Larry is someone I've known for years. Saturday we went to his office to talk about the whole range of things we needed to do: title for the house, financing the house, living wills, wills, and all that stuff. Our goal was to start getting things taken care of. When we left, we had a much longer to-do list.
Item #1 on the agenda: Real Property
Here's our situation: I own the row house we will be renovating. Juan Felipe owns the condo we will be living in while we renovate. After the renovation, the plan is for us to both own 50% of the renovated row house, and 0% of the condo.
We can register as domestic partners in the District and avoid the transfer and recordation tax if I give Juan Felipe half the house. If we do that, however, the federal gift tax hits us. If I sell him half the row house, we avoid the gift tax problem, but then we get the transfer and recordation tax.
Another catch - while married couples can pay their bills however they want - we can't. We have to be able to demonstrate to the IRS that we have equally contributed to the house in order to avoid having estate tax due on the whole house when the first of us dies. Unlike my father and his wife, who each pay different bills, we have to be able to demonstrate that everything was paid 50/50. That adds a new item to the to-do list: get a joint checking account and keep scrupulous records about money in and money out of it.
The easy thing would be to trade half an interest in the condo for half an interest in the row house, but Virginia's vindictive constitution prohibits any contractual arrangements that could confer any "benefits of marriage" to same-gender couples. We would get probably be pounded by taxes there. This from the state (although they insist on being called a "Commonwealth") that tenaciously held onto laws making it illegal for different races to intermarry. Virginia is for lovers, but only if you're straight, married, and white.
We also need to find out what the mortgage lender may require on the title, as that will affect what we need to do.
Item #2 on the agenda: Powers of Attorney, Living Wills, etc.
We need to make sure that if anything happens to one of us, the other can take care of things. This is especially important as Juan Felipe does not have any family nearby. Another thing on the to-do list: find alternates for medical and financial decision making in the event we are both incapacitated.
Item #3 on the agenda: Prenup
If people get married and it doesn't work out, there is a whole set of statutes and case law for what happens when a marriage ends. Not so for couples that cannot marry. To avoid costly, lengthy court cases, we will need to work this out ahead of time.
Item #4 on the agenda: Wills
Larry had an interesting take on this. I think we had both assumed that if we went down on a plane together that our families should get the money. He pointed out there is no reason that needs to be the case. Sure, it would be nice to provide for our nephew's college (and for any other nieces and nephews we may get), but why give it to them if they don't need it? Another thing for the to-do list: what should happen to our money when we die?
I have give really short shrift to all of these issues. Consult an attorney if you want to know the painful, intricate details.
Tuesday night Juan Felipe opened a joint checking account for us with Bank of America. Who knew you could do that over the internet? He put $25 in, so now I owe $25.
Wednesday, December 5, 2007
Week 8.1: Starting with the Architects
When we got back, we arranged another meeting with the architects. We set the meeting for 9:00 Thursday. Tip: When setting up a meeting, make sure everyone knows where the meeting will be. I assumed it would be at our house. Juan Felipe assumed it would be at their office. None of the e-mail messages we sent back and forth specified where we were meeting. I'm not sure why, but when I called their office around 10:00, somebody there answered on the first ring. They got the boss on the phone, and let us know it would be at our house.
John is one of the partners in the firm. Ultimately, he is responsible for the work they do on our house. Chris is the architect that seems to be doing the bulk of the actual work.
We discussed the contract, specifically the provision about the copyright. I wanted to make sure that we can take pictures of and in our house and use them. Not a problem. In addition to talking, we walked around the house again, Chris making a rough drawing of the floor plans. We set up a time for the next day for Chris to come over with another guy and take measurements of the house. The meeting on Thursday was about an hour. Measurements on Friday took over hours.
The following Wednesday, the contract was mailed, and 10% of the estimated architect's fees were paid. We really need to get the financing figured out.
John is one of the partners in the firm. Ultimately, he is responsible for the work they do on our house. Chris is the architect that seems to be doing the bulk of the actual work.
