My husband and I renovated a home owned by my mother under the condition that she would sign the house over to both of us. We have completed the work. She does not want to sign the home over to my husband and me. She only wants it in my name and hers. My husband contributed the labor and half the funds for the renovation. What legal options do we have?
There is much background in this situation leading up to this point. It is inefficient to speculate how the three of you got here. Rather than address your conundrum directly, allow me to suggest how others may prevent it from happening in their families. Then I can direct some suggestions to anyone who finds themselves in similar situations.
Put it in writing
In my experience, the situation you describe is quite common. The common denominator is the family. For a variety of reasons, unique to each family, either people don't think a contract is necessary with "family," or they feel as though a contract may offend a family member. Those feelings are valid because some family members would be hurt, or also think a contract is unnecessary. While there are many instances that no contract works fine, there are many times when no written agreement is a disaster. It is not easy to predict which families will experience significant issues. Better to offend someone temporarily than permanently damage a relationship. It is not difficult to explain why a contract is the best option.
Some potential solutions
Talk through the situation together. This approach should be pre-planned. Who should be, or not be, in the meeting? Where should the meeting take place? Should there be a mediator? If so, is there a family member qualified and willing to take that role, or should it be a professional mediator? Seek to understand, then be understood. Here is more information about mediation.
Ask mom to sign a note for her share of the labor and material cost. Her share because the daughter benefits from the remodel in ownership. Her husband may also benefit if the property is in a marital property state. Seek legal and tax counsel as the law varies from state-to-state.
Would you agree to your mother's terms if she would agree to sign her interest over to your husband at some agreed-upon future date?
Consider asking her to pay you and nix the ownership deal. If that is not feasible, agree on repayment of the remodel costs if she were to sell the house secured by an interest-bearing note.
A construction lien may be a possibility, again, depending on the state law. This lien may be the "nuclear" option, so think of it as a last resort to protect your interests.
These are the kinds of issues that must be sorted out by a mediation panel or an attorney if the three of you cannot reach an agreement on your own.
Richard Montgomery is the author of “House Money - An Insider’s Secrets to Saving Thousands When You Buy or Sell a Home.” He is a real estate industry veteran who advocates industry reform and offers readers unbiased real estate advice. Find him at DearMonty.com.