My retired, intellectual, in-good-health father lives alone in Florida. His home is in a nice neighborhood. From the outside everything looks fine, but my father owes more on his home than it’s worth.
What would be the consequences to me if something happens to my dad? It would take a big crew and money to clean and prepare the home for sale, and it is unlikely he will leave any money for the task. Could the city where he lives force me to pay real estate taxes on the home and prepare it for sale? Should the home be sold at auction?
You say your father is in good health and otherwise seems fine, but his behavior seems unusual, even for those who are aging and living alone.
It seems that there is more going on with your dad than what you’ve written. And we suggest you look into it because while your question (which we’ll answer in a moment) has to do with what happens after your dad passes away, what’s going on isn’t healthy. If the house is no longer clean and sanitary, it could be a sign of mental illness or other problems.
We’d like you to sit down with your father and discuss his situation. If his mind is in good shape, try to find out what’s going on in his life. If he’s fine but going through a tough period emotionally or suffers from depression, you might want to hire someone to help him on a part-time basis. Even a house-cleaning service could help to keep the house clean. And you and your siblings could spend a weekend throwing stuff out or giving stuff away.
What you describe could be a recipe for disaster and could be detrimental to his health. From our viewpoint, we would prefer to see you and your family be proactive to help your father’s living situation than wait until he dies to take care of the real estate issue. The more important issue is his health and having a clean, safe place to call home.
Now let’s move on to your question. While you say that your dad owes more on the home than the home is worth, we’d like to have you do a bit more research to make sure that’s still the case.
In some places, real estate values have stayed flat (at a lower level) after the Great Recession and have not recovered. This is true for neighborhoods around Las Vegas and pockets of areas in parts of California, Arizona, Michigan, Florida and other cities or states. But in many parts of the country, home prices have risen tremendously and we’re in a strong sellers’ market in low to moderate price ranges in most metro areas.
If you decide to do nothing, after your dad dies, title to his home will pass on to his kids or heirs according to his will or according to the laws of Florida. But the heirs can elect not to accept to inherit the home.
Your father’s estate, however, would still be liable for expenses and the payment of the existing mortgage on the home. At that point, if the mortgage payments don’t get made to the lender, the lender would have the right to foreclose on the home and sell it to satisfy all or a portion of the debt still owed on the home. There could also be issues if he doesn’t pay his property taxes. The home could be sold for the back taxes, although this is less likely if there is no equity in the property.
Likewise, the municipality has an action for code violations against the owner of the home, and if you don’t inherit the home, you would not become liable for citations against it.
In any of these cases, we would prefer to see both you and the family help your dad out and improve his living conditions. He still needs a place to live, and if he can handle living alone and is happy living alone, you should do what you can to help him out now. If you can help out, some of the other issues surrounding the condition of the property may improve over time as you and other relatives work to fix the issues in the interior of the home.
Ilyce Glink is the creator of an 18-part webinar + ebook series called “The Intentional Investor: How to Be Wildly Successful in Real Estate” as well as the author of many books on real estate. She also hosts the “Real Estate Minute” on her YouTube channel. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them at ThinkGlink.com.