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Negotiated Purchase of Church Land, but State Says the Purchase Price is Too Low

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  • 06-25-2013, 07:30 AM
    idmerritt428
    Negotiated Purchase of Church Land, but State Says the Purchase Price is Too Low
    My question involves real estate located in the State of: New York

    I have been jumping through hoops for over 6 months trying to purchase a church property that has been on the market for years and vacant. I was unable to find anyone willing to extend a mortgage out on a church I was goign to convert to my family's vacation home. In the end we found it best for my father to pull his 401k to pay off the church in full as no one would lend out on a church. Inspection came back clear for us. But then the state of NY sent out an inspector who appraised the church for $50,000 over the sale price. The sellers are happy with the original lower sale price, but now the NY State Attorney General has stopped the sale and advised we can not purchase the church for the lower amount, and in order to purchase the church we must pay an additional $50,000. First why would the Attorney Genral have any interest in this purchase? Why can he stop and private sale/purchase and require more money for a sale when the owner is happy and has agreed to the original offer in contract? I have never even ehard of anything like this even possible, which of course makes me question the legality of all this. Thank you to anyone who can offer some insight!!! After over 6 months of jumping through hoops to buy this property I was supposed to be closing on the home in a week, and now who knows.
  • 06-25-2013, 08:12 AM
    jk
    Re: Buying Church for Vacation Home but Attorney General Says Must Pay More
    who owns the property?

    generally the government is not involved in a private sale, at least at the level you speak of. They have no place in determining value or making any demands on the parties as you suggest here. I have to presume the state has an interest in the property which allows them to insert themselves into the sale as they have.
  • 06-25-2013, 08:47 AM
    flyingron
    Re: Buying Church for Vacation Home but Attorney General Says Must Pay More
    If the organization is a (perhaps dissolved/dissolving) non-profit the state may indeed have a fiduciary interest in the property. This is beyond the details you have presented. You NEED a lawyer.
  • 06-25-2013, 09:13 AM
    idmerritt428
    Re: Buying Church for Vacation Home but Attorney General Says Must Pay More
    The property is owned by a church board of directors. I found out from the realtor because they are a non profit organization the state can do their own inspection. However no one knows who or when the inspector came out and what he is using for comparables. We couldn't get a loan as it had no comparables per 4 banks. Its been for sale for almost 5 years and we're the only ones the seller felt put in a reasonable offer. The seller is as upset as us, we are all scrambling to figure out how to get through this next hoop.

    - - - Updated - - -

    The church/seller/organization is not dissolving. They bought another church a mile away that was bigger and have been trying to sell the old one. I have the attorney I was using for the closing but he isn't instilling much confidence in me with his lack of knowledge or ideas how to proceed.
  • 06-25-2013, 09:14 AM
    adjusterjack
    Re: Buying Church for Vacation Home but Attorney General Says Must Pay More
    Then it's the seller that needs a lawyer.

    I suggest you just walk away from the deal and use some common sense here.

    Buy a house that you can get a loan for.

    Your father using his 401(k) for this is an incredibly bad idea. Especially if he uses all or most of it. The taxes will be brutal. Figure 25% to 35% is he is over 59 1/2 or 35% to 45% if is not yet 59 1/2.
  • 06-25-2013, 12:08 PM
    Mr. Knowitall
    Re: Buying Church for Vacation Home but Attorney General Says Must Pay More
    The seller will be able to pursue an administrative challenge of the state's assessment, if it chooses.

    Do you and your family have any connection with this church other than your attempt to purchase this particular property?
  • 06-26-2013, 07:50 AM
    BenT
    Re: Buying Church for Vacation Home but Attorney General Says Must Pay More
    As suggested - maybe a good idea to walk away. The time needed to sort through the paperwork related to not-for-profit in NY State can take quite a while, and will probably need some lawyerly assistance. As per the church board of directors - it's their issue given they knew they were a not-for-profit, and probably not the first time they had heard from the State and State Attorney General regarding fees, or delinquent fees.
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