Need help: assisting a frugal widow/my mother with a RE sale/issue

[Finances_With_Purpose]

I've got a weird problem I'm facing, and I could use some mustachian wisdom here.  Paging @waltworks and others with RE knowledge. 

In short, I'm helping my mother, who owns 1/3 of a house (and two small lots).  She and her two brothers de facto inherited it (without a will) 20ish years ago, and it has been an occasional headache since, but now a more recurring headache.  I wasn't able to help her with it (for unrelated reasons) prior to this year, but now I am free to help her dispose of the house somehow. 

Her two brothers each own 1/3, although brother #2 has said that he's going to give brother #1 his 1/3 share. 

This makes no sense, except that he is also a deadbeat and supposedly has IRS debts, which probably exceed the value anyway, although I don't know any details on that or whether he has actual liens - other than that there are no liens on the property currently.  He's also in very poor health (Brother #2). 

The big problem is: it's occupied by her deadbeat brother who doesn't pay his taxes while living rent-free.  (Brother #1)  And, to make it worse, he thinks he owns the place, even though he knows that he's actually only a 1/3 owner.  He simply feels entitled to it after living there rent free for his entire adult life and he has convinced himself that she should just give it to him.  He also has no job and no money, so he'll be a jerk about it. 

My mother owned her own home, but sold it and now rents, which is great for her in her old age - that's not the issue.  So she's good as far as housing goes...though this may impair her ability to buy a house with us later on if she so chooses, or to do other things if this somehow hits her credit.   

This inherited home is 3 hours away, run down, old (circa 1900), and keeps getting her dragged into problems.  She was hauled into a tax foreclosure suit eight or so years ago and then the brother took out a title loan to pay them.  He then paid it back. 

He's now older, has no kids, and is in much poorer health and financial shape.  He has refused to pay taxes for 7-8 years because [insert random tale of woe here], so it's headed back to foreclosure soon.  Brother #2 is similar (except with kids) and in no shape to do anything useful; he doesn't even pay his own income or property taxes. 

A year or two ago, my mother was threatened with a suit by a guy who wanted to buy the two lots.  Brother #1 and #2 had agreed to sell, and signed contracts...but oops, they didn't actually own it.  The title company didn't want to issue title without my mother signing warranty deeds, which she refused.  The guy who was trying to buy it was a distressed property scalper who turned around and threatened that the title company would sue her, and nobody does that to my mother (at Thanksgiving, no less).  So I had that blown up, and it has sat there since. 

I'm now free to help her and the brother who lives there hinted that he wanted a sale of it.  I looked into it, but he actually wants to sell the lots to pay his back taxes, or some sort of bailout...and that isn't happening.  He wants someone to fix his problems for him.  And that's not happening. 

Frankly, he's too dishonest to work with, and doesn't understand that we just want to be honest with him and get it sold so that it doesn't cause more trouble.  (Or he could live there rent-free still if he would just pay the stupid taxes.)  He thinks he can manipulate things, which is really sad because he's actually quite dumb.  He's not mentally handicapped, but also not far above it.  And dishonest. 

The house isn't worth a ton, even with the lots, but it's worth more than zero, and definitely something for my mother, a widow who's living on a fixed income and manages her money relatively well. 

The house is worth maybe $100-$140k (split three ways, less the costs, such as back taxes that are $10k+).  I am trying to have a realtor come assess it to get a little more of an accurate value within the next couple of weeks.

Ideally, the three siblings would all agree to sell it and profit from that, but I am stuck dealing with two deadbeats who I know are lying any time that they are talking, especially Brother #1.  The man lies every time his mouth opens. 

So, we would only think about doing that after a contract that forces Brother #2 to pay his own tax debts/liens first, and Brother #1 to pay the taxes (in lieu of anyone asking him for rent/back rent from his prior tenants), and then both of them to pay whatever other liens/issues they have put on the property, if any, including anything resulting from the flubbed sale of the lots.  Even then, I wouldn't want to enter into any complex agreement with these clowns, as one or both might back out and then get everyone sued, because you can do crazy things when you don't care that you're a scumbag and face no financial consequences in general. 

