The father’s lien turns meager rent into a family impasse.
Tiffany told “The Ramsey Show” on the phone from Tucson, Arizona, that a home she and her husband purchased with their parents in 2014 was now embroiled in a dispute.
The property was remodeled in 2015, with Tiffany and her husband shouldering all renovation costs while her father handled the labor. The next year, after her parents divorced, he demanded $5,000 in cash to abandon the arrangement. Tiffany refused. He then filed a $20,000 lien on the property.
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The home is worth approximately $63,000 and the mortgage balance is approximately $17,000. Tiffany said they tried to pay him three times, $5,000 and $10,000, but he refused because he had to share the money with her mother. The lien prevents them from selling the home.
“Confessions of a Man Who Should Never Buy Real Estate in a Partnership,” Host Dave Ramsey explain.
Tiffany said her family income is about $150,000 and her net worth is about $500,000. Ramsey outlined two possible paths.
First, she could hire an attorney and sue to dissolve the partnership. A judge can order the property to be sold and the $20,000 lien to be settled. He said taking the legal route could cost $10,000 to $15,000 and would likely end her relationship with her father.
“This is justice,” Ramsey said.
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At the same time, co-host Christina Ellis Asked: “How is the house now? Do you rent it? Is it empty?”
Tiffany said the home is rented and brings in about $1,000 a month. Ramsey said she will likely net about $10,000 to $20,000 after paying legal fees and forcing the sale.
Until it’s known who owns the property, Ramsey offered another option.
“Go away. Just throw the keys over your shoulder,” he said.
Ramsay said that given her income and net worth, he would pay off the remaining mortgage, sign a quitclaim deed to her parents and let them resolve the issue.
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However, Tiffany clarified that the deed and mortgage only listed her and her husband because her parents were in Chapter 13 bankruptcy at the time of the purchase. She added that an Illinois law that takes effect in 2023 allows for the cancellation of certain expired liens, including those that expired in 2018, without involving the person who filed the lien.
