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Can you sell your house to the city?

James Anderson

January 3, 2023

Can you sell your house to the city? It's possible to sell your home to the government and then lease it back, but the procedure is complicated. 

This is because most authorities avoid making purchases from individual homeowners. Before making an offer on a home, Veritas Homebuyers first explains how to initiate contact with city officials. After that, we discuss the conditions under which they are willing to rent it back to you and possible alternative options. 

Where do I start if I want to sell my home to the city? 

Two Hands On A Table Signing A Document With The Table Having A Background Of A City

One thing to keep in mind right off the bat is that selling your home or apartment to the government is not a simple process (unless it is a Right to Buy property). 

This is because governments rarely try to acquire private homes on the open market. Many people would rather design and construct their own homes and have allocated funds for bulk purchases from sources like private home builders or local portfolio owners. So it's possible that a plan made to sell a single property is ineffective. 

There's no need to completely discount this method of selling your home. Location, size, rental demand, and the local government's policies and finances would all play significant roles. Many municipalities are experiencing budgetary restrictions, which means they may not be able to acquire properties even if they choose to. 

According to the available reports and findings, local government buyback prices are likely to be lower than the true open market value. Remember that you will likely have to go through a few hoops. Sometimes, unlike private cash purchasers, the money isn't readily available because of restrictions on when it may be used. 

Because it is a private sale, no estate agent commissions are due. You'll be on the hook for your legal fees and expenses. Municipal administrations should also commission a RICS survey to ensure accuracy. 

Does the Council Plan to Rent It Back to you after purchasing my property? 

If you're looking for the most secure solution, renting to the council again may be tempting. For instance, they won't evict you like a private sell-and-rent-back company might (as most local authorities offer secured tenancies). 

Since they are a government agency, they are prohibited from using rental income to line their pockets. Even if you successfully make a direct sale to them, they will only be able to assist you if you are truly helpless. 

Can the government really take my property? 

Your House May Become Collateral If You Apply For Mortgage

For the most part, the government can seize private property if two conditions are met: 

  1. The government agency has the power to condemn private property. 
  1. The property is being taken for the benefit of the public, which is the second legal justification for confiscation. 

Assuming the intended take is for a public purpose, there are extremely few situations in which it may be challenged. Although rare, such instances do occur. 

Keep in mind that in most states, non-governmental corporations like public utilities and pipeline companies also have condemnation rights. Therefore, private entities can seize your property if they follow all the precise legal conditions. 

What will happen first? 

The government will initially seek to purchase your land through friendly negotiations. In all likelihood, a government official or their representative will contact you to discuss the proposal and make an offer to buy the land. You may get a "notice of intent to acquire," "first offer letter," and/or "final offer" in the mail. 

These official letters are significant because they establish the ground rules for recouping your attorneys' costs and kick off the clock on your opportunity to seek a government-funded assessment. Ignoring these legally binding letters may result in the loss of rights. 

What if I refuse to sell my property to the government? 

You have been a model citizen as a property owner by always paying your taxes on time and never breaking the law. You never thought the state would use eminent domain to take your building. However, the government is now threatening to seize your personal property. Because of this unexpected development, you are frustrated, angered, and intimidated. 

The state must compensate you fairly under the law. However, you have decided against selling. What will happen to you if you refuse to give the government your land? 

If I refuse, what is next? 

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You can either accept or reject the offer made by the government once an evaluation has been conducted. If you say no, the government will seek eminent domain court approval to take your land. 

The court will then set a date for taking the order. The government has sought to buy your land for a reasonable price, and at this hearing, it will argue that it is justified in taking your land for public use. You can also defend yourself against the charges at the hearing. 

With a favorable ruling from the court, the condemnation process might be delayed or even ended. If the court rules in favor of the government and orders a sale, your case will be reopened and a new trial scheduled.  

As such, this will determine the total amount of compensation and any further damages to your property. You can hire your independent appraiser and legal counsel to help you negotiate a higher settlement. 

Should I sell or fight? 

If you challenge the eminent domain process, you may be able to increase the compensation you get for your land or even prevent its condemnation. Condemnation appeals are often costly and time-consuming. It's possible that all of your efforts won't be worthwhile in the long run. 

Plenty of landowners see going to court to contest eminent domain as a worthy and symbolic expression of their rights. All of these should be taken into account before proceeding with your eminent domain petition. 

What is this appraisal I received from the government, and do I need to get my own? 

When making a fair monetary offer, the government will often (but not always) get an evaluation of your property. It depends on the situation, but you may get an evaluation copy without even asking for it. 

You should not assume that this assessment, or the offer it is based upon, has adequately examined all of the economic ramifications to your property from the proposed taking. 

It is important to know the law in your state on this subject since the government may be compelled to refund the fair cost of your evaluation (subject to specific time limitations or other criteria). 

How do I find my appraiser? 

You should hire an appraiser with frequent experience in eminent domain values. A general appraiser who evaluated your property for a mortgage is probably not qualified to offer an appraisal that might be used in an eminent domain lawsuit. 

On top of that, every eminent domain taking and property is unique. It is very uncommon for even seasoned eminent domain appraisers to need familiarity with key legal principles to appropriately determine the reasonable compensation due to a landowner whose property is being taken. 