Instead, I'm now thinking that the easiest route here is to just sell the 1/3 interest to someone.  Let that guy force them out.  Brother #1 is poor and pretty dumb, so he will probably sign whatever deal he gets rammed into once he realizes that someone is there who means business and won't let him stay. 

I can have the realtor pitch it to investors, as well as tell some who I know down there, and there's already one who wanted the lots, because this old rundown house is surrounded now by new modern brick homes, and they're building more around it all the time.  The street behind it is completely full of new homes. 

I don't know what that'll net, if much at all, but I also don't know of a better option.  I just do not want to waste either time or money on this thing that can only net so much anyway, but could cause a lot of stress or ancillary problems if not disposed of easily. 

My mother doesn't want to evict her own brother directly (even though she could buy the whole thing outright at FMV with cash), and he would make doing so a terrible cost, down to quite possibly destroying the house just to be a jerk.  It's a lose-lose situation. 

She could make him an offer for it, I suppose, but that risks: (1) keeping whatever IRS problems exist without satisfying that debt (because both brothers are completely fine with trying to commit fraud and would do so gladly), and (2) putting her in the position of evicting him if he screws her over, which he might try to do (on the assumption that she would let it ride, as she has let this ride for so long).  It doesn't look like a worthwhile option - though maybe we could try it and see if he moves out, and then, if that fails, sell it off anyway.  I just don't see a deal happening there, especially because nobody will (legitimately) offer him enough for him to go elsewhere and get anything of decent value. 

Unfortunately, my mother cannot stay in the current situation, because he has her being hounded for his bad debts and they're headed back towards another tax foreclosure soon. 

My current tentative solution: I'm inclined to have her just sell her 1/3 to someone else, and let them deal with it.  Problem solved.  She'll net something more than $0, and it won't be her name on it anymore.  (Hell, I'd sell it to one of you if you wanted to deal with this...and I'd help you deal with it.) 

She may just hand it to me and let me be bad cop rather than her, which I don't mind.  (Though we'll figure out what the most tax-effective move is first, rather than doing two transfers one after another.)   

I've tossed this whole situation around, but I'm not a RE pro.  I'm knowledgeable enough to know that most of the legal solutions are likely to be expensive, and quite possibly more than her share of the upside here is worth anyway. 

Any ideas?  Thoughts?  Suggestions?  Your input is welcome!  It's a morass, all I want is an efficient and affordable solution with minimal drama. 

(Paging @waltworks and @RetireOrDieTrying for suggestions, since I know both of you have valuable RE experience.  And @Laura33  @Metalcat  @Sibley and @Dicey  for any general or RE wisdom.) 

[Metalcat]

None of this sounds worth dealing with to me, personally.

I would pay that amount to get the fuck away from a situation like this.

Oh wait...I did. I lost about that much disentangling myself from trying to help a family member with a stupid house selling situation.

[waltworks]

Ain't gonna work. Legal bills, back taxes, and hassle are going to leave everyone with basically zero.

Just deed the house to the dude who is living in it and walk away.

-W

[Metalcat]

Ain't gonna work. Legal bills, back taxes, and hassle are going to leave everyone with basically zero.

Just deed the house to the dude who is living in it and walk away.

-W

Yeah even if the share was >100K/sibling, I would still be nervous about not coming out ahead in this mess.

I'm sure it's jurisdiction-dependent, but I would expect solid 5 figures in legal bills and a very loooong process to evict a third owner from their own property.

I can't even figure out what legal mechanism would exist to do that. He's not a renter and there are no agreements in place as to who is responsible for the taxes. I can't even figure out how one sells a third share of a property without agreement of the other partners.

I would say the first step is to talk to a lawyer to just get an idea of how expensive and drawn out a process this could be.

[LaineyAZ]

Sounds like the brothers are old and in poor physical condition?  This may resolve itself if they pass away first.

I might be inclined to pay the back taxes to avoid foreclosure provided both brothers sign a will which will give the house back to your mother upon their death. 
An escrow agent should be able to handle that so that taxes are paid after the will is done.

Otherwise I'm agreeing that it all sounds like too much hassle for not much net proceeds.

