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Ask lawyer to help with property line issue before sale
By Edith Lank | Columnist
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Published: 8/29/2010 12:04 AM

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Q. What happens when you go to sell your house and find out your neighbor's fence is on your property? I've known for some time, but I have let it go to keep the peace. But now I'm looking to sell.

A. A lot depends, in part, on how far that fence encroaches on your land and how long it has been there. There are ways to safeguard your ownership without making trouble with your neighbor. Ask a lawyer whether a license would fit the situation, or what other steps - if any - you should take at this time.

What are your thoughts on keeping or selling a house that belongs to my husband's sister? She is living with her caregiver and is totally dependent on her. The house has been vacant for about two years now and we have tax bills, heat, etc. My husband has power of attorney, but he is hesitant to do anything. The location of the house is good, but it is in need of some restoring, paint, etc.

A. I suspect this is more of a personal and emotional decision than a financial one. Sorry, but it sounds as if I'd better not mix in.

My mother, who recently died, lived in another state. My sister has been living in my mother's house for six years, since my mother went into a nursing home as a Medicaid recipient. The house has fallen into disrepair.

My mother's will calls for the house to be sold and the proceeds split between my sister and me. Neither one of us has the interest or money to make the necessary repairs.

What's the best way to go about selling? Should we go through a Realtor or a private real estate investor that might buy it for cash? Or should we get a reverse mortgage (my sister wants to continue living there)? I'm the executor of the will and I need advice.

A. As executor, you should get your information from a lawyer down there. Because your mother was on Medicaid, first of all, find out if there are liens - financial claims - against the house to pay for some of her care.

Then find out how much the place might be worth, whether it would bring enough to pay off any liens, and whether it can be sold on the open market as it stands. You can receive this information for free with no obligation. Your sister should call several local real estate brokers and ask them to look at the place. Then contact them yourself to discuss their advice.

For a reverse mortgage: Your sister would have to be 62 or older, and I suspect she'd have to be the sole owner, with you signing over your share. If she's still fairly young and the house isn't worth much, she probably couldn't get too much cash on a reverse mortgage. If she did get the loan, she'd build up a gradual debt against the property, which would be repaid when she died or moved out. You might never see any money from it, so that would have to be OK with you.

We are interested in purchasing a two-family home. We will not reside there, but our son will occupy one unit and we hope to find a tenant for the other unit.

We do have 25 percent for a down payment. For the remainder, we assume we could secure a fixed-rate, 15- or 30-year mortgage like the one we have for our residence now. Someone mentioned that we will need to get a commercial loan. Is that true? Another thought is homeowners insurance. What type do you suggest for this situation?

A. If you're going to be real estate investors, it's time to start studying property management. Yes, you'll need a different type of loan. Yes, you'll need landlord insurance. And you must learn about federal and state fair housing laws.

You should have your own CPA to explain income tax, set up your bookkeeping and tell you what records to maintain. A lawyer can help in drawing up a lease document that meets your particular needs and state requirements.

When you become landlords, you're embarking on a new career - it's not an offhand matter. Expect to spend some time learning the ropes. I don't know where you're located, but some locations have a nonprofit housing organization that can help you get started properly.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

2010, Creators Syndicate Inc.