What Would You Do?

[DayByDay]

Here's the situation:

About 22 years ago, we bought from my husband's uncle a 20 acre piece of land in a remote area of Arizona (we live in northern CA). We bought it WITH one of my husband's friends at the time. (Dumb. Don't know what we were thinking.) It's been paid off for many years. Can't remember what the purchase price was... between $13,000 - $20,000 maybe, of which we paid half.

The "friend" skipped out on us (have no idea where he is), and we've been stuck paying the property taxes by ourselves since 1994. This year's property tax amount is $409.

We can't sell it because this guy's name is on it. Similar properties currently for sale in the area are asking $27,000 - $60,000. However, I doubt anything is really selling even close to those prices with this economy and the remoteness of the area.

I've read there is a legal thing you can do called "partitioning" to get separated from this other owner, but it is very expensive. I'm guessing that the value of the property is so low that going through all the complicated and expensive legal stuff is not even worth it.

We have had very low income for a while now and our savings has been draining. I really don't want to pay this property tax anymore or pay for legal stuff. We are just trying to survive and cannot go to Arizona to even deal with any of this. It feels like we are just throwing the money down the drain every year.

Would you just stop paying the taxes and dump the property? Does not paying the property tax go on your credit report?

[cschin4]

I think you should seek legal advice and get this resolved. You may be able to sue the "friend" as well for not paying his share of property taxes. I think it is going to cost you more in the long run to not get the legal advice and just get out of this. You need to either have him pony up or to take legal control of the property and so you can sell it.

[swanson719]

Look into squatters rights for Arizona. In most states, if you occupy or improve land for a given number of years without the owner(s) doing anything about it, the land legally becomes yours. This may be the case in Arizona. I live in Missouri but own land in Pennsylvania and routinely have to notify people encroaching the property line to move their stuff. I actually had a neighbor build half a garage on my property and he had to move it.

[maat55]

Take this question to biggerpockets.com. It is an real estate forum I go to for this kind of advice.

[buildmybudget]

Wouldn't it be a big loss to lose this investment* after all you have put into it? It seems that the key is to find this individual-- Have you exhausted all your options to try and find him? Maybe he's experiencing tough times too and would agree to taking his third of the property minus the portion you have paid for him..?

[PetMom]

I will point out one potential problem here and it even applies to your friend. It applies to your friend in that if you don't pay they will be able to put a lien in his name and yours.

Not paying property taxes allows a lien to be placed on the property.

It can be confiscated to be auctioned to pay for the back taxes.

You have been paying the full amount of yearly property taxes. If you stop they assess a lien after a certain amount of time on both property owners.

[KTP]

Just sue your former friend in small claims court for his share of the back property taxes. If he doesn't even show up for the court date, then maybe the judge would rule in your favor and give you the property?

[jasonnoguchi]

This is an extremely tricky situation. I have been in it myself and I am still paying the stupid property tax. We should get proper legal advise.