T.L. asks from Wayne, MI on July 22, 2011
Sell This Condo? Do You Think This Is My Only Choice?
I need some viewpoints here. I have a realtor/property manager and I am seeing a lawyer too about this. I want some other opinions because maybe I'm missing something here and you gals are great with things like this. Here's the deal. This condo is my mother's place originally. It is Ladybird deeded (it will become ours (my sister and I) when my mother dies, but it is my mother's as long as she's alive). Neither my sister nor I wants the expense of repairs, taxes, insurance, and dues, nor do we want to put any of our money into this place. To us, it's throwing good money after bad money since it has depreciated so much. My mom bought this condo 7 years ago for $105,000 and now similar condos are selling for $20,000 in her complex, $85,000 loss--can anyone say, "OUCH?" This is just so depressing:( Mom hasn't lived in it for 3 years. I am currently renting it out to supplement her assisted living apartment. The renters are moving out next month, unfortunately, because they found a great deal on a house. I can't blame them either:) The were great, but I did not find them, they lived in the apartment above and their landlord disappeared, so they rented our condo, luckily. It took 7 months to get a renter. My property manager says good renters are hard to find. My mom is going through her cash assets fast and will probably have to apply for Medicaid. I don't want Medicaid to penalize her for this condo. The place needs some fixing up which I don't want to spend any more of my mom's cash toward it because my mom needs the money for her care. I think I'll have to sell it, I don't know. What would you do?
So What Happened?™
Jo W. Thanks for the input. The condo WAS her primary residence, but she cannot claim it on her income taxes anymore because it's considered rental property.
J.W. answers from St. Louis on July 22, 2011
If the condo is her primary residence then it doesn't count in medicaid calculations. If you sell it the cash will become part of the spend down. If you sell it and you and your sister takes the cash they will come after you with a vengence that burns!!!! My dad made the mistake of putting his brother on a small account. None of the money was my uncles but when he went on medicaid they took half, go figure! :(
I hope you are seeing an attorney that specializes in medicaid because the laws are very complex. My brother is an attorney and wouldn't touch it with a ten foot pole. If you lawyer says they can handle but doesn't specialize I would advise running because it is your money and not your best interest they are looking for.
1 mom found this helpful
C.O. answers from Washington DC on July 22, 2011
personally? I would try to contact HGTV and have them help you sell it...you know shows like Sell This House or Designed to Sell....get the stuff needed to fix it up and if they can't sell it - rent it out - newly upgraded...I've seen at least three couples do that on the show - not getting the offers they need so instead of taking the loss, they rent it out.
If you don't have the cash to take care of the short - then don't do it...yes, good renters are hard to find...but they are there...
I can't help with Medicaid questions - sorry..
1 mom found this helpful
C.B. answers from Detroit on July 23, 2011
Get some legal answers. If it's in your mom's name, she may need to be present to agree to give you power of attorney to sell or rent. Ultimately, sell or rent it, but have contracts. By selling it you will not be accountable for its condition. Only spruce it up to make it sellable. As a landlord you'd be liable for repairs etc.
There's the center for elder law that helps legally get things squared away for senior citizens. If no one wants the condo ultimately, I'd put it on the market. There's maybe rent to own possibilities too, but again selling it would get it off your hands.
N.S. answers from Detroit on July 23, 2011
Sounds to me like she's a person that would honestly qualify to forclose on it.
G.B. answers from Oklahoma City on July 22, 2011
Medicaid will take it and sell it and apply the money to her expenses. Get it out of her name now and sell it soon. The sooner the better because if you wait they can claim fraud on you and your sister and you can be in big trouble.
Otherwise offer it "Rent to Own". We did that once and had the deed signed over to us and the owner placed a lien on it. We could not sell it or do anything with it. If it burned down he got the money due him then anything left over would be ours to start from scratch. It was safe for the owner due to it being in our name but him still having his safety guaranteed. We were as responsible for any repairs and care as any person buying a house through a bank.
You would basically be the people's banker that would be buying it. That way it would be in their name, not yours, you sisters, or your moms. She could hold the lien on it and then they would make monthly payments to her. She would be able to do some different things with it on her taxes.
It does not matter if it is rental property or not, it is money in hand according to SS. They will take possession and boot the renters and sell it for her bills.
This was happening to my mom so my brother talked to an attorney. They filed joint residency for my brother and my mom. That way the house was half my brothers and they couldn't touch it. He gave it to his granddaughter and they are doing the rent to own.
L.B. answers from Detroit on July 23, 2011
Get a good estate planning attorney to give you advice. There are very specific rules about what medicaid can and cannot touch. Also there is a 'spend down' period for your mom's assets. Best to seek the best advise money can buy with an estate attorney.