Neighbor Nightmare

WMA89August 8, 2011

We've spent three months and about $10K getting our house ready for the market. Just as we were winding up the projects and lining up realtors to interview, we saw moving vans across the street and watched the neighbors unexpectedly move out. This was very surprising as there was no for sale sign nor was their house listed on the MLS sites. Several days after they moved out, new people began moving in. When we began to notice lots of different vehicles in the driveway and young adults going in and out of the house, we made some calls that confirmed the worst--they rented their house to college students!

One of the biggest selling points for our house is the neighborhood--it's considered exclusive and desired for the peace and quiet as well as the large, custom built executive homes. The house being rented has 11 rooms, including 6 bedrooms and a finished basement. We found out that the owners are renting the house on a room by room basis. They are advertising it through the residential life department of a local university. They are marketing the property to college students.

We immediately contacted other neighbors, and consulted with the city. They clearly appear to be violating the zoning laws and the city has begun an investigation. But the owners (who are living out of state) are not going to do anything about this (they insist it is within their right) until they have to. So it could take months to get this legally resolved and the students evicted.

I can't imagine anyone buying our house while this situation is going on across the street. The driveway is filled with cars that come and go all day and night. Unfortunately, we already bought another house about 50 miles away and need to get our kids started in school there in a few weeks.

Should we move forward with listing the house? My husband thinks we should. I'm afraid that our property will be tainted because of the "frat" house (the house is in clear view from our front yard) and end up sitting no matter how aggressively we price it. We lose lots of money if the house sits while we wait and hope this situation resolves, but we could stand to lose even more if we try to sell now. What would you do???

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That is truly a nightmare! I have no advice except to consult an attorney familiar with your area. Maybe you can call the police stating they are 'disturbing the peace' and get your neighbors to do the same. This could possibly speed up the City to do something fast.

I feel for you, what a terrible thing to happen. Good luck,


    Bookmark   August 8, 2011 at 11:30PM
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A home that is designated as a single family that is being rented out as a rooming house probably also violates fire code, so a call to the Fire Marshall may help speed things along.

In addition,if they have a mortgage on the house, their lender probably would also have an issue with will their home owners insurance company. You can usually find the lender in the county records. If the owners know that their lender will be told, that may motivate them to do something sooner than later as this could negate the homeowners insurance, leaving the lender holding the bag in the event of a fire...which is of course more likely under these circumstances.

Also, call the city every day and make a nuisance of yourself on this. The squeakiest wheel is the one that gets the oil

Hope this helps.

    Bookmark   August 9, 2011 at 1:07AM
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My parents live in a college town & faced this same issue. Somebody figured out a few years ago that its much cheaper in their area for parents of one student to buy a house & rent rooms than it is to live in a dorm. Street parking was the main issue. Various neighborhoods banded together with petitions & the city now has a law that no more than 2 unrelated people can live in single family housing or something like that. Of course it was no help in the short-term as current owners were "grandfathered" in, but the future looks good because it's a really nice neighborhood & too costly for just 2 students to split.

Luckily, their University is a more conservative school & except for football weekends, the students are a pretty serious lot. The plus side is that my Mom, in her early 80's, meets lots of nice kids on her walks & she likes hearing about what is "going on" - haha!

    Bookmark   August 9, 2011 at 3:53AM
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Interesting thread, because one of the most desirable and expensive neighbourhoods in Ottawa is a mix of owners in renovated older homes ($700,000+) and student renters (University nearby). We rented there for 3 years and loved it - the diversity & neighbourly friendliness was wonderful. The only reason we didn't buy there was that it was way too expensive. Maybe the "quality" of the student renters depends on the university?

    Bookmark   August 9, 2011 at 7:12AM
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logic, you are exactly right--they are operating a single family dwelling as a rooming house but without the license or permit. The rep I've been dealing with from the city has notified all relevant departments-including the fire chief. They'll be involved with the inspection. Unfortunately, a couple of the key people are on vacation for two weeks so everything's delayed right now.

Thanks for the tip about the mortgage and insurance. Never thought of that.
I can't understand why they don't realize the financial implications of doing this.

To clarify--we are located in a fairly small subdivision in a rural residential zone. The only type of housing allowed anywhere in this zone is single family--no duplexes, condos, apartments, etc. It's not a "university town" where students live among professors, academics, locals, etc. It's a state "party school" that is being expanded and there is a campus housing shortage. There have been many problems over the years when students rent in town--condemned buildings, fires, etc. Everyone in this community agrees that getting these students as neighbors--whether they behave or not--negatively impacts property values.

So, our dilemma is whether we should continue to get this house on the market (we do have a bit more to spend) or if we should stop, focus on dealing with the neighbors and start moving. We're so overwhelmed that we are having a hard time analyzing this. Thanks for your comments.

