Dream home has minor imperfections

Q: My husband and I found the house of our dreams this year. I looked at it myself first and brought him back for a look, and we made an offer that was accepted.

We had an engineer inspection and a final walk-through before the closing, but there were things we didn’t see until we moved in. We are so upset to find a small shelf of the refrigerator is missing.

Also, there’s a large crack in one of the bathroom floors. The fire pit that was listed in the real estate materials but not in the contract had been removed.

The light switch that should illuminate the living room does not function properly.

Wallpaper that had been covered by a piece of their furniture is missing. One toilet runs after flushing.

Since the former owners could not move out immediately after closing, we let them rent from us and collected a full month of rent and a security deposit in advance.

They want the remainder of their rent and their security deposit back, and we feel that we are entitled to keep it due to the condition of the house.

This may come to a legal action, and before it does, I would like your opinion. — R. C.

A: I don’t know what the seller disclosure laws are where your house is located. But here are a few observations:

You may not get far with items you could have seen for yourselves in that final walk-through — things like the crack in the bathroom floor.

That’s what the walk-through is for. As for the fire pit, if you wanted it, it would have been a good idea to specify in your purchase contract.

While I haven’t seen the contract, my guess is that the sellers might have said they made no representations about appliances. In any event, you could have seen — or not seen, rather — that missing fridge shelf for yourselves.

You couldn’t have seen the missing wallpaper if the sellers’ furniture was still in place at your last-minute inspection.

Sounds as if that was indeed an undisclosed defect.

You might hold your home inspector accountable for overlooking some items. Overall, though, they don’t really add up to a whole lot.

I hope you’ll relax enough to enjoy the house of your dreams.

If kids inherit

Q: I have rental properties that I will pass down to my children. If they are not born landlords, they may sell the doubles. How is the depreciation I have deducted as an expense all these years recaptured? If they were to sell, will it be recaptured at all? Or will it be forgiven once I die?

I do my own accounting and want to be able to let them know what to expect if and when they sell one of the properties. I know you frequently recommend hiring an accountant. I wanted to ask you first and then ask an accountant if I want more specifics.

I am many years from passing away, God willing. — R. W.

A: Your kids would inherit those properties with a new, stepped-up cost basis valued at the time of your death or within six months of it. The depreciation you took as deductions would be forgotten. That’s in return for the real estate being listed at full value for possible estate tax.

Yes, you’ve heard it before. And I’ll repeat it: As a landlord, you should have your own accountant and lawyer on tap. This might be a good time to consult them about estate planning.

Contact Edith Lank at www.askedith.com, at edithlank@aol.com or at 240 Hemingway Drive, Rochester NY 14620.