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At least in Monopoly, you get a little piece of cardboard...

(Alternate title: Adventures in Unreal Estate)

Real estate schemes are the things of legend. Florida swampland, Arizona beachfront, acreage on the Moon -- those are so old as to be cliche's. But the town of Pembroke, New Hampshire, has done them one better: they've sold land that never existed.

John and Renee Kuliga have owned a lot in Pelham since 1946. In 1995, they spotted a public notice that the town was selling a lot that abutted theirs. Seeing a chance to expand their property, they bought it, paid the transfer tax, and paid the increased property taxes for nine years.

But last summer, they got into a dispute with the town over reassessed property taxes. They hired a surveyor to map out their property, and discovered that the lot they had bought in 1995 had a rather unusual property -- it didn't exist.

It turns out that the town had, in its own survey a while ago, had made a mistake. The legacy of that error had created a "ghost" lot -- one that existed solely on paper, and not in the real world. They then sold that figment of their imagination to the Kulikas and started taxing them on it.

The Kulikas, understandably, were a bit upset. They asked the town for a refund for the sale and all the taxes they'd paid for their little slice of Shangri-La -- about $8,000. But the town came back with a counter-offer -- the original purchase price and the refund of just the last year's property taxes -- a smidgen over $3,000. If the Kulikas want the rest of their money, they can go dig for it on their non-existent lot.

The Kulikas, naturally, didn't take that well. They're now suing the town. And not only for the above costs -- they want compensation for all the other expenses they've incurred (surveyors, legal fees, and whatnot) because of the town's screwup.

The town is hiding behind the dual defenses of "we don't want to set a precedent" for being liable for their mistakes and "we sold it 'as-is.'"

The selectmen are meeting tonight to discuss the matter.


Comments (19)

wow - they should clearly g... (Below threshold)
JD:

wow - they should clearly get the purchase price and their tax money back, with interest!

"we sold it 'as-is.'... (Below threshold)

"we sold it 'as-is.'

Shouldn't that be as-isn't?

Hmmm.Perhaps the t... (Below threshold)
ed:

Hmmm.

Perhaps the town should invoke eminent domain and take the phantom land back.

Frank Zappa was right. Stupidity is more common than hydrogen.

I agree with JD. I recentl... (Below threshold)
Mike:

I agree with JD. I recently made an honest mistake by leaving off some money on a tax return and had to pay the government 2 1/2 years worth of interest. Even after we were working out the details of the amount I owed (the IRS had also made a mistake figuring the total) they were still charging me interest. It is absolutely obscene that this couple would not get a full refund and interest, because if it was the other way around you know the government would want everything you owe them plus the kitchen sink!

Not to defend the town's st... (Below threshold)
fatman:

Not to defend the town's stupidity, but why did it take nine years for the Kuligas' to discover the mistake?

"HAD an unusual property" ... (Below threshold)
fatman:

"HAD an unusual property" or Is an unusual property? (please excuse the shouting, but I still don't know how use the italics feature.)

I am not defending the town... (Below threshold)
Steve L.:

I am not defending the town in any way, but a portion of the blame lies with the Kulikas. They should never, never, never have purchased the porperty without having a survey of their own done. Without a survey, they couldn't be sure of what they were buying in the first place.

As the old saw goes, "Buyer... (Below threshold)

As the old saw goes, "Buyer Beware."

Especially when the seller is the goverment! Personally, I'd never buy a piece of property without having a survey done beforehand. Especially rural land. Just imagine if the price had been set as 'per acre' and it it had been bigger than the couple had expected.

Always get a survey.

Steve L has a point, but it... (Below threshold)

Steve L has a point, but it seems, based on the amount of money at stake, that this "lot" must have been pretty freakin small, and a survey may have cost as much or more than they actually paid. Lot purchase and nine years worth of taxes is $8,000????

I guess this is what they mean about buying land "sight unseen."

(Steve is obviously a faste... (Below threshold)

(Steve is obviously a faster typist. Um, what he said...)

If you did this, you's have... (Below threshold)
Fred Z:

If you did this, you's have the local cops and DA charging you with fraud.

Always wondered how a town council could be both completely gutless and full of scat at the same time. Where do they keep it?

Between their ears, Fred. B... (Below threshold)

Between their ears, Fred. Between their ears.

I feel for the buyers, but ... (Below threshold)
Cousin Dave:

I feel for the buyers, but this is why title insurance exists... sigh...

officials are worried th... (Below threshold)
mesablue:

officials are worried that refunding all that the Kuligas request could set a precedent for future land sales

Like what? That the land is required to actually exist?

I think this happens more t... (Below threshold)
dodgeman:

I think this happens more than you would think. Out of state buyers peruse the papers for land auctions hoping to buy acreage at discounted prices, usually for the cost of back taxes. They then hold it for a while and resale it at commercial rates for a nice profit.

The thing is, you usually end up with lots of little cuts of land, or back alleys, or trashy lots in bad locations. The hope is that one lot in ten will pay off enough to cover the bad purchases elsewhere.

I have a small piece of property behind my house that was never incorporated into the subdivision, and ended up un-owned after the original land sale to the development company. You want it? Only a thousand or so in back taxes, but good luck finding it, and better luck finding some other idiot to buy it from you.

A buddy of mine has some out of town property with a very similar phantom lot right in the middle that the county keeps trying to sale off. Every few years someone from out of state will call him asking if he'll give right of way passage through his property to the phantom lot they just bought (and are paying taxes on). He's even had the county try to tax him on the property he's proven several times does not exist. He keeps an active folder cause he knows it's going to happen again.

Yeah, the county should refund the taxes, but most importantly is buyer beware.

"Not to defend the town's s... (Below threshold)
Just Me:

"Not to defend the town's stupidity, but why did it take nine years for the Kuligas' to discover the mistake?"

If you read this dispute resulted from a recent property tax reassessment, and in NH towns/Cities do property tax reassessments every ten years. That is probably why it took so long.

I think the city owes the couple the purchase price and all the taxes with interest. What do you think the City would be saying, if this couple had decided to take a pass on their property taxes for ten years, if the town hadn't forclosed on them for non payment, the town would not only have expected the tax money, but they also would have charged interest. Sure it is a big bill for the city to pay, but I don't think the couple should have to absorb the loss either.

I guess this is what the... (Below threshold)
Michael:

I guess this is what they mean about buying land "sight unseen."

Or "site unseen."

The Kuligas have more of a ... (Below threshold)
JD:

The Kuligas have more of a beef with their title company - assuming of course they got title insurance.

I did read the article, Jus... (Below threshold)
fatman:

I did read the article, Just Me. My point (and the point of several others who did a better job of explaining it) was that the Kuligas' -- and everyone else who buys property-- should have had a survey of their own done to make sure they were getting what they paid for.

I'm with you on everything else you said.




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