[Villanelle]

No one is going to buy 1/3 share in a house that has a non-paying tenant, back taxes due, is in questionable condition, and is the source of tension between the other 2 owners.  1/3 of that is worth pretty much nothing.   So I don't think your tentative plan is going to work because this is a headache and a bad deal and who is going to pay $xx,000 to buy something like that?   

I'd likely hire a lawyer to ask about what you need to do a quit claim.  Get your mother off the deed, give her share to the 2 brothers, and make sure she's off the hook for the back taxes and anything else relating to the property.  Hopefully the brothers would agree to that.  She can attempt to ask the brothers, in some combination, to pay her a small amount for her share, but that sounds unlikely. 

[sonofsven]

Can you try to work a deal with the brother to exchange her 1/3 of thd house for his 1/3 of the lots?
Then sell the lots and split it 50% with non deadbeat.
It's like divorce: it's expensive because it's worth it.

[Finances_With_Purpose]

Thank you all so far!  I REALLY appreciate the feedback. 

I'm noticing a trend.  And yes, @Metalcat , you've hit the nail on the head.  I'm only doing this at all because it's a good time to disentangle my mother from this ongoing shitshow.  And also, in the event there's any upside for her.  (It's about her.)  Also, my mother will eventually pass, and, since it's just me, as she constantly reminds me, I'm going to inherit this mess anyway - so it's not like I can get out of it either way.

FWIW, she tried to get her mom to fix all of this with an actual will for years before she died, but no.

One big downside to just walking away: that rewards the ugliness, and, frankly, the brother will probably just immediately sell it then, since he can, and pocket the proceeds (probably approx. $100-$120k), which is annoying.  He has no problem cheating the IRS and walking away. 

Then again, we don't want to pay a dime to make these guys be more honest.  I truly appreciate the value of walking away. 

I should have noted two things which may well matter (you tell me, @waltworks and @Villanelle - whose posts seem most pertinent to it), especially the first one:
1.  The two lots are separated out, and have separate taxes.  They're behind about $3,500.  They're probably 1/2 or more of the value - $50k+.  I am trying to confirm that.  A developer/shady dealer wanted to buy just those (at a bottom-dollar price) last year, but the two brothers couldn't sell on their own.  (They're building and selling houses on lots like those for anywhere from $400-$700k right behind this old house.) 
2.  Brother #2 has a kid who wants this place and has tried to finagle his way into ownership but has been turned down.  He's aggressive, a bit of a sociopath, an alcoholic, and a general asshole.  By way of example, when grandma died (his and my grandma), he wasn't at the funeral because he was breaking into this house, her house, and stealing unknown bonds/valuables from her closet.  He is yet another reason why I would love to be rid of this disaster sooner rather than later, before someone has to deal with him. 
3.  Brother #1 (the resident deadbeat) doesn't have kids, but Brother #2 does.  Brother #2 has one awful asshole of a kid (see 2. above), and two who are more reasonable.  Asshole may or may not even be a legitimate child of his, but that's a story for another day.  Brother #2 was married 7-8 times, though, and will likely die without a will, as will brother #1, so I assume the only cost-effective way to do anything is to do it right now, while all three kids are alive and agree upon how the ownership is split right now. 

To a few of the other suggestions:

@sonofsven : I had the exact same thought myself last week.  Two issues, though: the "non-deadbeat" is a tax cheat who probably owes the IRS his share.  Second, I don't think the brother will do it anyway.  I can ask, but he won't see what's in it for him, since he won't net anything out of that deal.  He'll own the house outright, but he doesn't care since he's getting to live there for free anyway.  It's not logical to you or me, but it's how he lives/thinks as someone who takes advantage wherever he can.  The other problem there is that we would then own a lot that they had already promised to sell, and I suspect that a developer might block it from being sold or force it to have to go through a legal proceeding to formally knock out that attempted sale before it can be sold.  I'm less sure on that front. 

@Villanelle : Yes, that's the problem.  However, I had a thought that, since the lots are separated, that questionable developer guy probably would.  He wouldn't mind taking advantage, and he could develop/use the lots immediately, without further process, once he owns 1/3.  The other 2/3 are already committed to him.  So I don't know what he would give, but he would probably give something just for the ownership of those lots.  He could then leverage it to get the whole house, I suspect.  But yes, my buyer pool would be mostly shady guys.

