DEAR BOB: My mother, now divorced, owned a house with herformer husband. But before the divorce papers were finalized, without mymother’s knowledge he changed his title to the house from joint tenancy withright of survivorship to tenants in common. He passed away recently. Now hisnephew is claiming the house under his will. My mother is still on the title andloan papers. Can a joint tenancy title be changed without permission of theother joint tenant, and is my mother entitled to all or half of the property?–Leslie LeB.
DEAR LESLIE: For simplicity, I presume the house is not in astate allowing a married couple to hold title as tenants by the entireties (aspecial form of joint tenancy that cannot be terminated by one spouse alone).If the divorce settlement papers didn’t specify what was to happen to the housetitle after the divorce, each still owned half of the house after the divorce.
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Unfortunately for your mother, a joint tenant with right ofsurvivorship does not need permission from another joint tenant to change theownership method to “tenants in common.” Also, her ex-husband couldhave sold his half-interest in the property or given it away without herpermission.
Presuming the ex-husband executed and recorded a validquitclaim deed from himself as a joint tenant to himself as a tenant in common,that broke up the joint tenancy without notifying your mother. The result isthe ex-husband’s half of the house became subject to his will, which apparentlyleft his half of the house to the nephew.
Under the law of virtually every state, your mother stillowns her half of the house, but as a tenant in common and not as a joint tenantwith right of survivorship. The fact her name is on the mortgage papers isirrelevant to the title.
Perhaps she should offer to buy out the nephew’s inheritedhalf. Or maybe she should ask him to buy her out. Better yet, perhaps theyshould try to get along as tenant-in-common co-owners. For more details, sheshould consult a local real estate attorney.
GET A SURVEY TO PROVE TRUE BOUNDARY LOCATION
DEAR BOB: My next-door neighbor insists the property linesfor our properties are wrong. He is a “bully type” and insists myroadside mailbox is on his property. He has even gone so far as to place surveyflags along the supposed boundary. Is there anything short of legal proceedingsor another survey that he will contest? –Mike H.
DEAR MIKE: I suggest you hire your own licensed surveyor todetermine the correct boundary location. I’ve heard of a few situations wherelicensed surveyors disagree on the correct boundary location, but thosecircumstances are very rare. Until you have written proof where the trueboundary is located, you’re in a weak situation.
PITFALLS OF OUT-OF-TOWN PROPERTY OWNERSHIP
DEAR BOB: I am at my wit’s end. I am a landlord with atownhome several hundred miles from my residence. The tenants didn’t pay therent for two months. They moved out in the middle of the night. I contacted alocal attorney there. He wants $1,000 up front to file a lawsuit against themand try to serve them with a process server. Can I file the court papers myselfand try to serve them, as my funds are limited? –Pamela F.
DEAR PAMELA: You forgot to tell me how much the ex-tenantsowe for unpaid rent, the amount of their security deposit, and if they have anyassets. If they moved out in the middle of the night, they might not be worthsuing.
Yes, you could prepare the summons and complaint yourself,but I don’t recommend it, as you are likely to make mistakes. Presuming youfind the ex-tenants, have a process server serve them with the summons andcompliant (you can’t do that yourself), and get a court judgment; then you haveto try to collect it.
Your situation shows the pitfalls of long-distancerental-property ownership. But a big part of this problem was you! You nevershould have let your tenants get two months behind in the rent. This might be agood time to fix up that distant property and sell it.
As a landlord, my policy is to make a friendly phone call(or visit if I want to check up on the property) when the rent is three dayslate to remind the tenant the rent hasn’t been received. Sometimes it’s just anoversight. On the fourth or fifth day, I post the “Pay Rent or Move”notice on the door and then keep the eviction action moving as fast aspossible.
In more than 35 years of renting to tenants, I’ve had toevict only three tenants in court. But I’ve started the procedure so many timesI’ve lost count. Most tenants either pay up, move out, or we reach an agreementto pay the overdue rent weekly.
HOW TO CLAIM TITLE BY ADVERSE POSSESSION
DEAR BOB: My favorite article you wrote was the one aboutobtaining title by adverse possession. My question involves an abandonedproperty that is going to tax sale. What is the best way to post notice on theproperty and remain completely in honor? –Rodger W.
DEAR RODGER: If you have been occupying the property withoutthe owner’s permission for the required number of years in the state where itis located, you may qualify to obtain title by adverse possession. Therequirements are open (obvious), notorious (not secret), hostile (without theowner’s permission) and continuous occupancy. In addition, you must have paidthe property tax for the required number of years.
If you qualify to obtain title by adverse possession buthaven’t paid the overdue property tax, hustle down to the tax collector’s officeto pay those taxes so the property doesn’t go to the tax sale where somestranger can obtain title with his/her high bid.
After you pay the property tax, presuming you meet the testsexplained above, you can bring a quiet title lawsuit to perfect your title byadverse possession. You’ll need a local real estate attorney for that.
BEST WAY TO LEARN IF SELLERS KNEW OF HOME DEFECTS
DEAR BOB: My son and his wife bought their first home inAugust 2006. With the first heavy rain, the sewage from the septic tank backedup into the house. They had the tank pumped out. But at the next heavy rain,the same problem happened again. No mention was made during the purchasenegotiations about any septic tank problems. Do they have any recourse againstthe sellers? –Harry F.
DEAR HARRY: This situation shows why buyers of homes withseptic tanks should always make their purchase offer contingent on asatisfactory septic tank inspection before the purchase closes.
Your son and his wife might have recourse against the sellersif they can prove the sellers knew of the problem and failed to disclose itbefore purchase.
The best way to learn if the sellers knew of any homedefects is to ask the neighbors. They usually know if there were any problemswith the property before the sale.
If not, it could be a new problem and there might not be anylegal recourse against the sellers to have the septic tank rebuilt to operatecorrectly. For more details, the buyers should consult a local real estateattorney.
THE ONLY WAY TO AVOID TAX ON RENTAL-PROPERTY SALE
DEAR BOB: My wife owns an inherited rental house that weplan to sell this year. We estimate a $300,000 capital gain above thestepped-up basis market value on the date of inheritance. If we buy a new home,can we obtain any exemption from tax on the capital gain? We have not lived inthe house any of the last 60 months –Greg C.
DEAR GREG: There is only one way to avoid tax on the sale ofa rental property. It is to make an Internal Revenue Code 1031 tax-deferredexchange of the rental house for another property to be held for investment oruse in a trade or business, such as a rental house of equal or greater marketvalue and equity.
At the time of the IRC 1031 exchange, both properties mustbe rentals. However, you can eventually convert the acquired rental propertyinto your personal residence, if that is your wish. To show rental intent, mosttax advisers suggest renting the acquired property at least six to 12 monthsbefore moving in. For full details, please consult your tax adviser.
The new Robert Bruss special report, “The 10 KeyQuestions Smart Home Buyers Ask to Avoid Getting Ripped Off,” 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 2007 Inman News