Understanding responsibilities of a life estate tenant

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Q: I am writing in regards to a question posed to you regarding a grandson buying his grandmother's house while she continues to live there, with direct ownership transferring to him after her death.

I can't begin to tell you what a bad idea this is. My husband entered into a similar relationship with his mother nine years ago. In that period, the economy has tanked, and everyone's financial status is drastically different than when the housing relationship was established.

There was no contingency made for the economy going down. The house is now a financial burden that cannot be shed due to a lifetime lease. It is a deal for his mother, who continues to live in the home with no cost, whereas her son must continue to make payments — mortgage, taxes, repairs — even if he were to find himself without income/unemployed.

In a perfect world, his mother would chip in for expenses, but since the documents state that she live there expense-free, she does not chip in, and instead her grandchildren's college funds go to her upkeep, although she has a generous pension and Social Security.

When offered to sell the home back to her at a much-below market value, and much below what had been paid nine years ago, the offer was declined. Why should she buy it back, after all? Then she would have to curb her lifestyle. As long as her son pays her housing expenses, it's a pretty nice life for her.

Needless to say, a relationship which was entered where everyone would help each other has ended with a son feeling taken advantage of. It is impossible to read what lies in one's financial future. Entering into a financial relationship where the person that makes the payments receives no benefit while the payments are being made and cannot escape from the financial burden if the resources (income/economy) change is just a really bad idea.

I would suggest that you consider what could happen in the years ahead in this less-than-perfect world we live in. If this grandson buys his grandmother's house and suddenly can't make the payments, he will be unable to sell the home.

A: I completely understand your concerns. However, it appears that your husband did not get good advice from whoever prepared the documents that gave his mother the life estate.

Typically, here is a summary of what your mother-in-law should be responsible for: real estate taxes, if the document creating the life estate spells out this requirement; and ordinary repairs, upkeep and maintenance. Unless the life estate document requires the life tenant to pay homeowners insurance, this is the obligation of the remainderman (the person who gets the property at the end of the life estate).

So, while this answer will not assist you or your husband, if a reader is interested in providing a life estate for someone, make sure that the legal document creating that estate spells out what financial obligations the life tenant has.

Furthermore, include language that if the life tenant moves out for any reason, the tenancy ends. This will give the remainderman the opportunity to either rent out the property, move in as a personal residence or sell.

Q: I intend to buy a land lot on eBay. I typed in the parcel number at the county's website, and the seller's name is not listed as any of the three owners recorded. Does this sound like it may be a scam?

A: How can you buy anything, especially land, without actually looking at it, touching the ground and exploring the surroundings? Perhaps I am old-fashioned, but I would never buy land online.

It is possible that the seller is under contract to buy that lot and is flipping it for a profit. That is not uncommon. However, it also could be a scam. Why not ask the eBay seller why his or her name is not listed on the records?

There may be a valid explanation. If not, stay away.

Benny L. Kass is a practicing attorney in Washington and Maryland. No legal relationship is created by this column. Send questions to mailbag@kmklawyers.com.

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