Property claims can easily split families

Published 9:00 pm Wednesday, January 26, 2005

I recently received an e-mail from a reader who reminded me to remind you of why it’s rarely – if ever – a good idea to include your children’s names on the ownership title to your house.

“Three years ago, my mother signed over her home to her children,” the reader wrote. “There are six of us. She is now in a nursing home, and we would like to sell the home because we are getting older and live out of state and can no longer keep up with the maintenance or the taxes. The home sits on beautiful property on the river. Four out of the six want to sell the home, but the other two are stalling with signing the papers. Is there anything we four can do to speed up the process if the other two are not willing to sell or buy out the others at the going rate on the property?”

Elderly parents often sign over their home or add their children’s names to the title to avoid probate, the legal process in which a court supervises the distribution of assets according to a will or as dictated by state law.

What they fail to consider is that once you put someone’s name on your house, you have given him or her an ownership interest in your property.

To answer this reader’s question, I turned to two attorneys.

William Gessner of the Quinn O’Connell Jr. firm in Washington, D.C., said that given the situation presented by the reader, there is no quick way to force a sale or a buyout.

“Each of the siblings has an undivided one-sixth interest in the property,” he said.

And you know what that means, right?

Yes, legal action.

Gessner said each of the owners of the house has the right to sue to have the property divided and sold. The proceeds of this forced sale would then be distributed to the owners.

Gessner said depending on the opposition to the sale, the time frame for such an action is generally a year or more, and the cost would probably run to several thousand dollars.

However, nothing moves people like potential legal action against them.

“The filing of the action – and perhaps even the threat to do so – may result in a settlement among the siblings,” Gessner said.

Arthur Konopka, who runs his own law firm in Washington, D.C., explained the process further. When property co-owners can’t decide whether to sell, they may have no choice but to bring legal action.

Konopka, who specializes in real estate, said he would advise the reader to check to make sure the deed was in fact changed.

“When they say that their mother ‘signed over’ the property to them, I presume they mean she signed a deed conveying the property to them, and that this deed has been recorded in the land records of the jurisdiction where the property is located,” he said. “Anything less than a recorded deed will mean that their mother still owns the property.”

OK, so assuming the deed was properly recorded and the siblings can’t reach an agreement, those who do want to sell can file what’s generally called a complaint for the partition of jointly owned property, Konopka said.

All local jurisdictions allow a suit of this sort under one name or another, he added.

The suit asks the court to appoint an independent party to evaluate the property and arrange for its sale. If the court agrees and issues the order, an independent party, sometimes called a trustee or receiver, will sell the property and distribute the proceeds to the property’s owners according to the judge’s orders.

“It is usually unfortunate when this procedure must be used, as the sales do not usually yield as great a price as when the property is fixed up, polished and shown in its best light,” Konopka said.

It is indeed a sad situation when siblings can’t agree on the right thing to do. What if the money was going to be used to help with the nursing home costs for the mother?

The fact is, if the property is sold, the two siblings who are holding out are entitled to their share of the proceeds, and they don’t have to use the money to help Mom.

“They are flat-out owners, and their obligation is only moral, not legal,” Konopka said.

So if you are thinking about changing the title on your home, be forewarned: Even reasonable people can’t be counted on to do the reasonable thing when money and property are at stake.

Washington Post Writers Group