Touchy situation with in-laws

[lilylover]

I haven't been an active member of these boards lately, but I need some un-biased advice and couldn't think of a better place to ask for it.

My FIL and MIL gave DH and I 2 plots of land as wedding presents back in June. The land is located way out in the country (about an hour away from town) and the in-laws know that realistically we will never build a house out there. They said that they hope that someday we can sell the land and use the money somehow. Thing is, they had been trying to sell the land themselves through a realtor for a couple of years with no luck. So, they took it off the market, gave the land to us and now we are having to pay hefty property taxes and HOA fees. When we found out in June that they were transferring ownership over to us, we inquired about the property taxes and HOA fees and his dad just kept on saying, "Don't worry about it, it isn't much". We got the bill a month ago for the property taxes and it is 900 dollars. We got the bill for the HOA fee today and it is 660 dollars.

We were planning on going on a belated honeymoon (we couldn't afford one back in June and have been saving since then to be able to go) but now that we have to pay 1,500 dollars for the land fees that are due in 3 weeks I don't think we can afford to go. This absolutely crushes me.

I understand that they were trying to give us something that would help us in the future, but right now it isn't helping at all and is in fact doing the opposite. We are 23 and 24 years old, we are just getting on our feet financially and I don't want this financial burden. It'll realistically be several years before that area is developed enough for us to sell the land. I don't see it helping us any time soon.

What would you guys do?? His parents would be offended if we told them we didn't want the land. It is a very frustrating situation!

 

[Steel]

If you ask some folks around here, there is no such thing as an unbiased opinion .

So here is my skewed view.

You're IT. Like in the tag game.

They couldn't sell it, figured it was no loss to them to give the sites to you guys. Perhaps they didn't even consider the taxes and associated charges that you are now liable for.

Has the land been registered/transferred to you legally? If so you are up the proverbial creek and you should just sell the land asap. Try to get outline planning if you can but either way send it to an auction if you have to.

If there is no legal transfer and MIL/FIL have just sent the 'bills' your way then you need to have a chat with them, because they obviously know that you guys are now liable for extra debts. It has to be strap on the big girl pants to have a thanks but no thanks conversation. I would say, thanks so much but as you know we can't or don't want to build there and as we are just starting out we are struggling with the extra debts we didn't plan for. How about you keep the lands in your name and if you sell it in the meantime you keep the cash! Byyyyyyeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee (as you run out the door)

 

[meresal]

Yikes, that is not cool. I wonder why FIL was so secretive about the actual costs?

I would have DH talk to his parents. Definitely play up the Honeymoon thing...

 

[Tuckins1]

Hmmmm... Interesting situation. I'm with Steal. If the property it already in your name- sorry. If not, I would try to politely decline! Sorry this happened to you. Is renting it out or selling it on land contract an option?

 

[cara]

If you already own the land then make the best decision for your future and do with it what you want - sell it or keep it (and pay the associated taxes and fees) and reap future rewards. Though if they have already legally transferred title and the land is difficult to sell then you may be stuck. In that case maybe you can in some way petition to lower your current $ burden. Maybe the land is overvalued and thus overtaxed. What on earth is the HOA doing with your money if you have no house on your land, etc.

If you do not officially own the land then certainly you should bring up that you don't want those responsibilities yet!! Who cares if they are crushed, this is your life and their "gift" comes with responsibilities.

But really I am thinking what a "gift" your in-laws gave you! I guess without knowing the exact details it is hard to see if they were really giving you something they see as valuable for your future but they misestimated the burden the taxes and HOA fees would be for your current budget, or if they were just trying to dispose of something that was a burden to them!

 

[swingirl]

I don't think it was a gift at all. It was a way for them to relieve themselves of their bad investment. You should not have accepted it in June knowing the property taxes and HOA fees were going to be an annual expense. If it is in your name you are stuck for now but "gift" it back to them. The only reason they would be crushed is because now they'll have to pay the taxes. It was their original investment, not yours. It's not like it's a family estate. It's a piece of land that no one wants because it's in a useless location.

