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Smoking issue could light up battle between owners, renters
Saturday, March 15, 2008

Q. My husband and I own a condominium in a 120-unit development in Mission Viejo, Calif. Our building holds five units stacked two on the bottom, two in the middle and one on the top. We reside in the top unit. These units are built with two to three decks each, perfect for enjoying our great California weather.

Our unit has a different layout than the others, with some interior rooms over the lower-unit decks. Of the five units in our building, all are owner-occupied, except for the unit directly below us. The renters there are also the only smokers of the five.

I do not know the exact language of the rental agreement between the unit owners and the tenants, but I believe it restricts tenants from smoking in the condo. As a result, they smoke on their decks. Because of the design of the building, their cigarette smoke flows directly up the walls of the building and into our windows.

We prefer to have our windows open for most of the year -- this is a very balmy climate, and does not regularly require heating or cooling.

When our neighbors smoke -- sometimes 10 or more cigarettes a day and all through the night, including at 2 and 3 a.m. -- the smoke drifts into our bedroom and we have to close our windows or our entire condo fills with smoke.

Here are my questions: Can we get together with all of the condo owners in our building to declare our building a nonsmoking building? In this case, we would ask the nonresident owners to vote on the declaration, and then to modify their rental agreement accordingly. Should this involve our homeowners association? If that is not an option, are there any other options available to us?

I have not spoken directly to the renters about the smoking. We had some previous interactions on behalf of the owners in the unit below them, where they were taken to the HOA board on problems of excessive noise at all hours of the day. This issue was resolved more than two years ago. I am reluctant to approach them about the smoking as I am not at all sure we have any rights in this matter.

A. The issues you are facing are not uncommon. Issues of secondhand smoke have led to the limiting of smoking in commercial and public buildings, public areas, restaurants and bars.

Limiting smoking in both condominiums and apartment buildings will soon come to the forefront of the secondhand smoke debate. There have been cases where tenants have been evicted for excessive smoking and prohibitions against owners smoking in their own condominiums.

It is likely that litigation could result if your homeowners association instituted a smoking restriction. You may wish to inquire with the HOA board and the development's property manager about the likelihood of a smoking ban being enacted and what the ramifications would be for the association. It is likely that the board would have to obtain a legal opinion on a smoking ban.

Q. Do you have any information or tips on selling a home via auction?

A. You should prepare the property by removing clutter, making minor and cost-effective repairs and obtaining a housing inspection report.

As part of the process, you will have to decide if the property will have a minimum price that you will accept (called a reserve or floor price) or if it will be sold to the highest bidder (an absolute price) no matter what the price is at auction. This is an important consideration because if there is not much interest in the property, the money that you spend on marketing (2 percent to 4 percent of the sales price) will be wasted if the floor price is not met. And if it's an absolute-price auction, the final price may be far below your expectations.

A property auction assures that the highest price will be obtained at the auction -- that's all. As a result of declining property values, you should be prepared for the fact that bidders will know the market and be looking for a bargain.

The commission for the auctioneer can be paid by either the seller or buyer. You should contact three auction houses in your area and obtain information on their procedures, contracts and costs.

It may also be helpful to attend an auction. You must be able to evaluate an auctioneer's experience, training, professionalism, fees, marketing plan, auction process, qualification of buyers, use of inspection reports and property disclosures.

An auction is most appropriate for distressed owners who must sell in a hurry. In this housing market, buyers are looking for deep discounts. Sellers need to look at the long term and in many cases wait until housing markets stabilize before selling.

Dr. Thomas Musil is the director of the Shenehon Center for Real Estate at the University of St. Thomas in Minneapolis. He has more than 25 years' experience as a broker, analyst, consultant and expert witness in real estate litigation and arbitration disputes. E-mail questions to: tamusil@stthomas.edu. Please include your name, city and state.
First published on March 15, 2008 at 12:00 am
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