By Robert J. Bruss
DEAR BOB: My two sisters and I hold the title to my mother's house, but she holds a life estate. There is no mortgage. We want to take out a home equity line of credit to pay for a new roof and other repairs, but two banks told me they wouldn't approve such a loan because of the life estate. My mother can't apply for a home equity loan because she doesn't hold title. Are we being told the right information? -- Carolyn T.
DEAR CAROLYN: It makes a great deal of sense for every home-equity lender in the country to reject your loan request. The reason: If the lender has to foreclose for non-payment, it can't terminate your mother's life estate, unless she renounces it or dies, to obtain marketable title.Now you know a major reason why I highly discourage life estates. I don't know who advised deeding the property to you and your sisters with your mother keeping a life estate, but that was a mistake. Now she can't get a home equity loan or even a senior-citizen reverse mortgage if she is 62 or older.
Your mother can renounce her life estate to you and your sisters by signing a quitclaim deed. Then the co-owners can obtain a home equity credit line to pay for a new roof and other repairs.
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DEAR BOB: My husband died about four years ago. We held title as joint tenants with right of survivorship. Our house was our major asset together. I haven't done anything about the title, but as I read your articles, I am thinking I might need to go to the probate court to clear my title. Do I need to hire a lawyer? -- Angie W.
DEAR ANGIE: You don't need a lawyer. However, clear the title to your home now, before you have an urgent need to do so. As the surviving joint tenant, you automatically received 100 percent ownership without the need for probate court proceedings.
In most states, all that is required to clear the title is that you record a certified copy of your husband's death certificate, along with an affidavit that you are the surviving joint tenant. A phone call to your local recorder of deeds office clerk will give you exact details of what you will need. Back to Top
DEAR BOB: I live in a community with a homeowners association protective covenant. It says "campers" may not be parked on the homeowner's property or on the street. The street is public. There are no restrictive entry gates. There are no city restrictions on parking on my street. Do you think I can legally park my "camper van" on the street and win the issue in court? -- Mel F.
DEAR MEL: Are you 100 percent certain the street in front of your house has been deeded or dedicated to the city? If it has, then the homeowners association cannot prohibit you from parking your camper van on the street.However, if the city does not "own" the street, even though it is open to the public, the homeowners association is responsible for its maintenance. That means they can impose the rules.I'm sure you don't want your neighborhood homes to decline in value by having lots of ugly campers parked in driveways and on the street.
When you bought your home, you agreed to abide by the CC&Rs (covenants, conditions and restrictions). Find a nearby storage facility to park your camper. That will probably be much cheaper than paying fines and possibly being taken to court by your homeowners association. For details, consult a local real estate lawyer.
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DEAR BOB: Can I include a clause in my rental agreement for a house prohibiting smoking? -- Winston R.
DEAR WINSTON: I am not aware of any state law that says a landlord cannot prohibit smoking in a rental house or apartment. However, you have no legal right to enter the property to enforce such a restriction except upon reasonable notice that, in most states, is interpreted as at least 24 hours' notice. For details, consult a local landlord-tenant lawyer.
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DEAR BOB: About four years ago, three of my college fraternity brothers and I bought a vacation home as tenants-in-common. We all have good jobs, pay our share of the expenses and get along great. Everything worked out well until one co-owner got married about a year ago. We liked his new wife very much until she started demanding a share of the vacation cabin. Her husband quitclaimed to her a 1/8 share and he kept a 1/8 share. But now she wants to force a sale of the vacation home because it has greatly appreciated in market value. Oh, I forgot to tell you, she is a lawyer. She says she will be satisfied if we three remaining co-owners buy out the one-fourth interest of her husband and herself. Can she force us to buy her out? -- Devon H.
DEAR DEVON: Your situation is a classic example why, instead of taking title as tenants-in-common, you four original co-owners should have formed a partnership so a written agreement could provide for situations such as you describe.Unfortunately for you and the others, any co-owner can bring a partition lawsuit to force the sale of the property. Majority rule does not apply.
If the three remaining co-owners want to keep the vacation home, I suggest you hire an appraiser to determine its fair market value, and then negotiate a buyout of the troublesome co-owners. For more details, consult a local real estate lawyer.
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DEAR BOB: I own a condo in a 26-unit condo complex. Our board of directors is out of control. The building is managed by the homeowners association president, who controls the checkbook. He pays himself various fees, and the treasurer goes along because she is his wife. Unfortunately, they own six of the 26 units. Many owners don't live in the building so they don't care how corrupt the operation has become. At the last annual meeting, only 11 owners showed up. But there was a quorum because of proxies given to the association president. What can we do about an out-of-control situation like this? -- Vern W.
