Should A Parent Put Their Child On A Deed To Avoid Probate?

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Should a parent place their child on a deed, in order to avoid probate?

 

I get this question asked me probably once a week, or once every two weeks. And the answer is, I do not recommend that you place a child on your deed. Particularly if it’s the deed to your home, since your home is homestead, and that has particular status. By having the property as your homestead, it’s not considered as an asset, if you need to qualify for Medicaid purposes.

 

You don’t want to have conveyed that, ’cause there could be some issue of whether or not you transferred the property without full and fair consideration, as far as Medicaid’s concerned. Also, if you add a child’s name to your homestead property, they will not get what they call a step up in basis or an increase in the basis, as far as the property, whenever you pass away. And they may have to pay, and they sell the property, well, then, their basis is what you paid for it, particularly if you owned it for some time.

 

Also, if you sell the property during your lifetime, and you’ve added a child’s name to it, you can exempt up to $250,000.00 of gain, if you’ve lived in your home two out of the past five years. Whereas, the child who is on there hasn’t lived there, so they may have to pay taxes. So, that’s another reason not to do it.

 

Also, if it’s your home, and as homestead, if your child would have some kind of credit problems, or domestic problems, they’re half owner of your property. And if Capital One comes and sues them under their credit card, and they get a judgment, it may attach to a half interest in your home. And we wouldn’t want that to be a you be a co-owner with Capital One, as far as your home is concerned. That’s a little bit of a reach, but anyway, they could levy on the child’s one-half interest on the house.

 

What I’ve found very effectively to use, rather than adding a child to the title to your property, is to execute an enhanced life estate deed. And many people have heard of this as a nicknamed a “ladybird deed,” which basically leaves the property and the person’s name, the parent’s name, during their lifetime. So that they can sell the property, do whatever they want to with the property, and the child doesn’t have to have any interest in the property during their lifetime. And if the parent still owns the property at the time of their death, well, then, it’ll automatically pass to their child, and all the child needs to do is file a death certificate.

 

So if you would like to avoid probate, and have your property pass to a child, or your children, give me a call at 727-847-2288. Thank you.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Can A Buyer Sue The Seller For Failing To Disclose A Prior Water Issue?

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Can a buyer sue a seller for a undisclosed roof leak?

 

The answer is: yes, they can. This dates back to a Florida Supreme Court case called Johnson vs. Davis. That decision is probably 20 years old or older wherein they held that any residential transaction that the seller has the duty to disclose to the buyer any matters that are not reasonably observable to the buyer that may have some impact on the value of the property.

 

So, as a result of that, the standard real estate contract that is used by realtors that’s been approved by the Florida Realtors and the Florida Bar Association has a clause in it that says that the seller has disclosed any matters that may material affect the value of the property that are not readily observable.

 

Further, if you use a realtor they have a seller disclosure form wherein they go through a series of about four or five pages asking the seller to initial one way or the other whether there’s been any problems.

 

So, if you didn’t have that in the contract and you simply used a contract that did not have a disclosure or an as is contract, the seller still has the duty to disclose any matters that are not readily observable that may have some impact on the value of the property.

 

If a buyer’s going to sue the seller then they must review the disclosures to see if the seller did in fact disclose the roof leak or any other leak.

 

Secondly, the buyer must prove that the seller knew of the roof leak because you’d have to show that it occurred or was a roof leak prior to the purchase rather than occurring later. There have been some cases whenever people weren’t aware of a particular defect – of course it’s a little harder as far a roof leak’s concerned, but as far as any defect is concerned that they’re aware of it.

 

 

Many times if you buy bank owned property the bank will put on there that they have no responsibility because they’ve never been in possession of the property and therefore are unaware of any defects and so you could not sue a seller that is not aware of these problems.

 

A roof leak usually is manifest by showing something on the interior where the ceiling has been discolored and you can show where the seller has painted over it or has had roofers or somebody else over there trying to fix it and so that you could show that they were aware that the roof was leaking and they failed to disclose it.

 

If they fill out the form that the realtor gives them and says that they haven’t had any prior roof leaks or any other problems with the property, that’s an affirmative fraud and that is another cause of action so that you can sue the seller on two different theories as far as failure to disclose a hidden defect that’s called a latent defect – either sue under the contract if it’s provided for in the standard bar contract or the realtor bar contract or as a in toward or liability.

 

It’s a form of fraud by not disclosing this matter and so the other aspect of this before you get ready to sue the seller, you need to see who the seller is. If you happened to have bought this property from an investor or an LLC, well you may be able to sue them, but you have to show they knew about it, covered it up and didn’t disclose it and also, can you get any money back out of it?

 

So, you have two remedies. One is to ask to rescind the transaction, meaning you give them back the property and you get your money back if you were would not have bought it if you were aware of it. The other one is to sue for damages to determine or you show how much it cost to fix the defect.

 

So, an answer to your question is: yes, you can sue – a buyer can sue a seller for a roof leak if they can show the seller was aware of it and the roof leak occurred prior to them purchasing the property.

 

If you have any questions about this, well give me a call at 727-847-2288.

 

 

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Am I Required To Have An Escrow Account With My Morgage Payment?

 

 

Am I required to have an escrow account for my taxes and insurance with my mortgage payment?