The brothers have $0 and are in debt up to their eyeballs, so they won't pay a dime.  They're deadbeats, both of them.  (These are two very able-bodied men who've chosen to cheat, not work, etc., for decades.) 

@LaineyAZ : Yes.  One is on oxygen and barely mobile.  But he's been down a few years.  The other has increasing health problems.  It's honestly hard to know how much is real versus tales of woe with Brother #1, who resides there, because he is dishonest and our info is mainly from calls, although we do think he's in poorer health due to some injuries last year (from doing dumb things). 

That's a clever idea. 

I don't know if they would both go for it, but it solves Brother #1's problems - he wants to live somewhere for free.  It's a bit tricky as we would want Brother #2's will to be irrevocable on that point, and I don't know if you can do that, because otherwise he may well change it up to give it to his son who wants it.  Someone else could also move in at any time, including now, and then have to be evicted eventually.  I would put that possibility north of 50%: some poor relative/friend will try to freeload once Brother #1 is near death. 

I also know my mother would absolutely hate the idea of paying taxes for her deadbeat brother to live there. 

The taxes on it are like $2k/year or less, so that would mean spending $2k/year until they both die, but that seems to be a short-ish period of time for one of them, and probably not too far down the line for #1 either.  I just worry that something might happen, like it burns down, which then makes it a net loss.  I suppose it's a question of risks and rewards.  But it also ties my mother to this ongoing morass, which is also awful.  So as I type this out, I think I'm talking myself out of attempting that route, even though I like it - it's a clever idea and would work well if we weren't dealing with cheats and deadbeats here. 

--

This is all very helpful.  You're confirming my initial instincts here, which are to find a way out that's more or less walking away from it.  My mother won't love it, since she'll view it as her brothers basically stealing from her...but that's more or less what happened. 

Right now, I am thinking of just reaching out to the guy who tried to buy it to see if he'll just buy her share and take it.  If he does, he can then force a sale through on the other two, and since it's just lots, that's easy enough.  Then we can deed over or do whatever with the house - maybe sell it to him too.  If he doesn't want it, then maybe we just sign it over to Brother #1 and that's the end of it.   I suspect she'll get a few thousand for selling it that way, and that guy has no problem whatsoever being bad cop to the remaining owners.  I assume he'll eventually force them out in some sort of bad deal, but we'll at least be free of it. 

--

Thank you all again for the wonderful feedback!  I'm taking it to heart, and leaning more than ever towards just walking away from this mess. 

[Villanelle]

In that case, I might tell developer you want to pocket $10k (give or take; some number that is meaningfully less than the FMV--if you can even determine that, given the mess--of 1/3, but enough that makes you feel like you won something, since that seems important to you) *after* he has a lawyer do all the paperwork necessary.  (I'd still pay the modest legal fees to have my own lawyer review everything before signing.) 

But 1/3 of $50k, if I'm understanding correctly, minus taxes owed and transactions costs, isn't very much.  My $10k number might actually be too high to make it worth his while. 

I'd caution you against making decisions just because you don't want to reward bad behavior.  In the end, that means you are still letting an asshole determine your actions.  Do what is right and best for your mom and you and try to make that completely agnostic when it comes to Bad Brother.  If what is best for you means bad brother gets eleventy million dollars, so be it.  It's still what's best for you.  if walking away and handing over 1/3 of a mess is what's best for you, do it.  What happens to and for other people you don't like or care about, and who created the mess, shouldn't matter. 

[former player]

A court ordered sale of all of the properties would resolve the issues, and it's not uncommon to have such things in the case of jointly owned property where the joint owners have a falling out or can't agree on a sale.  An application to a local civil court would have to be made on your mother's behalf, which means finding a lawyer.  A court order would mean that neither brother had a veto over the sale any more.  Their shares of the proceeds could be ordered to be used to help pay the back taxes.   A court order might also require Brother 1 to vacate and leave the house in its current order: failure to comply would be a contempt of court which can be expensive or lead to imprisonment.

