Co-owner's financial responsiblity

[sadiedog@wowway]

What is the name of your state? Ohio
I co-own a home with my brother. This is the result of estate planning. Dad has passed on, mom is in nursing home..I know the way the deed is written mom is entitled to something when the house sells, but mom has no assetts to speak of. The house has been empty since June 2006 and was put on the market in June 2007. It was and is empty.

The question:

Brother has estranged himself from the family for about 8 years.
The house is now for sale. The poor real estate agent has worked her tail off to even get him to sign papers which baffles me, but oh well. One would think if you were going to get some $$ you would be apt to sell..

I have paid all the utilities, taxes, insurance, lawn care, snow removal, since June, 2006.

When I decided to sell it the city it is in has a Point of Sale Inspection. I paid that fee as well as the repair of all the violation codes and incidentals associated with putting a house on the market.

I would like my brother to reimburse me 1/2 of what I have spent. Is there somewhere I can cite some law that states he has to.

I don't know if this means anything, but on the Auditor's site for the County it's in brother is listed as primary owner.

I almost had to file a partition to get him to sell it in the first place. There's no way I can afford that and don't have enough $$ to keep eating the expenses until it was settled anyway.

The market is beyond slow in Cleveland, Ohio and that's very close to where the house is and I'm sure you heard on the national news there are tons of foreclosures here.

btw..there is no mortgage on the house.

[FlyingRon]

I have no clue what provision in the deed you have, nor one that would entitle her to any interest in the property if she gave it to you and your brother. I have no idea why she did such a stupid thing. It is a common mistake here and every time someone contemplates it WE HERE ON THE FORUM ADVISE AGAINST IT.

There's no "law" that says co-owners are required to pay equitable shares. You can try a civil action. Probably the best bet is to just have keep track of all the "sale related" expenses and have the attorney or whoever is handling the closing to pay them out of the proceeds.
If you really have a partition suit, this should be a matter of course anyhow.

[tranquility]

One of the reasons partition lawsuits are so expensive are because reimbursements are considered for expenses like what you are paying by the court. Not all would be reimbursed, but some would. Because you are selling by agreement, it seems like you should be compensated, but how are you going to get paid? I've not heard it done, but I suppose you could sue your brother for ownership breaches of duties. Talk to an attorney. You may be able to get a lis pendens on part of the escrow funds if you act quickly. I bet that once brother gets the money in his hands, you will find it very difficult to pry it out.

[HomeGuru]

good responses.

[sadiedog@wowway]

Originally Posted by FlyingRon

I have no clue what provision in the deed you have, nor one that would entitle her to any interest in the property if she gave it to you and your brother. I have no idea why she did such a stupid thing. It is a common mistake here and every time someone contemplates it WE HERE ON THE FORUM ADVISE AGAINST IT.

There's no "law" that says co-owners are required to pay equitable shares. You can try a civil action. Probably the best bet is to just have keep track of all the "sale related" expenses and have the attorney or whoever is handling the closing to pay them out of the proceeds.
If you really have a partition suit, this should be a matter of course anyhow.

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The Deed Reads:
Grantors reserve unto themselves for their joint lives, remainder to the survivor of them, life estates in the above-described property which life estates shall be non-assignable and non-transferrable without the consent of the grantees hereinabove.


My parents did the "stupid thing" under the advice of an attorney as estate planning.
What is wrong with it?

[sadiedog@wowway]

Originally Posted by tranquility

One of the reasons partition lawsuits are so expensive are because reimbursements are considered for expenses like what you are paying by the court. Not all would be reimbursed, but some would. Because you are selling by agreement, it seems like you should be compensated, but how are you going to get paid? I've not heard it done, but I suppose you could sue your brother for ownership breaches of duties. Talk to an attorney. You may be able to get a lis pendens on part of the escrow funds if you act quickly. I bet that once brother gets the money in his hands, you will find it very difficult to pry it out.

