Q: I read your last posting in the Tribune regards options for selling jointly owned property. I have a horrific situation not for the faint at heart. We are two brothers fighting worse than a Spanish bull ring.. Animosity exists between my older brother and my wife. He has no rush, and enjoys the comfort when he comes to Chicago to stay as long as he wishes in the basement and collects rent from the first floor of this 2 flat. Meantime I live with my wife on the 2nd floor. We want out of this situation. What once was a family 2 flat has now become a mixed unit family and an income producing property for my brother.
We need a way out but he will not agree to any definite time line. What I am left is with an unhappy wife and an unbearable situation. Can you suggest what is the cost of a partition. How guaranteed are we that the judge eventually will give an order for partition to take place, what is the precise costs we will incur with a lawyer. Does the other party share in the cost of bringing this matter to court. Jerald.
A: Jerald. Partition is a matter of right throughout this country, although different states have different rules and procedures. When two or more people own property, and someone wants out of the transaction, they either have to reach a friendly (out-of-court) agreement, or file suit in court for what is called “partition”.
The word speaks for itself; the court will force the sale of the property. Typically, the court will either authorize a real estate broker to work on the sale or in some cases, the court will actually hold a good old fashioned auction in the courthouse.
Either way, however, from my experience, the only winners are the lawyers and the other professionals who get involved in the sale.
I have been involved in a number of such lawsuits. Typically, momma dies leaving a house for son and daughter. Son lives in a different state and wants to sell, but his sister has been living in the house for several years. So the brother files suit against his sister to force the sale.
Jerald. I suggest you retain a local real estate attorney. If the lawyer believes you have a case for partition, have him/her send a strong letter to your brother, explaining that you plan to file such a lawsuit unless you can reach an amicable resolution. You should make a reasonable settlement proposal in that letter. The letter should explain, in the simplest terms, the negative ramifications of a partition lawsuit. Sometimes, the threat of being taken to court as a defendant acts as a spur to reaching agreement.
I cannot provide you answers to all of your questions; your attorney should be able to do so.
But, there is a lesson in this for anyone planning to own property with another person who is not your spouse. Avoid the problems that Jerald is facing. Enter into a written agreement – before you take title – spelling out such things as what happens if I want to sell; what happens if I die; what happens if I cannot afford the monthly upkeep.
A good attorney will be able to assist you in preparing such an agreement.
Q: I am hoping you can direct me to someone who can help straighten out a mess I’m trying to solve for my niece and nephew (adults). My sister died almost 3 years ago and the mortgage and documents pertaining to their home only bear my sister’s name. The 3 of them lived in that house and my niece and nephew continue to live there. They have been attempting to maintain the house and also make mortgage payments - but have become delinquent on mortgage payments possibly since March 2013. The bank who holds the mortgage will not speak to them because their names are not on the documents.
As I understand it, two steps must be taken to clear up this mess. One: They’ll need a lawyer to prepare and file documents to have them declared her only heirs; and Two: then negotiate with the bank to obtain a more reasonable rate of interest so they can pay the mortgage payments.
SO - I’ve been trying to find an attorney to help with Step 1 because they can’t afford to pay legal fees besides filing fees. Can you advise me of some sources for free legal assistance. Carol.
A: Dear Carol. You are right. You need an attorney who can make sure that your niece and nephew go on title. Depending on the law in your state, a probate proceeding will have to be opened.
There are privacy acts that prohibit banks from talking to persons who are not actual borrowers. Once your relatives are on title, then the bank should be able to communicate and hopefully work out a loan modification agreement.
Every state, most counties and some cities have Bar Associations. These associations have legal referral programs – some where you have to pay and others (if you meet the requirements) may provide free legal assistance.
I recommend you contact the local Bar Association in your area and discuss your situation.
Alternatively, I know that many churches and synagogues have programs where the congregants who are lawyers will volunteer one day per month to provide legal guidance.
Q: My condominium unit was destroyed in Hurricane Sandy last year and we are still struggling to get financial assistance. I read somewhere that FEMA is now making loans and grants for such rehab programs. Do you know about this? Herb.
A: Herb. Thousands of condominiums and housing cooperatives that were damaged when Sandy struck the East Coast last year learned – after the fact – that they were not eligible for money grants from the Federal Emergency Management Agency (FEMA). Unlike single family homes which can get both grants and loans, community associations are considered “business associations” and are only entitled to loans. As we all know, loans have to be repaid; grants do not.
Accordingly, Congressman Steve Israel (D-NY), along with several other Democrat and Republican representatives, recently introduced a bill to correct this problem. “A storm does not discriminate where it hits”, Israel said, “and FEMA should not be discriminating what type of homeowners is helps. It seems clear,” he added, “that FEMA’s policy is the result of not understanding the role of co-ops and condos in our community.”
The bill that was introduced (H.R. 2887) would amend the Robert Stafford Disaster Relief and Emergency Assistance Act. That is the law, first enacted back in 1988, which among other things, created FEMA. According to Representative Israel, when it became clear that neither the Department of Homeland Security or FEMA were willing to unilaterally change their policy toward community associations, he “came to the conclusion that a legislative solution is needed to make the change”.
The bill, if enacted, would make it clear that condos and cooperatives are to be considered the same as single family houses. However, instead of the maximum amount of disaster relief that single homeowners can get, the bill would allow the President – and presumably FEMA – to adjust by regulation the cap for those associations.,
The Community Association Institute (CAI), a national association representing homeowners though out the country, has endorsed the bill, stating it “is a big step forward for community associations receiving equitable treatment under FEMA disaster guidelines.”
However, CAI cautioned that “it does not address all of CAI’s areas of concern. ... homeowner associations are not included in the bill”.
Readers should understand that this is not an isolated East Coast situation. If your community association – located anywhere in the United States – is damaged or destroyed, you need all the financial assistance you can get. The pending bill is designed to provide such assistance.
For more information, talk to your congressman and senators about this issue.
Q: I have poor credit (578), make $105,000 annually with $ 40,000 in yearly debt. I want to borrow $20,000 in a home equity loan or line of credit. My house is appraised at $275,000 and I have no mortgage. I am looking to payoff balance in 90 days. Can you advise. Chris.
A: Chris: join the crowd, you are not alone. I know that banks have significantly tightened their loan requirements, but you have no mortgage and clearly some bank should be willing to make you a loan.
If not, are you 62 years or older? While I am not a real fan of reverse mortgages, that is one way of getting the cash you need.
Finally, if all else fails, you should contact what is known as a “hard money lender”. That is a lender who – to compensate for the risk – will charge you a high (sometime very high) mortgage interest rate. There are legitimate hard money lenders and there are many not-so-legitimate lenders. If you really need the money and have to go to such a lender, I strongly advise you to retain a lawyer who can review the transaction to make sure that you are protected. I have run across some lenders who end up taking your house instead of lending you money.