It's possible the shady developer with the contract from the two brothers would intervene in the court proceedings, I suppose, which could make them more convoluted and expensive, that depends on exactly what contract was signed.  I don't think the court would require your mother to sell her share to the shady developer on the terms agreed by the brothers but the shady developer might be able to get a share of the brother's proceeds to cover his "losses", maybe?

You are going to need a lawyer in any case, whether to go to court and get a court ordered sale or to draft and finalise a quit claim.

Good luck.

[FINate]

I'd caution you against making decisions just because you don't want to reward bad behavior.  In the end, that means you are still letting an asshole determine your actions.  Do what is right and best for your mom and you and try to make that completely agnostic when it comes to Bad Brother.  If what is best for you means bad brother gets eleventy million dollars, so be it.  It's still what's best for you.  if walking away and handing over 1/3 of a mess is what's best for you, do it.  What happens to and for other people you don't like or care about, and who created the mess, shouldn't matter.

^^^So much this. I once ate around $20k to disentangle finances from a greedy relative. They didn't deserve it and to me it felt like losing at the time, but it was worth every penny. Do what's right for your mom and don't waste a bunch of time and money on a pyrrhic victory.

[Dicey]

I agree that the true prize is to extricate your Mom from this mess.

Assuming the properties are contiguous, they are probably worth more as a block, because more new houses can be shoehorned onto them.

That developer is going to hang on for dear life, whether he has a legitimate claim or not. If he can buy the first two lots, he may figure he can get the last piece for a song.

It's also worth mulling over if your mother is likely to outlast her brothers, but even if that's likely, it may not be worth the stress.

Good luck with this mess.

[Metalcat]

It is not your job to worry about what behaviour gets "rewarded" and what doesn't.

This is an adult who is near death, he's not going to learn fuck-all from anything you or your mother do. Don't worry about his moral lessons from this, they're irrelevant.

There's either enough value in getting you and your mother's hands dirty in what could be a very long, very complex, very ugly, very EXPENSIVE legal battle, or there isn't.

There's no way I can conceptualize this playing out that you even come away with even remotely decent compensation for your time and stress. I had a legal fight for a year with an insurance company for a substantial settlement, and even then, by the end of it, it barely felt worth the battle, and there were no psycho family involved, which makes it much, much worse. I was just dealing with an ultra rational but evil insurance company.

Me and my lawyer knew exactly where their pain points were and where they were likely to fold because this was just math for them. When dealing with an irrational, entitled family member???? You have no idea what shit they'll pull just to make you more uncomfortable.

I would never, ever enter into litigation with irrational, entitled family members for less than a quarter million, and even then, I would think long and hard about it.

So what the asshole brother gets some capital? So what??? Also, if he gets substantial capital from the arrangement, then great! He's less likely to run out of money before he dies and starts coming around being a fucking asshole trying to get more from your mom.

DH and I call this "bitch go away money."

It sounds like you and your mom would be giving up a very small, perhaps $0 amount in order to facilitate the brother getting some solid "bitch go away money."

Don't even think about the money he might get from this, it's not relevant. The only relevant factor is the money *your mom* might get from this fight, and honestly, I think selling a kidney might be easier, less painful, and more profitable.

I don't care if the brother gets $1 or $10M from this. If fighting him isn't likely to net *your mom* much or any money in the end after the ugliness is over, then bro could get a private island and a mega yacht out of the deal and it wouldn't change what your mom should do.

Talk to a lawyer and see if there's a simple way to just gift the whole clusterfuck back to the assholes and be done with it.

Seriously, litigation is hell. I'm not kidding when I say I would spend 5 figure sums to avoid it. That's not an exaggeration, I *have* spent mid 5 figure sums to avoid litigation with crazy people, it's really that bad. DON'T DO IT.

[Finances_With_Purpose]

I agree that the true prize is to extricate your Mom from this mess.

Assuming the properties are contiguous, they are probably worth more as a block, because more new houses can be shoehorned onto them.

That developer is going to hang on for dear life, whether he has a legitimate claim or not. If he can buy the first two lots, he may figure he can get the last piece for a song.

It's also worth mulling over if your mother is likely to outlast her brothers, but even if that's likely, it may not be worth the stress.

Good luck with this mess.

