Sister, brother clash over late parents' home

Co-owning a house can lead to big problems, especially when one owner wants to sell and the other wants to keep it.

Q. My brother and I inherited our parents' home when they passed away several years ago, and we have been renting it to tenants ever since. Now I want to sell the home and use my half of the profits to invest in something else, but my brother wants to keep it, and says he will never agree to sell. We hold title to the property as joint tenants, so I cannot simply sell my interest to someone else. What can I do?

A. I get this type of question often, typically from someone who either jointly inherited a property with another relative or else purchased it with an unrelated co-investor.

You have the same options with your brother that you would if you owned the property with any other person. If he's adamant about keeping the home, he probably can refinance it in his name only and take out enough extra cash to purchase your half-interest. This would allow him to keep the home for as long as he wants, provided that he continues to make the mortgage payments, and also would let him keep 100 percent of the future appreciation. You, meantime, would not only get to “cash out” of the property but would be free of any future mortgage liability and wouldn't have to mess with its tenants anymore.

If your brother won't go along with this simple plan, you probably will need to contact a local real estate attorney for help. The lawyer likely would file a “partition lawsuit” on your behalf, which essentially would ask a judge to order that the property be sold and the profits divided evenly. Your brother might then become more willing to purchase your half-interest if he's truly interested in keeping it. Otherwise, the home will be sold to someone else, and the net profits will be split.

It would be best for both of you to work out an amicable solution without having to get lawyers and a judge involved.

If the matter must go to court, your brother might well be forced to sell to a total stranger, and both of you will wind up with a lot less money after all the legal fees are paid. That's probably not what your parents hoped for when they left the house to the two of you.

Q. I am a divorced mom who lives with my 6-year-old in a small rental house. When I recently called the landlord to ask him to fix our broken toilet, he made a few comments about my “great figure” and some other things that made me feel uncomfortable. He also promised he wouldn't charge me for the repairs if I agreed to go out to dinner with him. He fixed the toilet for free even though I rejected his dinner offer, but I still feel uneasy (partly because my current lease required that I provide him with a key to my home). What can I do now? Do sexual-harassment laws protect people in their own homes, or do they only cover problems in the workplace?

A. Federal and state anti-harassment and fair-housing laws alike protect you 24 hours a day, whether you're at home, at work or visiting a park or other public place.

The landlord's suggestive comments certainly were out of line. So was his proposition to fix your toilet for free if you agreed to a dinner date: Federal law requires all landlords and property managers to make such repairs for free, unless the tenant's own negligence caused the problem.

Let's hope your firm rejection of the landlord's comments puts a stop to his bad behavior. If not, contact your local fair-housing agency to file a written complaint, or call a private attorney to discuss other options.

Q. You recently answered some questions about living trusts, and my wife and I are thinking of creating one so our home can pass quickly to our grown children instead of having to go through lengthy probate proceedings. But if we put our property into a trust and then sell the home before we die, would we lose the right to keep up to $500,000 of our resale profit tax-free?

A. No; creating a living trust and then putting your home's title into the trust will have little or no impact on your personal tax situation.

Rules published by the Internal Revenue Service allow married spouses to place a personal residence into a living trust and still have the right to keep up to $500,000 of their eventual resale profit tax-free. Single tax filers can keep up to $250,000. In the meantime, you also would be able to continue taking annual deductions for mortgage-interest payments, property taxes and the like.

Our booklet, “Straight Talk About Living Trusts,” explains how even low- and middle-income homeowners can now reap the same benefits that creating an inexpensive trust once provided only to the wealthiest families.

Ÿ For the booklet “Straight Talk About Living Trusts,” send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960.

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