaii many houses are built on land leased from native Hawaiians. That led to a difficult situation some years ago when many 99-year leases ended. In other states, occasionally homes are built on land leased from native American tribes, and even — particularly vacation property adjoining water — from the state itself.

Foreclosure And Taxes

Dear Ms. Lank: I own two houses, one has gone into foreclosure and the other one will soon. The bank didn't send us any IRS paperwork about the first one. My question is where do I stand with income taxes on these? — P.

Answer: In the past, the government didn't tax you when you received mortgage money, because you were going to pay it back. But later, if a foreclosure auction didn't bring enough to cover the whole debt, the shortfall was taxed as income. Just what you didn't need at that point.

To ease the current mortgage crisis, Congress changed that rule. Forgiven debt on a short sale, or unpaid balance after a foreclosure, is not taxable for 2007 through 2009.

Cash For Keys

Dear Edith: I'm trying to understand "Cash for Keys." Where does Cash for Keys fit into foreclosure? Who offers it and how do they choose who to offer it to? Does it affect your credit? — Via e-mail

Answer: This wouldn't have anything to do with a credit record. Occasionally homeowners who lose their property to foreclosure take out their frustration by tearing out fixtures, stripping copper pipes or leaving piles of junk and old furniture behind. Sometimes they refuse to leave, so that eviction proceedings must be started.

"Cash for Keys" is intended to head off those costly and time-consuming problems. After a foreclosure auction, the new owner, often a bank, offers the unfortunate homeowners money for their cooperation in leaving the property promptly in decent shape — what's known as broom-clean condition. Banks may hire a real estate broker to handle negotiations and supervise the property.

Such an offer could be particularly helpful to tenants, who may be shocked to learn their rented home is in foreclosure and their lease is void. A cash offer from the lender helps with the unexpected move. Depending on local price levels, it generally runs anywhere from a few hundred dollars to a couple of thousand.

Resigned Or Re-Signed

Dear Edith: We bought a home with an in-law apartment intending to put a family member there. The seller resigned the lease with the current renter. Do we have to honor that lease? — Via e-mail

Answer: When I read that the seller "resigned" the lease, I thought you meant the seller had given it up, and that everyone agreed it was no longer in effect.

But I guess that's not it. So if the seller re-signed, renewed the lease, then yes, you must honor it. When you buy property (except at a foreclosure auction) you have the same obligations to the tenant as the former owner did. I hope you received credit at the closing if there was a security deposit, because you would have to return it some day.

Too bad you didn't know enough to ask about a lease, but even so, the seller should have disclosed it. You had a right to know before you made your offer.

You're entitled to receive the property as it was when you made your offer. So, if that was a last-minute lease renewal, consult a lawyer.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

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