You're spot on as to all counts.  Except that the lots are pre-divided per city specs, and they're already set up properly for two lots with two houses, which is max per local codes, etc.  (All the houses/lots around are like these two).  The old house sits on a third lot on another street, behind the two empty ones.  They're all contiguous: two lots sit directly behind the old original lot. 

As for the bigger issue: yes, my mother is likely to outlast both of them.  In fact, Brother #2 isn't likely to be around that much longer, which is another reason why I'd like to get this done with sooner rather than later, before it becomes another mess or a bigger mess. 

You've nailed the one other thorn I neglected to mention, but is sort of implied here: Brother #1 is going to die and my mother would end up with half of it anyway, most likely, although who knows....he'll die in debts and nobody will probate his estate, so maybe it just dies at that point/becomes unclear. 

That's another reason why I would love to extricate her fully by selling it all so that nobody ever tries to drag her back into this disaster unwillingly, but one can only control so much. 

You've also nailed my concern about the developer, which is the #1 problem making this all a mess...and the hardest one to fix.  That's why I think considering a sale to him makes the most sense.  He'll then twist arms or do whatever to get it all for a song, but we'll be free of it. 

[Finances_With_Purpose]

It is not your job to worry about what behaviour gets "rewarded" and what doesn't.

This is an adult who is near death, he's not going to learn fuck-all from anything you or your mother do. Don't worry about his moral lessons from this, they're irrelevant.

There's either enough value in getting you and your mother's hands dirty in what could be a very long, very complex, very ugly, very EXPENSIVE legal battle, or there isn't.

There's no way I can conceptualize this playing out that you even come away with even remotely decent compensation for your time and stress. I had a legal fight for a year with an insurance company for a substantial settlement, and even then, by the end of it, it barely felt worth the battle, and there were no psycho family involved, which makes it much, much worse. I was just dealing with an ultra rational but evil insurance company.

Me and my lawyer knew exactly where their pain points were and where they were likely to fold because this was just math for them. When dealing with an irrational, entitled family member???? You have no idea what shit they'll pull just to make you more uncomfortable.

I would never, ever enter into litigation with irrational, entitled family members for less than a quarter million, and even then, I would think long and hard about it.

So what the asshole brother gets some capital? So what??? Also, if he gets substantial capital from the arrangement, then great! He's less likely to run out of money before he dies and starts coming around being a fucking asshole trying to get more from your mom.

DH and I call this "bitch go away money."

It sounds like you and your mom would be giving up a very small, perhaps $0 amount in order to facilitate the brother getting some solid "bitch go away money."

Don't even think about the money he might get from this, it's not relevant. The only relevant factor is the money *your mom* might get from this fight, and honestly, I think selling a kidney might be easier, less painful, and more profitable.

I don't care if the brother gets $1 or $10M from this. If fighting him isn't likely to net *your mom* much or any money in the end after the ugliness is over, then bro could get a private island and a mega yacht out of the deal and it wouldn't change what your mom should do.

Talk to a lawyer and see if there's a simple way to just gift the whole clusterfuck back to the assholes and be done with it.

Seriously, litigation is hell. I'm not kidding when I say I would spend 5 figure sums to avoid it. That's not an exaggeration, I *have* spent mid 5 figure sums to avoid litigation with crazy people, it's really that bad. DON'T DO IT.

Yeah, I should have been clearer about what I said: my mother will be upset.  I won't.  I'm coming from exactly the perspective you describe, and just want to get out of this.  I pointed out that she'll have a hard time with it because, in turn, that'll make it harder/more time-consuming to do because she has to do the paperwork, but it won't affect the net outcome as far as I'm concerned.  I'd just really love this problem to go away and be done with. 

And yes, I appreciate you pointing out the pitfalls of litigation, and I wholeheartedly agree and tell others the same.  (Here, the brothers would just default because they have no funds for an attorney and this isn't worth enough to make it worthwhile for one to show up.  That's also basically what they did in the tax foreclosure.  But it's still a pain, more so because the developer might be a pain on purpose.  My only plans would be ones that can resolve this without litigation.) 

I'm leaning hard towards simple/easy transfers: either selling it or just giving it to the brothers. 

