DEAR BOB: Two years ago my partner and I bought a condotogether. I paid the entire down payment and we have split the mortgagepayments, condo fees and property taxes since then. However, he recently movedout and says he wants his half of the equity (which I figure is around$45,000). I don’t have that kind of money to buy him out. Nor will I be able topay the expenses on my own. Can he force the sale of our condo? –Tamara Y.
DEAR TAMARA: If both names are on the title, the answer isyes. Your ex-partner can bring a partition lawsuit to force the sale of thecondo with a split of the sales proceeds. However, if his name is not on thetitle, he can’t bring a partition lawsuit.
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You will need to hire a real estate attorney if he sues forpartition so your interests can be protected. Because you paid the downpayment, your attorney will make certain you receive that amount before thesales proceeds are divided.
A partition sale is a possibility whenever two or moreindividuals take title to real estate together. For this reason, it is wise toconsider other forms of co-ownership, such as a partnership agreement, whichprohibits a partition lawsuit.
WHY PAY PMI (PRIVATE MORTGAGE INSURANCE) FEE UP FRONT?
DEAR BOB: I recently heard financial adviser Suze Ormansuggest that a home buyer can pay upfront for his/her PMI premiums by paying 1percent of each $100,000 of the mortgage. She says most mortgage lenders don’texplain this. Is this true? –Tany A.
DEAR TANY: PMI premiums can be prepaid, but why in the worldwould you want to do that unless you receive a huge discount?
It makes no sense to prepay PMI, especially since PMI feesare not tax deductible (although Congress is considering making them deductiblelike mortgage interest). Another reason not to prepay PMI is you might sell theproperty and pay off the PMI mortgage, or you could pay down the mortgagebalance to get the PMI premiums removed.
IF YOUR NAME IS ON THE TITLE, DEDUCT MORTGAGE INTEREST YOUPAY
DEAR BOB: Last year my mom quitclaimed her house title toherself and me. She recently lost her job and I started paying her mortgage.After my name was added to her title, I got married. My wife and I are nowpaying the mortgage. Can I add my wife’s name to the title so title will beheld by my mom, my wife and me? –Kevin K.
DEAR KEVIN: If your name is already on the title to thehouse, you can then deduct the mortgage interest and property taxes you pay onthat property.
Why complicate things by adding your wife to the title? Insome states, such as California, that could cause a partial property taxreassessment.
I don’t see any advantage — only several disadvantages –of adding your wife’s name to the title. The mortgage interest and propertytaxes you pay will still be deductible on your joint tax return because you arelegally obligated to make those payments. For full details, please consult yourtax adviser.
The new Robert Bruss special report, “How to BuyFixer-Upper Houses with Little or No Cash for Fun and Fortune,” is nowavailable for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or bycredit card at 1-800-736-1736 or instant Internet delivery at
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News