I do wonder how anyone can charge for HOA fees when there is no home. That sounds like it was a super bad investment which is why no one wants to buy it. It sounds like a development that never made good on their plan because not enough plots were sold and the developer is still collecting the HOA fees — because he can.

 

[Porridge]

Wow. The gift that keeps on...taking! Without knowing your IL's it's hard to know what their intentions were in giving you this land. At least here, land is a very valuable thing in the mentality of the older generations at least, so I would hope their intentions were noble. Cara's suggestion is a good one, can you lower the costs?

I have to say, I think I would run the risk of offending and say thanks but no thanks. Is that a reasonable thing to do, financially? I can't see how it will benefit you significantly if it can't even be sold! How certain are these developments that will supposedly increase the value and saleability of the land?

 

[Dreamer_D]

WAIT...

surely if you ask the right amount for the land you can sell it? Maybe you can get $20k for it? Is it really unsellable, or only unsellable for the amount that the in laws paid?

Because if you can sell it for *anything* now, even a loss on what they paid, then you have come out ahead. So before you throw the baby out with the bathwater, I would look into whether it is really worthless, or whether it is just worth less than they wanted to sell for If you can get something for it at all, then sell it and use the money for something you want. The in laws may squack, but tough cookies.

 

[Miss Sparkly]

We had something similar happen. The inlaws bought DH a Jeep as a "graduation gift". Then a year later came to us and said that it was time for us to take over the payments. DH was 24, I was 20, and he was the only one working while I finished school. There was NO WAY that we could afford $450 a month for a car (our rent was only $500 then). So, we gave it back. Sometimes I just feel like people don't totally think thru their actions. If you don't own the land, I wouldn't pay it. If you do own the land you could sell it for cheap just to get it off your hands. It does seem like they helped themselves more than they helped you though.

 

[MichelleCarmen]

Did you actually sign anything?

Is the property developed (water/electricity)? There must be some reason they gave you the property rather than sold it for a lower price, like possibly the lots don't perk (aka needing a septic but the land cannot support that) and are pretty much useless? Something?

Stick it on the market and make it appealing to a low-baller and get rid of it, then use the $ for your honeymoon and a bit of savings.

 

[lilylover]

Thanks for all the replies.

We legally own the land now. We never actually signed anything since they were "gifted" but the papers for the lots are in our name and all the bills regarding it come to our house, etc. The land is in a nice area, it's just far away from the city and there are 60+ properties currently for sale in the same subdivision with many of them with really low asking prices since they are in foreclosure. There's electricity on the property, but that's about it. Someone would have to come in and do everything else. One of the lots is valued at 30k and the other is valued at 20k. Not sure what FIL and MIL were asking when they were trying to sell it, but it was up for sale for a couple of years with an experienced agent in the area with no offers.

DH says he will talk to his parents within the week and explain where we stand. Not sure what will come out of it, though. I think that they were partially trying to do something nice, and partially didn't know what else to do with it so they figured they would rather give it to family than sell it for much less than it was worth.

I will keep everyone posted.

 

[somethingshiny]

Here's my thoughts.
You are struggling financially and cannot keep up with these fees
This WILL cause discourse in your IL relationships.
You have nothing invested in the property yet.

Sell the property to anyone willing to pay anything. If you're really unable to handle the fees, you'll be relieved to have it off your plate and a nice lump of change in your bank account. Do NOT under any circumstances divulge what you sold the land for to your ILs especially because you can probably guarantee that it won't be "enough" in their eyes since it was on the market for so long.

This is a hard way to start out in a marriage, I hope you're able to find a happy solution.

If you actually CAN afford the property, but don't WANT to have it, I'd still sell it. Life is short. Do something you want with the money you get from it.

 

[soocool]

I would consult a real estate attorney or an accountant. Gifting land is a form of estate planning. By giving you the land now instead of transferring the title after their death their hopes were to do you a favor.Gifts reduce the size of their estate thereby cutting probate costs and possibly federal estate taxes. Gifts can also create income tax savings. Through gifts of income-producing property, income can be shifted from one family member to another who is in a lower tax bracket.

