ask george & chuck
Nov. 17, 2008

Option fees, homestead exemptions
Answers to real estate questions as appearing
in the Houston Chronicle

Dear George: Our offer for a house was accepted, so we submitted the option fee and paid $1,200 for various inspections. At the closing, the seller declared bankruptcy and refused to sign. We know we can't recoup the money paid for inspections, but the seller cashed our check for the option fee a week after the closing. Is this legal?

Answer: Paragraph 23 of the purchase contract you signed outlines that the option fee you paid was paid in exchange for the unrestricted right for you to terminate the contract without penalty. The fact that you did not terminate the contract and were ready, willing, and able to close does not change the contract. You should show up at the bankruptcy creditor's meeting and ask for specific performance under the terms of the contract. However, your legal rights may not help when you're dealing with someone who acts in bad faith.

Dear George: Construction on our new home should be finished during the last two weeks of December. Do we need to own and occupy the house on Jan. 1, 2009, in order to qualify for the homestead tax exemption for the 2009 tax year? If we don't own and occupy the home on Jan. 1, 2009, can we apply for a partial year exemption?

Answer: There are no partial homestead tax exemptions in Texas. However, if your builder is supposed to complete construction before the end of 2008, perhaps the builder's contract may provide some relief for property taxes in the event he fails to complete and close by Dec. 31, 2008. Speak with your builder's representative about this.