Homebuying Basics: Refinancing Your Mortgage

DEAR LISA: If the owner agrees to add you to the title so you can obtain financing for renovations, you need to consult a real estate lawyer to prepare a joint venture or a partnership agreement.

Few owners would be willing to do that, as the legal complications could be endless, especially if you try to establish a low $100,000 basis. You would probably be better off acquiring the title and then obtaining an improvement loan to pay for the rehabilitation.

DEAR BOB: I would like to put my name on the title of the home I share with my mother. We are about to sell it and I want to know what I need to do to make that happen. I share in the upkeep and the payments. I was told having my name on the title is the best way to assure funds when the sale is completed. Is this true? -- Alicia H.

DEAR ALICIA: If your name was not on the title when you paid the mortgage interest and property tax payments, you are not entitled to claim any itemized tax deductions for those expenses. If your mother gives you a partial interest in her house, perhaps 50 percent, that makes you obligated for 50 percent of the capital gains tax. When you receive a property gift, you take over the donor's adjusted cost basis for that gift.

Even if the house has been your principal residence at least 24 of the last 60 months before its sale, you can't yet qualify for the $250,000 principal residence tax exemption of Internal Revenue Code 121. The reason is your name was not on the title at least 24 months before the home sale.

Your mother's gift to you of part of the house could be a major mistake for both of you. Before she gives you a quitclaim deed for any interest in her house, you should both consult your tax adviser to discuss all the details, especially the disadvantages.

DEAR BOB: A tree that belongs to my neighbor is next to our common wall, which is breaking up from the roots. The tree owner refuses to take any action. What can I do?

-- Steve W.

DEAR STEVE: By "common wall" I presume you mean a concrete wall, not just a wood fence. Legally, you can cut the tree roots back to the property line. However, be careful not to kill the neighbor's tree. If you do so, you can be held liable to the neighbor for the market value of the tree you killed.

Another approach would be to sue your neighbor for a private nuisance abatement. You could ask the local court for an order to force the neighbor to cut the tree roots back to the property boundary.

DEAR BOB: I own a property on which the maintenance is paid from escrow by my bank. They charged some type of "assessment" of an additional fee in September 2005. Neither my bank nor I was notified of the $190 original fee. Now they have imposed late charges and I received notice from a lawyer saying I must pay more than $1,600. They put a lien on my property title. Is it legal to notify me more than a year later?

-- Lourdes B.