[Finances_With_Purpose]

I suppose the other question that arises here is: what tax issues will this create if she just transfers it?  I've been leery of a simple transfer for tax reasons as much as anything else: it could stick her with a capital gains tax bill. 

I assume that the IRS is probably not going to be as willing to say: oh, that house and two lots there are worth $0 to you, so no capital gains for you.  (Ditto the local CPA.) 

I'll definitely call her CPA before we do that, to avoid that problem (there's no going back once you transfer it), but I'm wondering if that won't make for more tax problems than just selling it at a real price, albeit a very cheap one (e.g. $3k-$10k or whatever it's negotiated to with some third party).  That was another upside of trying to sell to a third party: a clear price. 

Maybe @Michael in ABQ or one of our other pros knows offhand how this would likely shake out.   

[Sibley]

You say you want this handled before either brother dies because that's a different mess. But it might be an easier mess. I got lost with who has the asshole kid, but in your place, I'd really look at who would inherit from either brother. And then think through how things might go if you were trying to sell the house with that party in the mix.

[neophyte]

You may want to check the title and see if the house would be inherited as part of either brother's estate or if ownership would fall to the remaining owners.

The other option I can think of is if they could all agree to split up the lots with your mother and brother 2 each taking one of the vacant lots and brother 1 taking the one with the house. Then she could at least sell her lot. Unless you ran into problems with the developer there.

Personally, just signing it over seems worth it from the not having to deal with it perspective.

[Finances_With_Purpose]

More good points, all.

@Sibley : It's Brother #2, but it would then be mom + Brother 1 (deadbeat living there) + 3 kids, one of whom is terrible.  Brother #2 is also in massive debts, so they wouldn't really inherit anything: it would all have to be probated and go away that way.  Which makes it more of a mess regardless of who technically inherits, because it then requires one or more court proceedings.  That would definitely be a "walk away" situation. 

If brother #1 dies first, then it's easier: mom and brother #2 would sell it and split it 50/50. 

Thank you @neophyte .  The title is all messed up: it's still in the name of the dead guy who owned it 100 years ago and sold it originally (circa the 1920s).  None of the three are on the title, even though all three agree on the chain of ownership. 

[Omy]

Talk mom into walking away. Between back taxes, closing costs, and legal fees, it's more likely to cost her money than it will net her anything worthwhile. Stress and conflict will take more of a toll on her than she could possibly net. There's too much risk to her health and finances to fight an unwinnable fight.

[Finances_With_Purpose]

Talk mom into walking away. Between back taxes, closing costs, and legal fees, it's more likely to cost her money than it will net her anything worthwhile. Stress and conflict will take more of a toll on her than she could possibly net. There's too much risk to her health and finances to fight an unwinnable fight.

Thank you, and yes, that's my lean.  In fact, I just told her so. 

She'll be stressed doing it, but she'll be worse if this mess keeps sucking her back in, so it's best that she cut ties now, before she gets sued again or dragged into some new mess. 

It's clear there's a consensus that this is a giant waste of time, financially speaking, so we're most likely getting her out as quickly as we can. 

[Dicey]

Wow, that was a lot of ground covered in 24 hours and ten minutes.

Good luck as you move forward.

[Sibley]

Wow, that was a lot of ground covered in 24 hours and ten minutes.

Good luck as you move forward.

This forum moves fast.

[former player]

If your mother just wants out, what happens if she does nothing and the house goes into foreclosure for the unpaid taxes?  If that means that the local authority deals with the business of selling it and anything left over gets split between the 3 current owners then that might be her best way forward.  Foreclosure would presumably cut out the dodgy developer because his contracts with the two brothers are overtaken by the foreclosure title.  It also deals with the eviction issue.  Perhaps have a word with whichever authority is owed the taxes and suggest the house is a good candidate for foreclosure and sale?

Allowing the house to go into foreclosure still leaves the two plots.  Perhaps the brothers might be more reasonable about agreeing to sell those if the house is already gone.