Thank you so much! I was in the process of writing him a letter asking for reimbursement, including copies of everything I spent. Do you think I should still do that? My thinking is if he does not reply, that might show he's uncooperative??

The house is still on the market...if I understand you correctly, when it does sell, that's when I notify the escrow company of the expenses? Correct?

Thank you so much for your help with this.

[FlyingRon]

Originally Posted by sadiedog@wowway

-------
The Deed Reads:
Grantors reserve unto themselves for their joint lives, remainder to the survivor of them, life estates in the above-described property which life estates shall be non-assignable and non-transferrable without the consent of the grantees hereinabove.

That's a life estate. It says they can live in the house that they gave away to you and your brother. It doesn't mean they are entitled to anything on it's sale.

My parents did the "stupid thing" under the advice of an attorney as estate planning.
What is wrong with it?

If the facts are as you describe the attorney is incompetent.

The fact is they have no rights to money on the sale. They've given up any such rights by giving the property to you. It precludes them selling the property, or getting a reverse mortgage on it, etc...

It also saddles you with their (presumably) low basis on the house. If the idea was for you to inherit the property when they pass, it would have been better if they retained ownership as the basis would step up to the value on their passing.

[tranquility]

Thank you so much! I was in the process of writing him a letter asking for reimbursement, including copies of everything I spent. Do you think I should still do that? My thinking is if he does not reply, that might show he's uncooperative??

Communication is always a good thing. I would see an attorney to only ask for the things which might be compensable in a lawsuit.

The house is still on the market...if I understand you correctly, when it does sell, that's when I notify the escrow company of the expenses? Correct?

No. You will never notify the escrow company regarding the expenses. If you place a lis pendens (notice of lawsuit) against the escrow on brother's portion of the proceeds, they may disburse all but what is covered by the claim. You will do nothing on this on your own. Nothing. It is not a self-help issue. You must see an attorney to advise you.

[sadiedog@wowway]

Originally Posted by FlyingRon

That's a life estate. It says they can live in the house that they gave away to you and your brother. It doesn't mean they are entitled to anything on it's sale.

If the facts are as you describe the attorney is incompetent.

The fact is they have no rights to money on the sale. They've given up any such rights by giving the property to you. It precludes them selling the property, or getting a reverse mortgage on it, etc...

It also saddles you with their (presumably) low basis on the house. If the idea was for you to inherit the property when they pass, it would have been better if they retained ownership as the basis would step up to the value on their passing.

The idea was for them to live in it forever, and to protect it. They would never move from there, ever unless it was medically necessary as in mom's case. My parents are old school European. They lived in that house for 62 years. Dad passed away 2 yrs ago and within 3 months mom's dementia/Alzheimers exacerbated to a point where she needed 24 hour care. We could not afford that, so she went into a nursing home. Two different attorneys advised us/them to do the Life Estate. They are the lucky few that had a great pension, so needing a reverse mortgage would not have ever been necessary.

At the time brother was talking to us, mom and dad were both competent and that's how it all happened.

[sadiedog@wowway]

Originally Posted by tranquility

Communication is always a good thing. I would see an attorney to only ask for the things which might be compensable in a lawsuit.


No. You will never notify the escrow company regarding the expenses. If you place a lis pendens (notice of lawsuit) against the escrow on brother's portion of the proceeds, they may disburse all but what is covered by the claim. You will do nothing on this on your own. Nothing. It is not a self-help issue. You must see an attorney to advise you.

I hear you! I didn't think it was something to do on my own, but I thought I'd ask.

[tranquility]

By-the-by, the attorney may not be incompetent. One general practice of estate planning/elder law planning is to take assets out of the possiblity of medicare reimbursement. True, in this case it may make a greater tax burden to you in capital gains when the house is sold, but that is balanced by the fact the government will only be able to take the value of the life estate for any reimbursement. With the cost of medical care, that is a good bet in many circumstances when the house is the only real asset. (Which also points out that parent's are entitled to some money--that which is the value of the life estate.)