    Bookmark   August 9, 2011 at 8:03AM
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IMO, list the house. The situation might get resolved within a month if the owners comply quickly when the city notifies them. If they take their time, it could be a few months.

Normally, owners will be fined $xx per day after their original time period for fixing the issue expires. So maybe they are given 30 days to comply, then fines start. Most folks remedy in the 30 days. But first the city has to inspect and determine what statutes are violated and then officially notify the owner, then give time to remedy.

    Bookmark   August 9, 2011 at 9:27AM
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Unless you must move, wait:

If you put it on the market now, it'll develop an image in the minds of buyers & Realtors that it's across the street from a rooming house, & even if/when the problem is solved, people will still have that image in their minds.

I wish you the best!

    Bookmark   August 9, 2011 at 1:09PM
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The earlier you get it on the market, the earlier you get it sold. If you wait until the college kids are all gone, you could be waiting a long time. If they are destructive or trashy people, you are giving them more time to tear things up and make the neighborhood look less attractive. Odds are pretty good a potential buyer will not notice in the first place. If they do notice a lot of cars over there, they will probably assume someone is having a cookout or a family get-together, and think nothing of it. I suspect most people when looking at a house, never knock on neighbor's houses and ask for information on the neighborhood. Odds are good they will never find out.

The owners of the house may be very aware that they can not sell the house in this market, and are using this opportunity to create some income for themselves. As long as they rent to decent tenants, it would not bother me that they were there. Just because they are college kids, does not mean it is going to become a trashy frat house in the first place. They may be decent people, and they may not be a nuisance at all.

good luck

    Bookmark   August 9, 2011 at 2:06PM
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Good points from everyone for both listing and waiting. With interest rates expected to rise, there might be a brief stir of activity in the local market (it is quite dismal here). We had planned to price the house very, very aggressively (based on studying actual sales we would list at 10-12% below the competition, turn key condition and professional staging)

On the other hand, if anything happens that alerts agents or buyers to the fact that there is a dispute going on with the city and neighbors (word travels fast among the politically connected real estate agents here) then I agree with sylviatexas that it may become very difficult to sell this house. There are just too many choices out there to take a risk. (I know I would run from a situation like this if I was a buyer).

I guess we'll finish everything up here as quickly as possible and then see how things stand over there. Unfortunately, most of the students aren't even back in town yet as classes don't start until the beginning of September.

One other thought: could we have any civil legal recourse against the owner if
his illegal use of the property prevents us from selling? I would certainly not want to go this route if possible, but if we had a case it might be worth threatening the owner.

By the way, we do not have a problem with the owner renting his house to a single family (we have a pretty liberal and inclusive definition of family in this city). The problem is the multiple unrelated people with vehicles, friends, girlfriends, boyfriends, etc. There is one small driveway and in they are already parked all over the place and people come in and out of the house all day and night every weekend. I don't know how a buyer wouldn't wonder what was going on over there. In my state, we don't have to disclose, but we must be truthful if asked. Anyhow, thanks for all your helpful ideas.

    Bookmark   August 9, 2011 at 5:19PM
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Since you are already on board with dealing with the owners, consider tactics that are aimed towards the residents. They don't want to live in a place that has been made a hassle to them.

Many municipalities prohibit parking on the grass. Also, cars parked on the street often cannot be parked there more than X hours. If either of these apply, you can call the police and they will issue a ticket.

The rules about changing your residency status also vary. Many states don't include students in the "must change to XX state residency within 30 days" but some do require this. And some of the dwellers may not be actual students.

Also check into noise ordinances. If certain dBs of sound can be heard past the property line, it could be a noise violation in your area. This is in addition to any "disturbing the peace" type of issues for loud gatherings or arguments.

The only warning that I have for you is to be very careful that you don't live in a glass house yourself. Construct a deck without a permit? They'll find out and use it. Have signs posted on right of ways for your house for sale? It will be found out. If you have any questionable situation that could be used against you, take care of that now before things get really ugly. And your neighbors too.

    Bookmark   August 9, 2011 at 8:19PM
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If a student signs a lease and puts down a security deposit, the neighbors aren't going to get them to move by harassing them. Anyway, it isn't their fault that the owner isn't following zoning rules. Don't take your frustrations out on them. (If they are doing actual dangerous or destructive things, that is another matter.)

"could we have any civil legal recourse against the owner if
his illegal use of the property prevents us from selling? "

You have no chance of recovering any damages from them.

    Bookmark   August 10, 2011 at 9:11AM
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Thanks for all the input. Feeling calmer today. Our plan right now is to get the work finished up ASAP, price it right it and get it on the market. It will never look better than it does right now and we want to move on with our lives. We're downsizing to simplify our lives--so we're going to stay focused on that.
Thanks again everyone, I'll post back with an update.

    Bookmark   August 10, 2011 at 12:53PM
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