Q: I inherited a condominium in Naples, Florida from my parents. The property has a mortgage of $200,000 and is worth about half that much. My parents owned it with my uncle and his wife, who are still alive, so now I now have this property to split expenses including the mortgage with my uncle.
I searched the deed and it came back with a Special Warranty Deed which states it is between my parents and my uncle as joint tenants with full rights of survivorship. Am I now responsible for paying my parents share or does this property now belong solely to my uncle?
A: There are two parts to your question. The first part is who owns the condominium. The second is who is responsible for the mortgage payments.
On the first question, you don’t own the condominium. When people own property as joint tenants with rights of survivorship and one of the owners dies, the remaining owners automatically pick up ownership of the deceased person’s share of the property.
If three people own property jointly with rights of survivorship and one dies, the other two become the sole owners. Of those two owners, when one of them dies, the last one still alive becomes the sole owner of the property.
In that case, you and your father’s estate are not responsible for the condominium, its repairs, its taxes or any other expenses having to do with the condominium, except the mortgage.
Presumably, your parents signed personally for the mortgage on the property. As such, the estate of your parents still has liability for that mortgage. Interestingly, however, since your parents are not making use of the condominium and the condominium is now owned solely by your uncle and he, presumably, is getting the benefit of the condominium, you might be able to claim that your uncle is responsible for the mortgage expenses as well.
That’s not a legal conclusion as you may have other factors that may be involved and you should talk to an attorney on this issue. Your parents may have set up provisions in their will to pay off their debts and the mortgage is certainly one of their debts. Your uncle and your parents may have had an agreement as to how they would share the expenses of the condominium and what would happen in the event of their deaths.
There are also moral issues between family members. When property values were going up and owners held title jointly, there would be squabbling to get some of the money from the sale of the home. As property values have gone down, especially in places like Florida, Las Vegas, and Arizona, heirs are fighting to avoid having anything to do with the home.
If your uncle is planning on selling the condominium, he’d have to work with the lender on a short sale because the property is worth less than the mortgage amount. In a short sale, the bank would accept whatever is obtained from the sale and, presumably in the case of your parents, would waive any claim for the deficiency in the amount owed to the bank.
Depending on state laws and other issues, it might be worthwhile to talk to an estate attorney in Florida to see if probating your parents’ estate could wipe out any debt obligation your parents’ estate might have to the bank given the value of the property.
However, if your parents’ estate had a ton of money, there might be other issues involved relating to probate law and estate law that could benefit your situation.