I also want to state that I am not an attorney and nothing I state on this post is to be interpreted as legal advice, please talk to your own attorney for more information. 

Is this other people's interpretation? 

Oh my.... that's certainly a whole lot of creative interpretations of the tax law.....I appreciate your loyalty to her but ask yourself - when push comes to shove, is she going to cover your penalties and interest for if/when you need to correct these issues?? 

Anyone else's interpretation of the regulations is not good enough to base a buying decision on.

Here's what the law, as interpreted by the court in the case you cited, seems to be:1.

Title co.s don’t interpret contracts and events to decide who, if anyone, is entitled to the EM deposit.  

In St Paul, it is voted upon at the 3% cap but needs interpretation and guidelines. 

The first call (especially with hypotheticals) is usually a generic “no” or little interpretation.

Hi thereI'm looking at a property in Vallejo CA that has 2 dwellings on a single lot and trying to figure out if I'd be able to subdivide it and flip the properties separatelyI found this guidance but am having a hard time interpreting it... they way I ready it, nothing is permissible LOL(I must be missing something)http://66.161.26.67/uploads/89/062907%20-%20PH-42%20-%20Small%20Lot%20Subdivision.pdfLet's say:1) I have an 8000 sq ft lot with a single dwelling - I can't subdivide that because it creates a vacant lot2) I have an 8000 sq ft lot with a single dwelling and intend to build a second dwelling - I can't do that because it is constructing a new residence3) I have an 8000 sq ft lot with 2 dwellings (like the property I'm interested in) - I can't subdivide that because of the granny flat ruleSo what exactly would I be able to do?

Or is that interpretation taking it a bit too far?