DEAR VERN: The best solution is to get the absentee owners to participate and vote to elect a new group of directors at the next annual meeting. You may want to consult a lawyer who specializes in condominium law, but a lawsuit could be a costly waste of money. Sorry, there is no easy solution to your problem.
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DEAR BOB: The house next to mine has been vacant since June 2005. It is very run-down. The owner has been cited for building code violations, such as making additions without building permits. He has a long history of not making necessary repairs. Now he is considering tearing down the house and garages to sell as a vacant lot. We have one common wall and a common fence. We have both owned our properties since the 1970s. I paid for the common fence. What can I do to protect myself and be sure I get a fair settlement? -- Shulamith B.
DEAR SHULAMITH: From your description, it seems you just need to be sure your neighbor doesn't damage your common wall or the common fence if he demolishes his house and garages. You should contact the appropriate city department that could issue a demolition permit to be certain you are notified in advance.
As for getting a "fair settlement," you are not entitled to any compensation, presuming the neighbor's demolition doesn't damage your common wall or fence.
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DEAR BOB: About five years ago, an "estate planning attorney" talked us into putting our house into an irrevocable trust for various reasons. Now we need to sell our house because of health and financial reasons. However, the lawyer who created our irrevocable trust has died and we don't know what to do. Any suggestions?
-- Ted D.
DEAR TED: Your situation is a classic example why it is usually not wise to create an irrevocable trust. Your only alternative is to consult another lawyer to review your situation to investigate if there is any possibility of terminating your irrevocable trust. If you have received benefits, especially tax benefits, it may be virtually impossible to terminate the trust.
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DEAR BOB: Can I get a senior citizen reverse mortgage although I have a mortgage balance of about $120,000?My house is worth about $800,000 but will probably be worth $1 million by the time I need the reverse mortgage funds. -- Karen T.
DEAR KAREN: Presuming all owners of your principal residence are at least 62, you can obtain a reverse mortgage now. However, because a reverse mortgage must be recorded as a first mortgage, $120,000 of the proceeds will be used to pay off your existing first mortgage. The balance of your reverse mortgage commitment can be used for lifetime monthly income; a credit line, except in Texas; or lump-sum advances when needed.
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DEAR BOB: I own an older six-unit apartment building.A disabled Iraq War veteran applied to rent a vacant first-floor one-bedroom unit. We agreed it is perfect for him because it has wide doorways for his wheelchair. Frankly, it's a tough apartment to rent because it is small and on a noisy street. It is about 50 feet from a bus stop where there are handicap-access buses that he can take directly to a nearby college where he plans to study computer technology. The problem is that there are four steps from the public sidewalk to my building's front door.The veteran's mother, a lawyer, says federal law requires me to pay for handicapped access to my building. To remove the four concrete steps and create a concrete ramp from the public sidewalk will cost about $4,000. She threatens to sue me. Do I have to pay? -- Claudia R.
DEAR CLAUDIA: No. The Americans with Disabilities Act requires residential landlords to allow disabled tenants to install access ramps at their own expense and, if desired by the landlord, to remove such ramps when the tenant vacates. If the tenant or the applicant's mother can't afford to pay the $4,000, perhaps a local civic or veteran's group can help. Or, because the ramp will make your building more desirable and safer without the steps, perhaps you should split the cost.
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DEAR BOB: As an insurance agent for more than 24 years, I must disagree with that item you ran several months ago from an insurance company employee who said the homeowner's insurance company must be notified when title is held in a living trust. Many of my insured homeowners hold title in their living trusts. I've never seen a problem paying a claim just because the title is in a living trust. Frankly, it would complicate my life as an insurance agent if I had to change all those policies. The only circumstance that caused a slight problem was when the homeowner became incompetent and the successor living trust trustee filed a policy claim. The insurance company asked for a copy of the living trust to be certain payment to the successor trustee was proper. Perhaps this is a company-by-company decision for insurers. -- Jonathan B.
DEAR JONATHAN: I heard from several other insurance agents who said there was no need to notify the insurer that a homeowner's title is held in their living trust. Just to be certain, homeowners should check with their personal insurance agent to learn if it necessary to notify their insurer of holding title in their living trust.
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DEAR BOB: I was recently widowed. The house is now in my name. How do I prevent probate, how expensive is it, and how long before my heirs can sell the house?
Should I add my heirs' names to the title of my house now? -- Phyllis L.
