Grandmother paid off my mortgage for rights to live in my house until her death. Now, she has changed her mind and wants her money back. What can I do?

I own property in Kentucky. When I moved out of state I rented the property. After some time, my grandfather died and my step-grandmother wanted to move into town. She doesn't drive and wanted close access to banks, church, grocery stores, etc.

She has always liked my house, and wanted to live there. She cashed in her retirement fund, and agreed that she wanted to move into my house, but she didn't want to pay rent. She wanted to live there permanently. I offered to sell the house to her, but she could not afford market value for the home. So, I compromised and offered to let her live there for the rest of her life if she would pay the balance of my mortgage.

She agreed to pay the lesser amount for rights to live there. So, she gave me a check for $26,000. The balance on my mortgage was around $24,000, so I had a small cash profit from the transaction.

As part of our agreement she was to maintain the home and repairs, and pay one half of the taxes and insurance. I would pay the remaining half.

This was an entirely verbal agreement (I know, I know). However, in the state of KY verbal contracts are binding to the best of my knowledge, although difficult to defend.

Now to the meat of the story. My grandmother has a niece who claims she has been assigned POA. This lady has been messaging me on Facebook and making demands. She has also threatened to retain a lawyer.

This lady pointed out that my 2018 property taxes are delinquent. I absolutely Am going to pay them. However, the lady also states that I need to make major repairs to the house and that it is falling apart. She is accusing me of taking advantage of the elderly because the deed to the house is still in my name.

So, I am debating what I should do that would be legally my right or responsibility. Do I HAVE to deal with this woman who claims POA? I am not in a position to make any repairs to the home. My grandmother was supposed to assume responsibility for that, and the home was in GOOD condition when she moved in. So, any repairs would be from neglect or damage.

I am not convinced that I owe my grandmother $26000 either. She has lived in the home two years. Fair market value for my home for rent is $500-$550 per month.

We did not have landlord/tenant arrangements, as this is more of a verbal life estate agreement. So, can I revert this to a more standard landlord agreement since she wants to terminate the life estate agreement? Can I say, well, you have lived here for two years, and in that time rents would have been $12000-$13200, so I can reimburse your $26000 minus rent? Can I retain any extra as a penalty for terminating the agreement?

This is all over the place, and a hot mess. I need advise on what to do. Right now my options are to either buy her out for an unspecified amount, or to give her the deed for less than market value. If I do the buy out I will have to take a loan. If I do the deed I will lose money on the house.

What advise do you have?

Written By: birdbraindrain
Source: http://bit.ly/2G7AZOF