DEAR BOB: About five years ago, I co-signed a home mortgage for my nephew and his wife. They were newlyweds buying their first home. They both had great jobs and great income, but no credit history so I volunteered to help them get a mortgage loan at my bank. Since then, they have done very well. He has been promoted about five times and now earns more than I do. She recently “retired” to have a baby boy, which they named after me. However, when I co-signed their mortgage, the bank insisted I go on the title to their modest house, which I did. They recently refinanced the mortgage to take out some tax-free cash so I am now off the mortgage. But I am still on the title, although there is no reason for that. When I mentioned to my lawyer I plan to sign a quitclaim deed to them, he advised me not to do so because that would create a gift tax situation. As I never paid any cash for the house, have no equity interest in it, and was merely on the title as a convenience, do you think I have any gift tax obligation? –Curt T.

DEAR CURT: No. If you have no equity to convey, you won’t be giving away anything of value. As you state, your name was on the title merely as a co-signing convenience to help the home buyers qualify for a home mortgage.

Purchase Bob Bruss reports online.

However, before you sign and record a quitclaim deed, please check with the local tax assessor to see if that will cause a reassessment of the property and raise the property taxes.

A federal gift tax return is due only when you gift assets exceeding the annual $12,000 exempt amount per donee. In this situation, your signing a quitclaim deed clearly isn’t worth more than $12,000 each to your nephew and his wife. For more details, please consult your tax adviser.

IT’S VIRTUALLY IMPOSSIBLE TO “UNDO” A DEED

DEAR BOB: My sister signed her house over to her daughter and son-in-law because they said they would provide care for her all the days of her life. She is 79. She and her son-in-law don’t get along. The house is worth over $800,000. Have you ever heard of a person reversing a deed? –Sloan J.

DEAR SLOAN: It is virtually impossible to “undo” or reverse a recorded deed unless there is strong evidence of fraud or misrepresentation. Failure of consideration could be another reason but your sister would need strong proof, such as the failure to the daughter and son-in-law to take care of her as agreed.

Just because your sister doesn’t get along with the son-in-law is not a legal reason to rescind the deed. If there is proof of elder abuse or other improper conduct, there might be grounds to take legal action. Your sister should consult a local attorney to discuss the situation.

CAN CONDO ASSOCIATION SET SHORT WORK HOURS?

DEAR BOB: Can a condominium homeowner’s association enact specific times for workers to work on individual units, such as only between 10 a.m. and 4 p.m.? This seems unreasonable. Please help. –Trabiezo O.

DEAR TRABIEZO: Presuming you own a condo that is under the condo homeowner’s association jurisdiction, you have a voice in the management of the association. You should politely notify the association in writing of your disagreement with the short work hours for renovation of individual units and ask to bring the matter up at the next board of directors meeting.

The association, or its management company, can set reasonable work hours to prevent unreasonable disturbance of the condo owners. However, you have the right to politely object and suggest more fair work hours, such as 9 a.m. to 5 p.m. on weekdays, for unit renovation work.

The new Robert Bruss special report, “The 10 Key Questions Smart Home Buyers Ask to Avoid Getting Ripped Off,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010, or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

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