 

That is a decision or a requirement that your lender will make whenever you apply for the loan. The usual case is if you’re getting a conventional loan and the loan – the value – meaning you’re only borrowing 80 percent or less of the value of the appraised value of the property, the lender may agree to let you pay your own taxes and insurance separately.

 

If however you’re getting an FHA loan or a VA loan or a high percentage loan meaning that you’re borrowing more than 80 percent of the appraised value, the lender is going to require you to escrow for taxes and insurance as well as possibly pay mortgage insurance each month, but that is something that you need to discuss with the lender when you make application for a mortgage as to whether or not the lender will allow you to pay your own taxes and insurance.

 

There’s another caveat to that is if you have that agreement with the loan originator, if they sell the loan to another servicer or another bank to accept your payments, the mortgage does provide that the successor lender can require you to pay or escrow for taxes and insurance which certainly wouldn’t make you very happy, but you do need to be aware that it is in the mortgage documents that it’s up to the lender to decide whether or not you have to escrow for taxes and insurance.

 

So, the answer to the question is: it’s up to your lender as whether or not you’ve got to have escrow for taxes and insurance with your mortgage payment.

 

If you have any questions, well give me a call at 727-847-2288.

 

 

 

 

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Is It Legal For A Real Estate Agent To Represent Both Buyer And Seller?

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Is it legal for realtors to represent both the buyer and the seller in a real estate transaction?

 

The answer to that question is: yes, it is. That’s called a transactional broker and whenever you list the property, if you’re the seller, you will sign something where they’ll disclose that they will be acting as a transactional broker rather than a seller’s broker or a buyer’s broker and from my experience that a very, very high percentage – as much as 99 percent of the residential realtors serve as transactional brokers.

 

So, they take the listing and they advertise it and if a buyer happens to call someone else or the listing agent – the same realtor – well, they can then show it to the buyer and enter into a contract. They are really not representing either party.

 

The seller pays the real estate commission and they have a duty to deal in good faith or deal in good faith with both the seller and the buyer and there’s certain things that they should or should not do as far as in that capacity.

 

A transactional broker is different than a buyer’s agent. A buyer’s agent has only loyalty to the buyer and the buyer may be obligated to pay his own agent and the transaction and that should be disclosed as far as whenever the agent goes forward with the transaction.

 

And also you have exclusive seller’s agents from time to time and in commercial transactions it’s not unusual to have a agent who is the buyer’s agent and who’s the seller’s agent, but residential transactions, it’s almost the rule rather than it’s the exception to the rule where you don’t have the real estate broker serving as a transactual broker and dealing with both the buyer and the seller and really representing neither other than dealing in good faith with both.

 

 

If you have any questions about it or need to review your listing agreement, give me a call at 727-847-2288.

 

 

 

 

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What Are The Repercussions Of Breaking A Lease Agreement?

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What are the repercussions for breaching a lease agreement?

 

Well, let’s first start with the tenant. That’s usually the one that is looking to breach or move out of a lease prior to its expiration or not paying the rent.

 

So, the most common breach of a tenant of a lease agreement is where they don’t pay the rent. The landlord then has the right under the Florida Landlord Tenant Act to file a three day notice to the tenant telling them that they got three days in which to pay the rent or move out and the landlord can then sue for possession and to have the tenant removed by the sheriff.

 

That process takes about 30 to 45 days. Also, the landlord can sue the tenant for any damages or any back due rent. Depending upon the lease is how that’s to be calculated and when they calculate it, so those are the usual circumstances whenever a tenant breaches the lease, it’s for non-payment or they may violate some other rule.

 

Again, the landlord must give the tenant a certain notice, giving them, I believe, it’s seven days in order to correct the deficiency such as if they had a pet in the apartment or the house and it was in violation of the terms of the lease, well, they give a seven day notice and tell the tenant they must correct it in seven days or they’ll evict them and if they do it again, well, they will have a right to evict the tenant.

 

On the other hand, we have the landlord – let’s say that they have leased the property to the tenant and the tenant is paying the rent – this sometimes rises in the event that the landlord is sued in foreclosure and the tenant is of course sued and then they have – the question is: well, has the landlord breached the lease and the answer is: no, until the final judgement of foreclosure is entered and the property is sold and the tenants are required to leave.

 

Does the landlord breach the lease? In that event, the tenant does have a cause of action against the landlord. They could sue them for the breach of the lease and their liability for that.

 

Another circumstance where the landlord has leased the property and has decided to sell the property and the tenant is still in possession. The landlord cannot unilaterally terminate a lease. The tenant has a right to remain in possession and really it’s very difficult for the landlord to show the property, but if they do sell the property, whoever purchases it is bound by the provisions of the lease.

 

So, the landlord has a hard time breaching it other than it’s the landlord’s failure to possibly maintain the property. In that event, the tenant gives a notice to the landlord of the failure of the landlord to do the repairs or maintain the property and the tenant’s remedy is to terminate the lease and move out.

 

Again, that requires a seven day notice to the landlord giving them seven days to take care of the problem. If a landlord does not or commence then to fix these problems, well, the tenant can terminate the lease and move out.

 

So, those are some of the most common examples of and the remedies of both the landlord and the tenant as far as a breach of a particular lease. This has to do primarily with residential tenancies rather than commercial tenancies.

 

So, if you have any questions about your tenant or your landlord, give me a call at 727-847-2288.

 

 

 

 

 

 

 

 

 

 

 

 

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