Landowner who built home on lot doesn’t have to worry about deed
Q: We bought a vacant lot and had a house built on it. We have no mortgage; we paid cash for the whole thing.
What happens when we go to sell someday? All we have is a deed to the undeveloped property. We do have a notarized letter from the contractor saying that we paid everything we owed. Do we need a lawyer to draw up a new deed?
--R.L.W.
A: No problem.
If you own the land, you own anything permanently attached to it. Deeds and mortgages seldom mention buildings anyhow.
HOUSE SIGNED OVER to children
Q: My 85-year-old father, who lives out of state, told me he signed over the family home (of more than 50 years) to my brother and me. I encouraged him to speak to a lawyer. He told me he did and completed the transfer. How does this affect my brother and me?
--K. and L.R.
A: Your father may want to protect the house from being taken for his health care in the future. These days, though, Medicaid has a five-year "look-back" on gift transfers, and he'd have to be 90 before the house would be free of possible Medicaid liens.
Your father may have lost the right to take property taxes he pays as an income tax deduction, or he may not. Same with the home seller's capital gains exclusion if he ever sold. You and your brother might be responsible for the capital gain. If you waited to inherit the house, on the other hand, you'd have a current-value, stepped-up cost basis. All those are questions for your father's lawyer and accountant.
With his permission, perhaps you could phone your dad's lawyer and discuss why he did what he did and how the transfer of title fits into his estate plan.
RAIN FLOODS driveway
Q: I bought a house more than a year ago. The street floods when it rains hard, which is not an uncommon occurrence. I'm then left with 4-plus inches of water in my driveway. Should this have been revealed on the disclosure statement? When I bought the house in May 2010, it didn't rain until I had closed. I wouldn't have bought or would have sought concessions if I had known. Do I have any legal recourse?
A: It's worth consulting a lawyer who specializes in real estate. Do it promptly. You'll have to prove that the seller must have known of the defect, perhaps with statements from your neighbors.
One of your attorney's first questions will be "What do you want?" Are you looking to cancel the purchase and give back the house? Are you asking for money? How much? Have you investigated the cost of installing drains?
Edith Lank will respond personally to any question sent to askedith.com.