We discussed the contract, specifically the provision about the copyright. I wanted to make sure that we can take pictures of and in our house and use them. Not a problem. In addition to talking, we walked around the house again, Chris making a rough drawing of the floor plans. We set up a time for the next day for Chris to come over with another guy and take measurements of the house. The meeting on Thursday was about an hour. Measurements on Friday took over hours.
The following Wednesday, the contract was mailed, and 10% of the estimated architect's fees were paid. We really need to get the financing figured out.
Week 7: Vacation
After making such a big decision, we left the country for 10 days. We still have to meet with our attorney and get together with the architects we have selected when we get back.
Week 6: The Decision
We have decided on an architect. My job is to let them know and set up a meeting where we fork over the retainer fee. Juan Felipe will notify the firms we decided not to use. I also need to make an appointment with our attorney so we can, hopefully, get the financing settled before money becomes an issue.
I wish I could tell you we made a carefully calculated decision based on objective criteria, but that's not really how we did it. I do think we made a good decision, though. We know the quality and style of work they do, and we had a gut feeling they are the ones. I think we would have been happy with the other firm as well, but we had to pick one.
I wish I could tell you we made a carefully calculated decision based on objective criteria, but that's not really how we did it. I do think we made a good decision, though. We know the quality and style of work they do, and we had a gut feeling they are the ones. I think we would have been happy with the other firm as well, but we had to pick one.
Week 5: One More Architect
We interviewed the last architect today. It wasn't easy as a house across the street was burning down at the same time. Apparently, in the course of the fire, a propane tank exploded causing someone to call 911 and report an explosion. Well, an explosion ten blocks from the US Capitol beings law-enforcement types out from everywhere. The DC Police, Capitol Police, FBI, ATF and probably others were there as well. I got a call from the architects on my way home, as I was leaving Union Station, and I met them a block away. We snuck through the alley and in through the back door. Three houses burned. About 30 years ago, the same three houses burned. That time, someone died. This time it was only a dog. Four fire fighters were injured, one seriously.
We both had the same impression of this architect: that he would be telling us what our house would look like rather than building our house. He is very good, but we have concerns that his personality may not be a good match with ours. His fees are also the highest of any of the architects we have interviewed. The guy with him noticed changes made to the living room in the prior remodeling may be contributing to problems in the upstairs hallway. Good eye.
We both had the same impression of this architect: that he would be telling us what our house would look like rather than building our house. He is very good, but we have concerns that his personality may not be a good match with ours. His fees are also the highest of any of the architects we have interviewed. The guy with him noticed changes made to the living room in the prior remodeling may be contributing to problems in the upstairs hallway. Good eye.
Week 4: Interviewing More Architects
We interviewed two firms this week, and we liked both. The two firms have very different personalities.
The first firm sent a principle and an associate architect. They seemed a little stand-offish and professional. They do mostly commercial work, but they do a few residential projects each year. They designed Maryland's first LEED Platinum building, so their green credentials are strong. They seemed to be much more interested when we told them our only absolutes are not to change the front and the interior stairs must change. Our hope is that since they do few residential projects, they would want to do projects they really went to do and will do a good job. We also suspect a firm may give primary responsibility for a small project like this to a junior person who wants an opportunity to impress the bosses with his/her work. They did flat-out say they would not be interested if they did not also manage the construction. Thats' a relief for us, as we do not want to be construction managers. They also said they have contractors calling them up asking for work, so it looks like this may be a very good time to be doing this. One thing made us think twice about this firm: They misspelled the name of the client in documents on their web site from an architectural competition. As the client is a nearby city, they should have that right.
The second firm had a totally different personality, although the look and feel of their work is somewhat similar to the previous firm's. Although only one person (one of the principals) came, she was very personable. We got the feeling that with her firm, we would all end up friends at the end. I know Juan Felipe really likes that. They have a second web site that is filled with pictures of the firm members at clients' homes for cocktail parties, presumably when the project is finished and turned over to the client. This seems to have given Juan Felipe a warm, fuzzy feeling inside. She indicated that she would work with any contractor we selected, and that she would suggest contractors if we wanted. She had had both wonderful and horrible experiences with client-selected contractors. She also explained a bit about how her firm works, which I suspect is similar in other firms. An assistant does most of the grunt work, but she and the other principal architect keep close tabs on the work to make sure the project fits what the client wants and the style the firm is trying to maintain. Both she and her partner live a few blocks from their office, so they are able to stay abreast of the work.
