We called it: In October, we revealed that the Playboy mansion -- home to Hugh Hefner and the site of epic parties back in the day -- is in need of major renovations. Now, if a new report from TMZ is to be believed, it looks like Hef is finally ready to throw in the towel: Within a month, the crumbling 6-acre estate will be up for sale.
In spite of the 29-room (six-bedroom) Beverly Hills mansion's decrepit condition, its owner, Playboy Enterprises, hopes to sell it for north of $200 million. Plus, the buyer will have to grapple with another huge catch: According to TMZ, the buyer will have to grant 89-year-old Hef a "life estate," which means he can continue living there until death parts him from his beloved bachelor pad.
Ummm … who the heck wants to buy a home with someone living in it? Strange as it may seem, "life estate" arrangements are as old as the hills.
"Life estates go way back to the earliest roots of the common law, and they are great for providing for someone to live in his or her own home until death," says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School. "Effectively, a life estate grants the [original owner] many of the indicia [characteristics] of full ownership for the rest of his life. Upon death, complete ownership of the property can pass to another. A common example would be where a husband bequeaths a life estate in the home to his wife, with the remainder to his children upon her death."
But Hefner's deal differs in one key way: He's not bequeathing his home to family members or even a deserving Playboy bunny, but to an as-yet unknown third party who'll be forking over millions to move in once Hef passes on.
"This seems like a version of a reverse mortgage, because it frees up equity in the home during the owner's lifetime without interfering too much with his use and enjoyment of the property," Reiss continues.
But this privilege will likely drag down the asking price, a lot. While the listing price may be $200 million, most experts say that $80 million to $90 million is more realistic.
"The life estate would likely significantly reduce the fair market of the property, because the purchaser must defer taking possession as well as other aspects of ownership -- renovating it, for example -- until the death of the life tenant," Reiss says. "Moreover, the purchaser must deal with the uncertainty of the life estate: Will it end in a year or in 10 years?"
And aside from these uncertainties, there's the question of liability. Without adequate legal protection, the owner could be responsible for any damage to the property or its inhabitants. Granted, Hef is 89 and probably passes his days playing chess, but if Playboy bunnies continue to hop in and out, anything could happen.
"What if there's a fire and the place burns down? What if Hefner falls down and breaks his hip?" asks Wendy Flynn, a Realtor in College Station, TX. "After all, it is known as a party house."
All in all, if you're salivating for a piece of Playboy history, make sure to man up your legal team to protect you from all that could go wrong before you're able to take possession. And even though the mansion is a decent candidate for a tear-down, "don't start spending money on plans for the property," Reiss adds.
Even though Hef is already past the average U.S. male's life expectancy of 84.3, "a lot can happen before possession of the property is actually conveyed."
Still, if you've got deep reserves of cash and patience, you could be rewarded with a grotto of your very own -- playmates not included.