Q: I just want to know who is responsible for a leak coming into my son's room in a town home unit that shares a common wall with my neighbor (her kitchen.)
I was told I am responsible for the repair. Is my neighbor also responsible even if she tells me that she has no leak? I read that my homeowner association has a master policy that covers common areas in the community.
Shouldn't they also cover the buildings with shared walls? They told me that I own the wall; yet it's a shared wall so that my neighbor must also own it as well. What could you tell me about such an arrangement?
A: This is perhaps the most common, and most confusing, issue that community association's face, namely who is responsible for water leaks —– the unit (and if so which unit) or the association.
First, you have to read the legal documents of your association. Although there are some variations in different states, typically, in a condominium those documents are the declaration and bylaws, and in a homeowner association, they are the covenants, conditions and restrictions, commonly referred to as CC&Rs.
Typically, most legal documents will spell out who owns what, and who is responsible for maintenance and repair. Has your association filed a claim with the master insurance policy? From my experience, the company will send a claims adjuster who will (1) review the legal document and (2) make a decision as to whether there is coverage.
However, from my experience representing a number of community associations, the first thing that the association should do it is to determine the source of the leak. If the leak persists, it may create mold, which is generally excluded from most insurance policies.
The association should hire, at its expense, a licensed plumber to try to find where the water is coming from. If it is from a common pipe — one that serves more than just one unit — then it would be the association's obligation to repair.
Do you have your own insurance policy that covers the unit? This is known as an HO-6 policy. If so, you should also talk with that insurance agent to determine if a claim should be made against that policy. If you do not have such a policy, I strongly suggest that you immediately get one. It will not assist with the current problem but it may save you a lot of money in the long run.
Q: How does one avoid inheritance tax? My father has no other assests other than a few thousand dollars in the bank. How does he go about leaving it without the heirs paying the tax?
A: Inheritance tax is state specific, so it depends. In Maryland, for instance, only certain transfers are taxed. Property left to close family is exempt from inheritance tax. In Virginia and D.C., there is no inheritance tax.
There is no federal inheritance tax, and very few states still impose such a tax. You have to either search your state on the Internet or talk with an attorney or financial advisor in your state.
Perhaps your father could give you (and all other siblings) the money so if there is an inheritance tax in your state, there would be nothing to tax. With the federal estate tax, there is what is known as a "lookback" period. If, for example, the property is transferred, there is no lookback period for inheritance tax as there is with estate tax. In other words, the state cannot go back and say "you really owned that money, so please pay us the tax".
Sometimes people say inheritance tax and they mean estate tax. They should check inheritance and estate tax exemptions in their state. D.C. and Maryland, for example, have a $1 million estate tax exemption and Virginia has no estate tax. (So one could move to Virginia where there is no estate or inheritance tax.)
The federal estate tax exemption this year is $5,250,000.
Benny L. Kass is a practicing attorney in Washington and Maryland. No legal relationship is created by this column. Send questions to mailbag@kmklawyers.com