When they transferred title of the property to you did they do it through an attorney? If so you would have known about the Federal Tax Gift Law - read this article so you get a better understanding about "Gifting"

http://msuextension.org/publications/FamilyFinancialManagement/MT199105HR.pdf

There are many communties/developments that I know about where I live in PA which enticed many people to buy small plots of land with the possible intention of building a permanent residence or a vacation home. Some of these are also gated communities and one of my neighbor's bought a house that had been on the market for over 10 years. They have owned it for almost 10 years and only travel up there once or twice a month (they do not rent it out) and sorry to say they will never be able to get rid of it. It is not in a readily accessible area, and pay HOA and other community/club fees. There are reality companies surrounding these developments that are only in the business of reselling these properties. I liken it to "time sharing" which my neighbors also have and cannot get out of.

 

[Octavia]

I'm not sure where you live, but I find it very odd that you weren't required to sign the deed transfer to take possession of the property. Usually a transfer has to be recorded by the registrar for the town or county (depending on the setup in yor state) and I'm surprised they would do that without a signature from the transferee. You might want to double-check on this -- it should be public record and someone at the registrar's office can probably tell you how to search. You could also hire someone to do it. If there's any problem with the title, you want to know sooner rather than later. Also, another thing to think about is the capital gains tax -- in general, the way it works is that you and your husband will have to pay taxes on the difference between the value of the property when you received it and the value when you sell it. That may affect whether you decide to sell it (assuming title is, in fact, clear) or hang onto it for the long-term. If you have an accountant, definitely ask about this, and if you don't, you might want to get advice from one before going forward.

I'm sorry this "gift" is causing you such a headache...sometime people really don't think about he consequences of their actions

ETA: cross-posted with soocool!

 

[soocool]

I'm not sure where you live, but I find it very odd that you weren't required to sign the deed transfer to take possession of the property. Usually a transfer has to be recorded by the registrar for the town or county (depending on the setup in yor state) and I'm surprised they would do that without a signature from the transferee. You might want to double-check on this -- it should be public record and someone at the registrar's office can probably tell you how to search. You could also hire someone to do it. If there's any problem with the title, you want to know sooner rather than later. Also, another thing to think about is the capital gains tax -- in general, the way it works is that you and your husband will have to pay taxes on the difference between the value of the property when you received it and the value when you sell it. That may affect whether you decide to sell it (assuming title is, in fact, clear) or hang onto it for the long-term. If you have an accountant, definitely ask about this, and if you don't, you might want to get advice from one before going forward.

I'm sorry this "gift" is causing you such a headache...sometime people really don't think about he consequences of their actions

ETA: cross-posted with soocool!

The IL's would have had to sign a quitclaim transferring the title over to the children. It may depend on the state where the property is? regarding who signs the quitclaim - always the grantor (the person gifting the land) and sometimes the grantee (the person receiving the gift). The only way to give it back is the quitclaim it back to the IL's.

That is why it is important to consult a lawyer. Land transfer etc is so complicated. (another fee you don't need)

 

[Octavia]

I'm not sure where you live, but I find it very odd that you weren't required to sign the deed transfer to take possession of the property. Usually a transfer has to be recorded by the registrar for the town or county (depending on the setup in yor state) and I'm surprised they would do that without a signature from the transferee. You might want to double-check on this -- it should be public record and someone at the registrar's office can probably tell you how to search. You could also hire someone to do it. If there's any problem with the title, you want to know sooner rather than later. Also, another thing to think about is the capital gains tax -- in general, the way it works is that you and your husband will have to pay taxes on the difference between the value of the property when you received it and the value when you sell it. That may affect whether you decide to sell it (assuming title is, in fact, clear) or hang onto it for the long-term. If you have an accountant, definitely ask about this, and if you don't, you might want to get advice from one before going forward.

I'm sorry this "gift" is causing you such a headache...sometime people really don't think about he consequences of their actions

ETA: cross-posted with soocool!

The IL's would have had to sign a quitclaim transferring the title over to the children. It may depend on the state where the property is? regarding who signs the quitclaim - always the grantor (the person gifting the land) and sometimes the grantee (the person receiving the gift). The only way to give it back is the quitclaim it back to the IL's.