DEAR PHYLLIS: Whenever possible, it is best to avoid probate court costs and delays. After your death, it may take six months to a year or longer to convey title if you leave your house and other major assets to your heirs by your will. The probate costs vary widely by the state legal fees involved. However, if you leave a small estate, many states have probate avoidance exceptions. A home worth $100,000 or more usually puts you out of this small-estate exception. The two major ways to prevent probate of your residence are holding title in your revocable living trust, or holding title in joint tenancy with right of survivorship with your heir. Either method will avoid probate court costs and delays.However, the major drawback of joint tenancy is that you give up control over your home. To illustrate, suppose you add your heir's name as a joint tenant.But you later decide to sell the house, perhaps to pay for care in a convalescent home. Unless your joint tenant consents, you can't sell your residence.
There are no major drawbacks to a revocable living trust. You can change your beneficiary at any time. Or you can revoke the living trust. Back to Top
DEAR BOB: In your experience, do title insurance companies get kickbacks from mortgage lenders for referring business? I know mortgage lenders require title insurance, but do they get fees for recommending specific title insurers? -- Andrew B.
DEAR ANDREW: It is illegal for title insurance companies to pay a referral fee or any other kickback to a mortgage lender who refers business to a title insurer. Of course, there are cozy relationships, where a title insurance representative takes a mortgage lender out to lunch. But monetary payments are strictly illegal. Back to Top
DEAR BOB: In 2003 my then-boyfriend and I bought a condo together as tenants-in-common. Because my credit and income were much better than his, the lender suggested obtaining the mortgage and taking title in my name alone since I provided the down payment. However, about a month later, I signed a quitclaim deed to my boyfriend for a 50 percent interest in the condo -- he paid half of the mortgage payments each month. In October 2005 I caught him cheating on me and I kicked him out. I haven't heard from him since. How can I get him off the title? -- Jennie J.
DEAR JENNIE J: There is no easy way to get him off the condo title. Presuming you can find him, you will need to sweet-talk him into signing a quitclaim deed of his 50 percent interest to you. Because you paid the down payment, he has little or no equity in the condo. But he will probably want something in return for his notarized signature on the quitclaim deed.
Cash usually works. Sooner or later, he will need $1,000 or $2,000 cash. Don't appear eager. It might take six months or longer, but eventually he will accept your offer and sign the quitclaim deed. However, be sure his signature is notarized and the deed is in recordable form. Back to Top
DEAR BOB: I need to sell my condo, but I have misplaced the four documents I received at the time of purchase in 1996: the original recorded deed, bill of sale, certificate of approval and the title insurance policy. The lawyer's office no longer has copies of these documents. Do I need all four documents? What should I do?-- Nancy M.
DEAR NANCY: The exact answer depends on the state where your condo is located. Your lawyer should have retained copies of your documents. However, you might not need them. I suggest you contact the title insurance company that insured your purchase. They can inform you which documents are required in your state and what can be done if you can't find these documents. If you handle the sale of your condo through the same title company that insured your purchase, the transaction will probably go smoothly.
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DEAR BOB: Several times you mentioned "interest-only" mortgages. What are the pros and cons of such loans? -- Leigh C.
DEAR LEIGH: The primary advantages of interest-only mortgages are your monthly payment is at the minimum amount, and your payment is 100 percent tax-deductible interest.The primary disadvantage is you won't be building any equity in the property by paying down the mortgage balance each month.
If you plan to keep the property only a few years, then an interest-only mortgage is advantageous. However, if you expect to keep the property many years, and eventually want to own it free and clear, an amortized mortgage would be better.
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DEAR BOB: I just received notice from my condo homeowners association that I am in violation of the covenants, conditions and restrictions for having red window treatments. I looked in the CC&Rs and there is no such mention of that rule. I never received a copy of the CC&Rs before I bought the condo. The window treatment has been up for more than 13 months. Is there any way I can fight this?
-- Kimberlee K.
DEAR KIMBERLEE: Just because you didn't ask for and receive a copy of the homeowner association by-laws, CC&Rs and rules doesn't mean you are excused. Your real estate agent should have provided these important documents before you took title. I suggest you comply by having your red drapes or window coverings lined with a white material. The cost will be far less than fighting your homeowners association if you are in violation of its rules.
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DEAR BOB: How easy is it to clear a title for resale after a tax deed is bought at a property tax auction?
-- Jan C.
DEAR JAN: Property taxes are first priority in the title chain. If you acquire a property title at a tax lien sale, that sale wipes out any junior encumbrances such as a mortgage or judgment lien.
The exact answer to your question depends on whether you acquired a tax lien certificate or a tax deed. The state law where the property is located determines what you own. If you just have a tax lien certificate, you do not yet own the property until the owner fails to redeem your certificate. However, if you bought a tax deed, that sale should have wiped out any other encumbrances on the property. Consult a lawyer where the property is located for details.
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Readers with questions should write Robert J. Bruss at 251 Park Rd., Burlingame, Calif. 94010 or contact him via his Web page,http://www.bobbruss.com
Copyright© 2006 The Washington Post Company
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