Legal Question in Real Estate Law in New York
share of property
my mother s thinking of selling the home she rents out to my sister and brother for aprox a third of its value. The mother-daughter home is worth aprox 525000- she is selling it to them for 200000. The reason: she needs the money and does not want them sattled with a heavy mtg payment. They do not pay her now enough to run the house now and I do not believe my brother and sister responsible enough to carry a mtg. In doing this, my mother is turning the home in which I grew up in and probably the only source of inheritence I would rec'd to my siblings. What recourse do either my mother or myself have?
2 Answers from Attorneys
Re: share of property
By selling a 525k house to them for 200k, she is "giving" them 160K each in equity (their inheritance?)and you nothing.
If she decides to do this, as long as she is not under their undue influence or mental incompetence, you have no recourse.
Has she considered a reverse mortgage?
She may qualify to receive the $200K and keep house in her name. Then when she passes, it would need to be paid back (house sold) and what's left goes to her estate (you/siblings?)?
Aprox $100k each.
Lot of info on web re: reverse mortgages.
Re: share of property
Unless your mother is being unlawfully influenced by your brother and sister or unless your mother is not mentally capable of making decisions concerning her affairs, there is not much you can do. While you may express your thoughts to your mother, legally there is nothing that you can do.
In selling the property for less than its fair market value, your mother may incur gift taxes on the amount of the gift. The difference between the fair market value and the purchase price will be considered a gift. A gift tax return will be required to be filed and gift taxes may have to be paid. This depends on the amount of gifts previously given by your mother.
If your mother needs money now, she can refinance the property and take out the money she needs. In doing so, with proper planning, her mortgage payment can equal the amount she is collecting in rent from your siblings.
If she needs the money to live on, she can take out a reverse mortgage. A reverse mortgage provides a sum of money each month from a lender. This money then gets repaid upon the sale of the property.
Your mother should discuss this matter with an attorney to determine which plan of action works best for her situation. I would be happy to be of assistance.
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