Homeowner feels emotional about selling home nephew is occupying

Q: Mom left her house to my brother and me, a modest three-bedroom with no mortgage. My brother's son has been living there since before mom died, rent-free. He promised once his business was established he would buy my half. Meanwhile, he would pay the real estate taxes and send me deposit money to come off the price when he purchased. There was no legal contract, which was a huge mistake.

My nephew kept his end at first, sending me $10,500 in all, plus property taxes. But two years ago he abruptly stopped, and I found out he is delinquent on the taxes. My brother and I agree the house should be sold. Both of us could use the money. However, neither has the heart to kick my nephew out. It has fallen on me to be the bad guy and I just cannot follow through.

I know he will continue to milk this until he is forced out. I tried going through counseling at my job for a reference to a legal mediator, but I ended up just crying to the counselor. This is a huge burden. - C.

A: A written contract wouldn't have made much difference if your problems are emotional. The mystery here is why your nephew stopped depositing money and ignored the taxes. Have you asked him?

He isn't the one who's delinquent on those property taxes; as the owner, you are. Pay them now, before they accumulate any more interest and penalties. Otherwise you could all lose the house with no benefit to anyone.

Then I'd suggest a pleasant, firm letter, preferably from your lawyer, explaining that you can no longer afford to keep the house.

You'll be putting it on the market for X dollars next March, but before involving the expense of an agent, you'd like to give your nephew first refusal.

He would, of course, get credit toward his down payment, $10,500 minus whatever went to bring the tax bills current. And if he is unwilling or unable to buy, you'll return the rest of his deposit.

If he's having money problems, that last bit may sound attractive. This will, of course, require you to have cash available to give him when he moves out.

Let me know what happens.

What to do about Tax Problems?

Q: We are buying our home on a land contract. It states that we send extra money every month to pay the property taxes. The seller is supposed to keep it in a separate account and pay the taxes when they come due.

Twice now the seller has paid those taxes late, once with extra interest due and once with an actual penalty. This means he asks for extra money from us. I don't know what to do - stop paying extra for that account, or ask him to show us proof he's putting our money in there every month? And what do I do if he isn't? Can I pay the taxes myself directly? - G. W.

A: With a land contract you are buying the property on a sort of layaway plan, moving in as tenants while you accumulate enough payments to receive a deed.

You should not be paying the late-payment penalties. Do not break your share of the bargain except on a lawyer's the advice. Take all the documents you have - contract, information about tax payments and everything you can think of - to a lawyer who specializes in real estate and ask for advice.

Edith Lank will respond personally to any question sent to www.askedith.com.