QUESTION: My husband and I own our home and two rental properties in joint tenancy with right of survivorship. We have been married almost eight years. It is my second marriage and his first.
Recently we were at a cocktail party where we met a real estate lawyer. She said there ought to be a law against joint tenancy because it often disinherits people. She said if I die before my husband, my children from my first marriage (who live with their father) will not receive any interest in the house. If this is true, what do you recommend we do?
ANSWER: The real estate lawyer is correct. If you should die before your husband, your joint tenancy property will go to him as surviving joint tenant. Your will has no effect on joint tenancy property.
In other words, your children from your first marriage will not receive any interest in the joint-tenancy property. However, if your husband dies first, then you wind up owning the properties alone as surviving joint tenant.
If you are not happy with this situation, you and your husband can change the ownership. Perhaps you would like to own the properties as tenants in common.
Then each tenant in common can pass his or her share of the properties at their death by will. However, if your husband dies first and he doesn't leave his half to you by will, you could wind up owning the property with someone you don't like.
If you die first and will your share to your children, your husband would own the property with them. Before you make this change, please consult a real estate attorney to discuss the pros and cons of joint tenancy and tenancy in common or other ownership form.
Patience Pays Off in Buying or Selling
Q: We have been negotiating for over a month with an out-of-town seller of a home my husband and I badly want to buy. The home is everything we want. But the seller is being totally unreasonable. We have made her three different offers, which the realty agent thought would meet her requirements.
However, she keeps saying she wants to think it over. Yet, the house is vacant and we know she is making monthly mortgage payments of almost $1,500. What can we do to get this house?
A: Be patient. That advice recently paid off for me in buying a fix-up house from "difficult sellers." Finally, the realty agent's patience paid off and they agreed to accept an offer just slightly higher than my original offer.
But you may have made a mistake by making three different offers if the seller did not make counteroffers to your offers. I would be very careful about making any new offers, unless you receive a counteroffer from the seller. It looks like the seller knows how to take advantage of you without making any concessions. Patience should pay off if you wait for the realty agent to extract a counteroffer from the seller.
Why Don't All Buyers Get Home Inspection?
Q: I am puzzled as to why home buyers have so many problems with sellers who don't tell buyers about defects with the houses. It seems to me the solution is for home buyers to have the homes professionally inspected. Why doesn't every home buyer get a professional inspection before purchase?
A: I don't know. Many real estate agents encourage their buyers to get professional inspections to protect both the buyer and the realty agent. But I suspect many home buyers don't want to spend the money on a professional inspection.
Realty Investments Can Give Lifetime Income
Q: I own several rental properties in addition to my residence. It occurred to me that I could sell my rental properties and carry back mortgages to provide my wife and me with higher retirement income than we can earn if we took the cash and put it in savings and sell for higher prices than I might get if I insist on cash sales. Do you see any problems with this idea?
A: No. Your plan makes sense. Many people acquire investment real estate while they are young and then sell it when they are older, so they can enjoy the retirement income.
New Property Owner Must Honor Leases
Q: I think I made a bad mistake. Recently I bought a six-unit apartment building at what I considered a bargain price. But I neglected to double-check the rental agreements with the tenants. I knew the rents were low. But it turns out three of the tenants have leases with four years remaining. The seller never told me about the leases. However, I must admit I never asked. Is there any way I can get out of these leases, since keeping the rents low for the next four years will cost me a fortune?
A: A new property owner must honor the leases signed by the previous owner. If the law were otherwise, it would be easy for a property owner to get out of unfavorable leases by selling the property.
But you may have a cause of action against the seller for not telling you about the unfavorable leases. Those leases were material facts that should have been disclosed to you before purchase. Please consult your attorney for details.
Must Condo Seller Disclose Assessment?