Parent Owns + Ryan Braun April 19, 2022
HOUSING OPTIONSPARENT OWNS +
Parent owns a second property for use by a family member with a disability and rents a portion of the property to a housemate(s)

Parents can purchase a second home in their name for use as the residence of the family member with a disability and housemate(s). The property can remain in the name of the parent(s) during their lifetime, and transfer to their heirs upon the death of the parent(s).

Low Risk

Liability Risk

High Risk

Much Control

Day-to-Day Control of Property

Little Control

Much Control

Long-Term Control of Asset

Little Control

Flexible

Flexibility to Move

Limited Flexibility

What is this?

Parents can purchase a second home in their name for use as the residence of the family member with a disability and housemate(s). The property can remain in the name of the parent(s) during their lifetime, and transfer to their heirs upon the death of the parent(s).

The parent(s) may have an informal understanding with the heirs to continue rent to the family member with a disability, but the heirs are under no legal obligation to continue to do so. The parent’s informal agreement could include an understanding of the circumstances under which the family member with a disability would move from the home, such as if the neighborhood became unsafe or if the home no longer met the person’s accessibility needs.

The parent(s) should enter into a lease agreement with any housemate(s). The housemate(s) is a  tenant and the parent(s) is the landlord. If the housemate(s) has a disability, the parent(s) should be aware that they must charge fair market rent or the tenant/housemate(s) will be at risk for reduction or loss of public benefits (i.e. Medicaid and SSI). Information in this section highlights the unique considerations that come into play when the housemate(s) is a person with a disability. 

See “Parents Own Second Property and Rents Only To their Family Member with a Disability” to explore the difference between these options.  

What Circumstances Make this a Possible Fit?

    • The parent(s) has the financial means to purchase a home in their name(s). 
    • The parent(s) is able to pay the mortgage even if they are unable to identify a tenant/housemate(s) to defray housing costs (mortgage payments, taxes, renovations, etc.).
    • The parent(s) seeks the benefit of providing a home where the family member with a disability can live long- term and wants the value of the home to go to other heirs when the family member with a disability passes away or is no longer able to live in the home due to changes in health condition or deterioration of the neighborhood. 
    • The parent(s) is comfortable with  an informal understanding with the heirs to continue to rent to the family member with a disability. Without a trust, any agreement about how the property will be used can be ignored, or subject to creditor risks.
    • The parent(s) is willing to be a landlord and is able to resist control over the day-to-day activities within the home and recognize that the tenant(s)/housemate(s) have rights to privacy, choice of activities, etc.
    • The parent(s) is willing to undergo training on tenant-landlord law if seeking assistance from Hamilton County DDS to find housemates. 
    • The parent(s) is aware that each housemate/tenant has unique needs, wants, strengths and weaknesses and that each may also have a parent/guardian who desires to ensure that their family member is happy in the living arrangement. 
    • The parent(s) recognizes that there may also be a provider and Service and Support Administrators involved who may have perspectives on situations that arise. The parent(s) are able to balance all of these perspectives and assist in reaching solutions to challenges that may arise.
    • The parent is aware that the tenant(s) may have provider staff who might cause damage to the home (e.g. damage appliances, floors etc.) The parent(s) will not have a contract with the providers in the home and therefore it may be difficult to get the provider to agree to pay for the damages. Insurance may be able to offset this risk.

What Does This Mean to My Family Member with a Disability?

This option makes it possible for the parent(s) to help the family member with a disability get established in a (hopefully) long-term home with regular social interaction with a housemate(s). While this option is easier to set up, it has the potential to leave the family member with a disability vulnerable to changes over time, which could be counter to the parent(s)’s original intent. 

Changes in the needs of the family member or their housemate(s) and/or changes in the neighborhood may mean that the interests of the family member with a disability could be better met in a different housing situation. Issues related to the inheritance of the property, as outlined below, may also impact the family member with a disability and their housemate(s).

Often roommates use the same provider staff. If one of the roommates wants to change providers, this can create difficulties for the other housemate(s). See Information and Resources: Provider Agencies and Housing.

What Does this Mean to My Estate?

The property remains in the name of the parent(s) during their lifetime. The home will transfer to heirs through probate or Transfer on Death Affidavit in Ohio. If there is no Will, it will be divided equally among the property owner’s heirs, otherwise it will transfer according to the Will or Transfer on Death Affidavit. 

Where Do I Get More Information?

Pros

Cons

Pros and Cons

Extent of Control

Effects on Public Benefits

Longevity

Property Management Responsibility

Financial Considerations

Long Term Flexibility

Tax Issue

Created by a Home Think Tank workgroup. 

Information on this sheet is provided for informational purposes only. Nothing in this document should be considered legal or accounting advice. Contact a professional for information pertinent to your specific situation.

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