Why has the government named me in a lawsuit? 

If the government cannot acquire the property through negotiation, it will file a lawsuit to do so in exchange for "just compensation. 

"Do I need a lawyer? 

Complex laws and case law limit what landowners can and cannot recover in any given condemnation case. 

The sooner a landowner retains an expert eminent domain attorney to determine the extent of their potential damages under their state's legislation, the better. 

Appointing the right appraiser might be difficult, but an experienced eminent domain attorney can assist. Hiring an attorney with experience in eminent domain issues is crucial. Hiring a lawyer long before filing a condemnation action is always a good idea. 

He or she can help review paperwork before a lawsuit is filed, find a qualified eminent domain appraiser, and negotiate terms before a case is filed. Early involvement of eminent domain lawyers can improve monetary and non-monetary settlement conditions and help you avoid a lawsuit. 

The government says they need immediate possession of my property. Can they do that, and how does it work? 

Unless you can agree with the government, they will likely launch a lawsuit to condemn your land. When the government files lawsuit against you, it may seek what is known as "instant possession" or a "quick take" of your property. 

In Colorado, for instance, the government can use this fast-tracked procedure to get a court order granting them possession (but not title) to your property in exchange for a deposit of an amount equal to or greater than a reasonable estimate of the fair market value of the property being taken. Policies in several other states are quite similar. 

The government took possession of my property. Now what? 

Scale Represents That The Offer You Provide Must Be Balanced- For Article Why Was My Offer Rejected

Most or all of the money you put in escrow with the court should be available to you after or at the time of the transfer of control of your property. 

Twenty days after court-appointed appraisers have delivered their report in Indiana, for example, the landowner can access the government-deposited funds. If a trial date has not already been set, the court will do so and use it to decide a fair settlement sum. 

How does the trial work? 

Each state has its system for condemnation trials. There are several states where a commission, such as Alabama and Minnesota, hears valuation trials.  

One or both parties can have the trial before a judge instead of a commissioner panel in several jurisdictions. Additionally, you may be able to have a jury determine appropriate compensation for the loss of your property. 

Will I be reimbursed for my attorneys’ fees? 

Although your gut tells you yes, the real law varies from state to state and is rather complex. The defendant may be ordered to pay your legal fees.  

Alabama law states that the government (with some exceptions) must cover reasonable legal expenses in a condemnation case if the ultimate award of just compensation is at least 130% of the government's last documented offer to voluntarily buy the property before the litigation was filed.  

Similar systems exist in many other counties. In California, for instance, a landowner may be granted legal fees if it is determined that the landowner's final demand for compensation was fair and the government's final offer was unreasonable. 

Alternatives to Selling and Renting Back to the Council 

The following are some alternatives to consider, given the difficulties associated with selling directly and subsequently getting into a rental arrangement with the municipality. 

Sell and Rent Back to a Housing Association 

Housing cooperatives, mutual housing associations, other resident-owned or controlled housing, and the professionals, organizations, and individuals who work with and advocate for housing cooperatives are all represented by the National Association of Housing Cooperatives (NAHC) in the United States

The Housing Association is a non-profit corporation that is autonomous from city governments. They focus on providing homes for people with low incomes and special needs. Thus the alternative names are "Registered Social Housing" and "Private Registered Housing." 

Housing Associations, like municipal governments, actively purchase homes from developers, homebuilders, and individual sellers and construct their own. 

Sell and Rent Back Privately 

Calculator Real Estate Themed

Which Best Describes the Benefits of Renting a Home? There are a few companies that provide sale and rent-back services, and they may be able to assist you. The plan is to have the property acquired and rented back to you for five years at a set rate. 

The amount you pay will likely be reduced by 15-25%, which is a drawback. In addition, there are additional potential dangers, such as unexpectedly high rent hikes or eviction. 

Due to the scarcity of trustworthy businesses, it is essential to verify that the one you're dealing with complies with the rigorous standards set out by the US Securities and Exchange Commission (SEC) 

Sell on the Open Market and Look for Somewhere to Rent 

The easiest method to get the most money for your house is to sell it, which means you have to move out. Then, using the money you've made, look around your neighborhood for a good investment property to rent out. 

Selling at an auction might be a good option if you need to get things along quickly. Check out our article that compares selling a home to renting one. 

Remortgage and Become a Landlord Yourself 

This may seem like a crazy idea, but it may work if you have the resources! The plan is to refinance the home on a buy-to-let basis so we can keep it. After that, you may locate a tenant for the property and look for another rental unit to call your own. 

This allows you to sell the house, purchase a new one, or move back in with your family if your circumstances change. Remember that additional financial exposure, hazards, and difficulties are associated with renting out your house.  

Here are some Expert Tips for Mortgage Refinancing Q&A 

FAQ

Can I sell my land to the government? 

Yes, if the government wants it, but if you convince the government they want it and do not like your price, they can take it by Eminent Domain at their price. It is how most railroad track property was taken. 

Work With a Sell House Fast Company like Veritas Homebuyers.  

Who can help me sell my house today in Huntsville, Alabama?

We can help you sell your home quickly and easily, in less than a month, without needing a real estate agent or legal expenses. 

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