[WSBARP] Short Platt developer and excited buyer

[Robert R. Cole]

see wac 458-61A-108(b)

Very Truly Yours,

Robert R. Cole

Law Office of Cole & Gilday, P.C.

10101 - 270th St. NW

P.O. Box 249

Stanwood, WA 98292

(360) 629-2900 (Telephone)

(360) 629-0220 (Fax)

This message contains confidential and privileged information that is 
intended only for the named recipient(s).Unless you are the named 
recipient or authorized agent thereof, you are prohibited from reading, 
copying, distributing or otherwise disseminating such information.If you 
receive this communication in error, please notify the sender immediately.

On 6/24/2015 10:09 AM, Josh Grant wrote:
> Thanks Jeanne
> Client later advised me that he really didn’t need to borrow on this 
> piece (he has another house he can encumber and he had all but $30,000 
> of what was needed to build his house).  I had another list-mate opine 
> that if there is a clear agreement in the beginning showing that the 
> parties intended to end up with the 5 acres being transferred only, 
> that the REET could get an exemption “to clear title”.  I don’t see 
> how that could be done.  The client will be deeding back 35 acres of 
> greatly improved land with a deed “to clear title”.  and the gift tax 
> could be an issue (but I doubt that the eventual bare lots are going 
> to be that much?).  Interested in anyone’s view of the REET.
> Josh
> *From:* Jeanne Dawes <mailto:jjdawes at goregrewe.com>
> *Sent:* Tuesday, June 23, 2015 3:33 PM
> *To:* WSBA Real Property Listserv <mailto:wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] Short Platt developer and excited buyer
>
> Josh, if I understand correctly the developer is going to deed the 
> entire 40 acres to your client? Sounds dangerous.  In addition to 
> Steve’s comments, there may be some tax consequences, if the value of 
> the property is more than the annual gift tax exemption.  One more 
> thought, the Treasurer will assess REET on the FMV, even if the 
> purchase price is $1.  Additionally, the bank still won’t lend on just 
> part of it, they will want to take the entire 40 as security.  Big 
> problem on the deed back to the developer if it is now subject to a 
> mortgage.    It sounds like a bad idea.
>
> /Jeanne/
>
> */Jeanne J./**//**/Dawes/*
>
> Attorney at Law
>
> Gore & Grewe, P.S.
>
> 103 E. Indiana Avenue, Suite A
>
> Spokane, WA 99207-2317
>
> Voice:  509-326-7500
>
> Fax:      509-326-7503
>
> jjdawes at goregrewe.com <mailto:jjdawes at goregrewe.com>
>
> INFORMATION CONTAINED IN THIS E-MAIL TRANSMISSION IS PRIVILEGED AND 
> CONFIDENTIAL.
>
> *From:*wsbarp-bounces at lists.wsbarppt.com 
> [mailto:wsbarp-bounces at lists.wsbarppt.com] *On Behalf Of *Josh Grant
> *Sent:* Tuesday, June 23, 2015 2:20 PM
> *To:* wsbar
> *Subject:* [WSBARP] Short Platt devloper and excited buyer
>
> Developer is developing a 40 acre piece.  He will be short platting it 
> into 5 acre pieces.  Surveyor is telling him this should be no problem 
> in getting this approved.
>
> My client is a prospective buyer. They have a legal description for 
> his five acres from the surveyor.  He wants to get going with a new 
> house.  I told him, “no, you have to wait til the short plat is 
> approved, for a bunch of legal reasons, but in addition the bank won’t 
> lend you the $250,000 for the new house til you are a fee owner”.
>
> So now the two of them have agreed as follows:
>
> Developer will sell the 40 acres to the client for the agreed upon 
> purchase price of the five acre ($35,000). Developer will continue to 
> pay all costs to get the short plat approved (about a year from now).  
> Developer will be obligated to pay all costs even though client will 
> be signing the applications etc. Developer will be granted an option 
> to purchase the 35 acres back when the short plat is finally approved 
> for $1.00.
>
> Would the 1% excise tax be based on the $35,000 first sale?  
> Probably.  The transfer back of the 35 acres for $1.00 plus all the 
> development costs... what would the excise tax be based on?
>
> I see lots of problems from the developer’s side, but what else would 
> the buyer be exposed to if this never gets approved?
>
> and if this is a doable thing, anyone have forms for the option to 
> purchase ? (yeah right).
>
> Thanks
>
> Josh
>
> Joshua F. Grant, PS
> Attorney at Law
> P. O. Box 619
> Wilbur, WA 99185
> tel 509 647 5578
> fax 509 647 2734
>
> ------------------------------------------------------------------------
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp
>
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20150624/b796dcaf/attachment.html>