[Finances_With_Purpose]

If your mother just wants out, what happens if she does nothing and the house goes into foreclosure for the unpaid taxes?  If that means that the local authority deals with the business of selling it and anything left over gets split between the 3 current owners then that might be her best way forward.  Foreclosure would presumably cut out the dodgy developer because his contracts with the two brothers are overtaken by the foreclosure title.  It also deals with the eviction issue.  Perhaps have a word with whichever authority is owed the taxes and suggest the house is a good candidate for foreclosure and sale?

Allowing the house to go into foreclosure still leaves the two plots.  Perhaps the brothers might be more reasonable about agreeing to sell those if the house is already gone.

We have considered that.  In fact, this happened about 7-8 years ago. 

She will get sued and have a foreclosure on her record is what would happen.  Best case is she'll need to spend thousands of dollars on a lawyer for that process.  Worst case is that she does and it still doesn't get sold. 

Last time, Brother #1 waited until that point and took out a title loan from one of those payday lender places.  He has already said that he's going to do that again.  He paid the last one back, eventually, but never paid taxes again.  This time, it's unclear how he will be able to pay it back even if someone gave him the money, so I assume that'll just mean another foreclosure by the title company eventually. 

All of those routes involve court proceedings and guaranteed cost, which is why I was hoping to avoid any of those routes. 

[Finances_With_Purpose]

Yes, that was fast - thank you everyone!  I'll hopefully update if there's any forward progress. 

[Villanelle]

If mom struggles with the "rewarding bad behavior" concept, point out to her that it is entirely possible that with back taxes, legal fees,  closing costs, and everything else involved, it is entirely possible that what she is giving him is actually a larger share of debt.  In the end, his "reward" way actually have negative value, and that's before any stress and headaches are added into the equation.  That might make it easier for her to walk away. 

I'm also curious how Bro 1 got a title loan if you say he's not even on the title! Seems like the company didn't do their research very well. 

[Finances_With_Purpose]

If mom struggles with the "rewarding bad behavior" concept, point out to her that it is entirely possible that with back taxes, legal fees,  closing costs, and everything else involved, it is entirely possible that what she is giving him is actually a larger share of debt.  In the end, his "reward" way actually have negative value, and that's before any stress and headaches are added into the equation.  That might make it easier for her to walk away. 

I'm also curious how Bro 1 got a title loan if you say he's not even on the title! Seems like the company didn't do their research very well.

I did.  By way of update, she asked a couple of people who know her and the brothers what they think, and they all agreed with me (and with you all) that she just needs to get out of it somehow, and should sell it or give it. 

I'm curious too.  Apparently the title loan company said that it only took two signatures, whatever that means.  I suspect that they got it because they are listed on the taxes because, at one point, they filled out an affidavit or something saying that they are the heirs, or they at least identified who the heirs are (such that all three got sued last time in the tax foreclosure).  I'm assuming he knows about this from the last time he went through it, and, who knows, maybe they're more cagey about it this time. 

I was more surprised that, after a few years or so from the original title loan: (1) Brother #1 paid the loan back, and (2) they actually recorded that on the title chain so that it's clear. 

[RetireOrDieTrying]

Man, I'm going to add to the choir, 'cause I have been in nearly this exact situation with a former spouse's... uh, former spouse. It tastes like bile to take a kick in the sack financially for someone contemptible, but if you take the "EFF that dickhead" emotion out of the equation - this isn't about getting ahead for your mama - it's about preventing her from being drug further under. Make no mistake - she IS getting drug under currently. The only three paths I see:

1) Keep on truckin' as-is. Taxes and liens will continue, and the property will be lost. PLUS, your mama will be equally on the hook for unrecovered liens and costs.
2) Hire a lawyer and spend more than the value of the property trying to out-fox 2/3 of the current ownership.
3) Swallow your (and her) distaste for this seeming karma failure, and count it a win to be extricated before her limited income is further impacted by the decisions of the other two. File a quit-claim deed pronto. This will get her out of the path of liens, taxes, and foreclosure costs.

I don't know the family dynamic, having only seen it through your lens, but I'd take this opportunity to make that 1/3 a parting gift, making clear that all contact/communication is done for good. There is a price on that familial relationship, and he already defined that price. Pay it and count it as a bargain.

Trust me - 1/3 of a rat's nest is not going to feel better than the realization that you and she are DONE with the whole mess forever. Done is good. Done cannot be overrated.