Sent: Saturday, July 09, 2005 7:41 AM
To: taxman at centa.com
Subject: ownership of my hosue
Hello David,
I need urgent advise, in order for you to help me I will let you
know the situation :
I am Canadian resident, British Citizen, in 2003 we decided to
purchase a house in California for my mother to live in. I was
told I have to have 25%of the property value down payment in
order to have the house and the mortgage under my name, at that
time we did not have 25% , we only could manage 20% down payment,
therefore the house and mortgage went under my sister's name.
The loan adviser told me that in 2 years time I can build up my
own credit ( ie, credit card, utility, my own account where the
mortgage and other bills are being paid) then I can request and
the house will go under my name as well as the mortgage.
After 2 years of having excellent record and all payments being
paid in very good order I am being told that I can not have my
house under my name.
Please help me to understand this, I do not want to sell the
house as my mother is living in it and I do not have any
ownership in the house.
Regards
A XXXXX
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david ingram replies:
Your sister should give you a document stating that she is
holding the house in trust for you. Then it does not matter
whose name it is registered in at the moment.
Of course, when it is "your" house, any increase in value will be
subject to California, US Federal and Canadian Income tax on sale
although Canada will give you credit for most if not all of the
taxes paid to the States.
If it was your "mother's" house and she is living in it, the gain
would be tax free.
You and your sister should likely get the house in your mother's
name.
Of course, all this is contingent upon who put the money up and
what the deal is.
If your lawyer or the lawyer or escrow company and mortgage
company knew you were putting the money up an d have made the
house payments, then it is logically yours under what is called a
constructive trust.
A con structive trust arises when a person performs as if a
property is theirs, even though it is registered in some one
else's name. This can be demonstrated by your making the down
payment, your making the mon thly payments, your making the
property tax payment.and your paying for any repairs and
maintenance.
Of course, I am willing to bet that your mother is covering some
of the costs and that your sister has likely put a little in as
well.
You should likely consult a California Attorney to protect your
rights in California. I am not a lawyer.
=============
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