Don't Get Duped by Hidden Mortgage Fees

DEAR BOB: I gave my tenant notice to move, confirmed with a receipt of notice. She agreed to move out, but the unit is now locked and no one is there, though her car is parked in the driveway. I phoned several times, but no reply. What options do I have? I have already hired a contractor to update the unit, based on the tenant's promise to move out on schedule. -- Paras R.

DEAR PARAS: Consult a lawyer whose specialty is evictions. I'm sure you have thought of the possibilities: The tenant moved out but left the car, abandoned the apartment and the car, died either in the apartment or elsewhere, is in a hospital, is in jail, is avoiding you because she refuses to move out, or wants to drag out the eviction procedure to obtain as much free rent from you as possible.

All these situations have happened to me with my rentals. Ask the neighbors if they have seen your tenant or any activity at the rental. Then contact the local police to learn if they have any record of activity at the property or if they can trace your missing tenant. After that, follow your attorney's advice to regain possession of your rental unit.

DEAR BOB: Several years ago, my mother gifted her house to me because she was moving into her new husband's home in Florida. Now I want to sell that house, but my tax adviser says I am stuck with my mother's cost basis of only $23,000, while the house is worth about $375,000 today. At the time of the gift, the house was worth about $225,000. Will I have to pay tax on all that capital gain? -- Alan P.

DEAR ALAN: Your tax adviser is correct. The general rule for gifts is that the donee takes over the donor's basis for a property.

Unless the property is your principal residence and you have owned and occupied it at least 24 of the 60 months before its sale so that you can qualify for the $250,000 tax exemption of Internal Revenue Code 121 (up to $500,000 for a qualified married couple filing jointly), your capital gain will be taxable. The good news is the federal capital gain tax rate is only 15 percent.

DEAR BOB: Last year, my husband bought a house with his name on the title and mortgage. I help him pay the mortgage and property taxes. What is the best way for him to transfer 5 percent of the property to my name? How much will it cost? -- Patricia S.

DEAR PATRICIA: If you will be receiving only a 5 percent interest in the property, that means you probably want to hold title as a tenant in common with your husband, who will retain a 95 percent interest. Each of you needs valid written wills to pass your interests upon the death of either of you to whomever you each designate.

Your husband can convey a 5 percent interest in the house to you by a recorded quitclaim deed. The deed should include a legal description of the property, the percent interest transferred to you, the official parcel number, the method of holding title and his notarized signature so the deed can be recorded.

DEAR BOB: My parents divorced in 1995. The judge gave the house to my mom, but she had to either sell it or refinance the mortgage. She wanted to keep the house, but she couldn't refinance because her debt-to-income ratio was too high. My mother gave me a quitclaim deed, signing the house over to me, and I helped her refinance with a new mortgage. Now I want to get my name off the title and put my mother back as sole owner, as she desires. If I do that and my mother dies, am I responsible for the mortgage payments even though I don't hold title? What do I need to do to quitclaim the house title back to my mom? Do I need to go through a title company? -- David P.

DEAR DAVID: If you are now on the title alone, you can sign a quitclaim deed to your mother. However, you will still remain liable to make sure the mortgage payments are made even when you don't hold title to the property.

After your mother dies, the title to the house goes to whomever she names in her will or revocable living trust.