Her timetable was a bit later than the others. I think she was probably being a bit more realistic about the holidays. She also has a few contractors she likes working with, which is an advantage in my book. The disadvantage I see with this firm is they have made substantial changes to the Standard AIA contract. It looks like it would prevent us from ever taking pictures of or in teh house and using them for any reason. It looks like if we took Christmas photos in the house we would need to get their permission to send them to friends and family. I hope that's not their intent. We would need to clarify that. [Hindsight: It seems that all architects make a grab here. Under copyright law, if I hire you to create a work that can be copyright, I own that work. It was done at my behest and expense, so I own it. The standard AIA contract seems to accept this. No architect does, though, and they all seem to put in a clause claiming ownership of their work with a limited license to the client. This firm's language is harsher than others, however.]
The first firm sent a principle and an associate architect. They seemed a little stand-offish and professional. They do mostly commercial work, but they do a few residential projects each year. They designed Maryland's first LEED Platinum building, so their green credentials are strong. They seemed to be much more interested when we told them our only absolutes are not to change the front and the interior stairs must change. Our hope is that since they do few residential projects, they would want to do projects they really went to do and will do a good job. We also suspect a firm may give primary responsibility for a small project like this to a junior person who wants an opportunity to impress the bosses with his/her work. They did flat-out say they would not be interested if they did not also manage the construction. Thats' a relief for us, as we do not want to be construction managers. They also said they have contractors calling them up asking for work, so it looks like this may be a very good time to be doing this. One thing made us think twice about this firm: They misspelled the name of the client in documents on their web site from an architectural competition. As the client is a nearby city, they should have that right.
The second firm had a totally different personality, although the look and feel of their work is somewhat similar to the previous firm's. Although only one person (one of the principals) came, she was very personable. We got the feeling that with her firm, we would all end up friends at the end. I know Juan Felipe really likes that. They have a second web site that is filled with pictures of the firm members at clients' homes for cocktail parties, presumably when the project is finished and turned over to the client. This seems to have given Juan Felipe a warm, fuzzy feeling inside. She indicated that she would work with any contractor we selected, and that she would suggest contractors if we wanted. She had had both wonderful and horrible experiences with client-selected contractors. She also explained a bit about how her firm works, which I suspect is similar in other firms. An assistant does most of the grunt work, but she and the other principal architect keep close tabs on the work to make sure the project fits what the client wants and the style the firm is trying to maintain. Both she and her partner live a few blocks from their office, so they are able to stay abreast of the work.
Her timetable was a bit later than the others. I think she was probably being a bit more realistic about the holidays. She also has a few contractors she likes working with, which is an advantage in my book. The disadvantage I see with this firm is they have made substantial changes to the Standard AIA contract. It looks like it would prevent us from ever taking pictures of or in teh house and using them for any reason. It looks like if we took Christmas photos in the house we would need to get their permission to send them to friends and family. I hope that's not their intent. We would need to clarify that. [Hindsight: It seems that all architects make a grab here. Under copyright law, if I hire you to create a work that can be copyright, I own that work. It was done at my behest and expense, so I own it. The standard AIA contract seems to accept this. No architect does, though, and they all seem to put in a clause claiming ownership of their work with a limited license to the client. This firm's language is harsher than others, however.]
Welcome
Welcome to the story of our home renovation.
We started with a turn-of-the-century end-unit row house in Washington, DC, that had been badly remodeled in the 1980s. We'll see how it turns out.
I started this blog a few weeks into the process, so there may be some place holders here for a little while until I have a chance to go back and fill in the gaps.
Your comments are always appreciated.
--RC
We started with a turn-of-the-century end-unit row house in Washington, DC, that had been badly remodeled in the 1980s. We'll see how it turns out.
I started this blog a few weeks into the process, so there may be some place holders here for a little while until I have a chance to go back and fill in the gaps.
Your comments are always appreciated.
--RC
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