That is why it is important to consult a lawyer. Land transfer etc is so complicated. (another fee you don't need)

Ah, didn't even think of a quitclaim deed, I was just thinking about the possibility of title issues stemming from unrecorded deeds (argh). But that, IMO, is kind of sneaky and I absolutely agree that lilylover and her DH should sit down with an experienced real estate attorney ASAP...I'd be very uncomfortable in a situation like that.

 

[lizzyann]

I'm with Dreamer - SELL IT!!! Take what little you can get and run!

If you don't want to do that, I think your DH needs to talk to your in-laws, be honest about the situation, thank them, but ask for them to take the property back. This way they can keep it on the market at a higher cost for a little longer and maybe make more on it. If they do sell and want to gift you some CASH from the proceeds to use down the road for a down payment on a house or something, then fine by you!!!!

 

[Italiahaircolor]

Is the land in a "cookie cutter development" or is it a custom build area?

If it's custom build neighborhood, an idea is to reach out to the builders in that area and let them know you have the land. Builders love to have model homes to show off. Even if you fire sold the land for 10k per lot or less you'd be free of obligation.

Otherwise, I'd have a serious heart to heart with the IL's. $1,500 isn't chump change and especially not when you're just starting out.

 

[Prana]

How is it that you now 'own' this land without having to sign anything? I would think that in most states, there would have to be some sort of deed or contract signed in the presence of a lawyer to transfer land like this.

I'm sorry you're in this situation. They basically used you guys to dump off their burden. I would be really angry if someone did this to me, especially parents because they are supposed to have their children's best interests at heart.

I would say that you definitely need to speak with them, maybe even tell them that they need to take care of the fees and taxes for this year because you don't have to money to do so yourselves, and were unaware of how much they would be.

I'm still baffled as to how you could own this without having signed something though....

 

[lilylover]

Here is an update for everyone...

Well, apparently DH did sign something, I just wasn't initally aware. The land is definitely legally his. He also talked to his dad today. His dad basically said too bad so sad. Not in those exact words of course, (he is a bit nicer than that) but pretty close. He doesn't want the land back and didn't offer to help us pay for any of the costs for this year.

We are going to explore a couple options (auctions, etc) to sell the land. The land is vauled at 50k total, but we are going to sell it for whatever semi-reasonable amount we can. Hopefully someone will buy it if the price is low enough.

I am pretty angry about this "gift". His dad isn't a very considerate person, and when DH told him that the expenses were too much for us at this point in our lives, he didn't get any sympathy but rather a lecture on finding a higher paying job.

 

[hawaiianorangetree]

Here is an update for everyone...

Well, apparently DH did sign something, I just wasn't initally aware. The land is definitely legally his. He also talked to his dad today. His dad basically said too bad so sad. Not in those exact words of course, (he is a bit nicer than that) but pretty close. He doesn't want the land back and didn't offer to help us pay for any of the costs for this year.

We are going to explore a couple options (auctions, etc) to sell the land. The land is vauled at 50k total, but we are going to sell it for whatever semi-reasonable amount we can. Hopefully someone will buy it if the price is low enough.

I am pretty angry about this "gift". His dad isn't a very considerate person, and when DH told him that the expenses were too much for us at this point in our lives, he didn't get any sympathy but rather a lecture on finding a higher paying job.

wow! well if it were my land i would be selling it for half of what its worth just to get rid of it quickly. Pocket the money and then when the IL's complain about it you can tell them too bad so sad! (nicely of course)

 

[MichelleCarmen]

Here is an update for everyone...

Well, apparently DH did sign something, I just wasn't initally aware. The land is definitely legally his. He also talked to his dad today. His dad basically said too bad so sad. Not in those exact words of course, (he is a bit nicer than that) but pretty close. He doesn't want the land back and didn't offer to help us pay for any of the costs for this year.

We are going to explore a couple options (auctions, etc) to sell the land. The land is vauled at 50k total, but we are going to sell it for whatever semi-reasonable amount we can. Hopefully someone will buy it if the price is low enough.

