Mortgage co-signer’s name shouldn’t be on title

DEAR BOB: About five years ago, I co-signed a home mortgagefor my nephew and his wife. They were newlyweds buying their first home. Theyboth had great jobs and great income, but no credit history so I volunteered tohelp them get a mortgage loan at my bank. Since then, they have done very well.He has been promoted about five times and now earns more than I do. Sherecently “retired” to have a baby boy, which they named after me.However, when I co-signed their mortgage, the bank insisted I go on the titleto their modest house, which I did. They recently refinanced the mortgage totake out some tax-free cash so I am now off the mortgage. But I am still on thetitle, although there is no reason for that. When I mentioned to my lawyer Iplan to sign a quitclaim deed to them, he advised me not to do so because thatwould create a gift tax situation. As I never paid any cash for the house, haveno equity interest in it, and was merely on the title as a convenience, do youthink I have any gift tax obligation? –Curt T.

DEAR CURT: No. If you have no equity to convey, you won’t begiving away anything of value. As you state, your name was on the title merelyas a co-signing convenience to help the home buyers qualify for a homemortgage.

Purchase Bob Bruss reports online.

However, before you sign and record a quitclaim deed, pleasecheck with the local tax assessor to see if that will cause a reassessment ofthe property and raise the property taxes.

A federal gift tax return is due only when you gift assetsexceeding the annual $12,000 exempt amount per donee. In this situation, yoursigning a quitclaim deed clearly isn’t worth more than $12,000 each to yournephew and his wife. For more details, please consult your tax adviser.


DEAR BOB: My sister signed her house over to her daughterand son-in-law because they said they would provide care for her all the days ofher life. She is 79. She and her son-in-law don’t get along. The house is worthover $800,000. Have you ever heard of a person reversing a deed? –Sloan J.

DEAR SLOAN: It is virtually impossible to “undo”or reverse a recorded deed unless there is strong evidence of fraud ormisrepresentation. Failure of consideration could be another reason but yoursister would need strong proof, such as the failure to the daughter andson-in-law to take care of her as agreed.

Just because your sister doesn’t get along with theson-in-law is not a legal reason to rescind the deed. If there is proof ofelder abuse or other improper conduct, there might be grounds to take legalaction. Your sister should consult a local attorney to discuss the situation.


DEAR BOB: Can a condominium homeowner’s association enactspecific times for workers to work on individual units, such as only between 10a.m. and 4 p.m.? This seems unreasonable. Please help. –Trabiezo O.

DEAR TRABIEZO: Presuming you own a condo that is under thecondo homeowner’s association jurisdiction, you have a voice in the managementof the association. You should politely notify the association in writing ofyour disagreement with the short work hours for renovation of individual unitsand ask to bring the matter up at the next board of directors meeting.

The association, or its management company, can setreasonable work hours to prevent unreasonable disturbance of the condo owners.However, you have the right to politely object and suggest more fair workhours, such as 9 a.m. to 5 p.m. on weekdays, for unit renovation work.

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 Questions for this columnare welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center

Copyright 2007 Inman News

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