I am pretty angry about this "gift". His dad isn't a very considerate person, and when DH told him that the expenses were too much for us at this point in our lives, he didn't get any sympathy but rather a lecture on finding a higher paying job.

wow! well if it were my land i would be selling it for half of what its worth just to get rid of it quickly. Pocket the money and then when the IL's complain about it you can tell them too bad so sad! (nicely of course)

Yep, take a couple photos and put an ad up on CL!

 

[JonyLeaber]

If you ask some folks around here, there is no such thing as an unbiased opinion .

So here is my skewed view.

You're IT. Like in the tag game.

They couldn't sell it, figured it was no loss to them to give the sites to you guys. Perhaps they didn't even consider the taxes and associated charges that you are now liable for.

Has the land been registered/transferred to you legally? If so you are up the proverbial creek and you should just sell the land asap. Try to get outline planning if you can but either way send it to an auction if you have to.

If there is no legal transfer and MIL/FIL have just sent the 'bills' your way then you need to have a chat with them, because they obviously know that you guys are now liable for extra debts. It has to be strap on the big girl pants to have a thanks but no thanks conversation. I would say, thanks so much but as you know we can't or don't want to build there and as we are just starting out we are struggling with the extra debts we didn't plan for. How about you keep the lands in your name and if you sell it in the meantime you keep the cash! Byyyyyyeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee (as you run out the door)

thanks share your informative information.

 

[soocool]

Well, if you do not pay the taxes or HOA fees on the property there will be a lien filed against the property (usually after 2 years of nonpayment) and the land would be put up for sale by the county. Better for you to file abandonment to the county or state or better yet donate (quitclaim) it to some charitable organization or land trust, etc so you can reap some taxable benefits. If you cannot sell quickly or afford to pay taxes and fees this would be the way to go. Do some research on land trusts/donations in your area and consult a tax accountant or real estate attorney about doing this. If you are unable to sell at least you will get money back in taxes and don't have to deal with the headaches of ownership.

 

[swimmer]

Wow, a lecture on getting a better job? You guys could give him a lecture on not getting suckered into real estate traps...well, he sorta suckered your DH into this thing though.

Yes, see if you can make a charitable donation, or see how cheaply you can list it? yeah, that might be craigslist...

 

[enbcfsobe]

Ditto the advice above about either a fire sale or donation. What a crappy way for ILs to pass off their mistake on you and DH. Sounds like maybe a discussion with DH about discussing financial decisions before signing papers may also be in order. Is it too passive-aggressive to tell ILs next holiday or birthday that you'd love to give them a gift but spent all your $$ dealing with their "gift" to you? Or just tell them straight out that you never ever want to exchange "gifts" with them? Or you could buy them something for their property -- something ugly and hard to remove like a large tacky statue? Or you could give them the gift of an arborist who comes and cuts down all their trees while they are away... Sorry, I've gone off on the revenge track. I'm really so sorry they've misused you like this and hope you are able to unload this burden ASAP with minimal damage done to your finances. Obviously the relationship with the ILs is another story altogether.

 

[charbie]

Ditto the advice above about either a fire sale or donation. What a crappy way for ILs to pass off their mistake on you and DH. Sounds like maybe a discussion with DH about discussing financial decisions before signing papers may also be in order. Is it too passive-aggressive to tell ILs next holiday or birthday that you'd love to give them a gift but spent all your $$ dealing with their "gift" to you? Or just tell them straight out that you never ever want to exchange "gifts" with them? Or you could buy them something for their property -- something ugly and hard to remove like a large tacky statue? Or you could give them the gift of an arborist who comes and cuts down all their trees while they are away... Sorry, I've gone off on the revenge track. I'm really so sorry they've misused you like this and hope you are able to unload this burden ASAP with minimal damage done to your finances. Obviously the relationship with the ILs is another story altogether.

I agree, tho ii could never do it. Maybe" gift" it back for their anniversary this year?

 

[monarch64]

In light of your most recent discovery, I would look into "gifting" the land to someone (or back to them). It can be done. There is hope!

 

[swingirl]

Will there be any "gift tax" to pay on this? Something you might want to check.

 

[VRBeauty]

See if you can donate the land, or sell it, no matter what the loss or cost. You owe it to yourselves to eliminate this financial drain... you don't owe it to your in-laws to make good on their so-called investment.