REAL PROPERTY

A. The value of the home in which the client and their spouse have ownership interest and that serves as the client’s primary place of residence is exempt as described in 3.520.77.C. Client statement is acceptable as verification of the value of the client’s primary residence. B. In order for real property to be considered a resource, the following shall be determined: 1. The actual value less encumbrances of the ownership interest: a. Actual value of real property may be obtained by using the actual value reported by a county assessor or from the most recent property assessment notice. b. The assessed value shall be verified from a copy of the most recent property assessment notice or with the county assessor's office on the Internet, by phone, personal contact, or in writing. c. Encumbrances include mortgages, liens, judgments, delinquent taxes, loan agreements, and other forms of indebtedness. Encumbrances shall be verified by such methods as collateral contact, county recorder records, bank records, and other credible sources. Only direct and documented encumbrances against a specific item or property shall be considered in determining its equity value. Verbal agreements of indebtedness shall not be accepted. 2. The negotiability of the ownership interest (that is, there are no legal restrictions from selling the client's property interest); and, 3. The ability to sell the property interest (that is, that the ownership interest can, in fact, be sold on the open market at any price). C. The degree of the ownership interest is determined by the type of ownership. Generally, the types of ownership are: 1. Sole ownership, in which the client, the client’s spouse, or sponsor(s) is the only owner. if the client, spouse, or sponsor(s) has the right to dispose of the property, the actual value less encumbrances of the property is determined and counted as a resource; 2. Shared ownership, in which the property is owned by the client, spouse, or sponsor(s) and one or more individuals. The actual value less encumbrances is determined and charged in proportion to the client, client’s spouse, or sponsor(s)’s share of ownership. There are two kinds of shared ownership: a. Joint ownership or ownership in common, in which the property's actual value less encumbrances is divided equally among the owners; and, b. Tenancy in common, in which the property's actual value less encumbrances is divided by the number of owners in proportion to their stated interest (which may not necessarily be equal). D. Negotiability and, if applicable, the ability to sell the property interest at a reasonable price must be determined. Negotiability refers to the client, client’s spouse, or sponsor(s)’s legal right to dispose of an ownership interest; ability to sell refers to the client, client’s spouse, or sponsor(s) legal ability to sell. Reasonable price is determined to be two-thirds of the actual value. 1. Negotiability - there may be legal reasons why a client, client’s spouse, or sponsor(s) may not be able to sell the property interest, such as when the estate is in probate or there is a lawsuit pending against the property. The refusal of co-owners to consent to the sale of a property interest is not a legal restriction of the client, client’s spouse, or sponsor(s)’s right to sell. 2. If the co-owner of the property uses the property as the principal place of residence and sale of the property would cause undue hardship, the client, client’s spouse, or sponsor(s)’s equity in the property shall be exempted, unless the co-owner is the spouse or sponsor(s). Undue hardship for this purpose is defined as: a. The co-owner uses the property as his or her primary residence; and, b. The co-owner would have to move as a result of the sale of the property; and, c. The co-owner has no other available housing, including relatives or income to rent at fair market value; and, d. The co-owner documents, in writing, his or her undue hardship allegations; and, e. Using prudent person principle, the county department determines the undue hardship allegations to be reasonable. 3. If the client, client’s spouse or sponsor(s) cannot sell the property for two- thirds of the actual value, the property shall be exempted provided there continues to be reasonable efforts to sell the property such as listing the property with an agency or by advertising in the local media. a. The county department shall verify on a quarterly basis that a reasonable effort is being made to sell the property. b. The property shall not be exempted if the county department, using prudent person principle, determines the client, client’s spouse, or sponsor(s) is not making a reasonable effort to sell. c. If the client, client’s spouse, or sponsor(s) rejects an offer to purchase the property that is at least two-thirds the actual value of the property, the entire equity value of the property shall be considered a countable resource. 4. If the property interest cannot be disposed of because of legal technicalities, the client, client’s spouse, or sponsor(s)’s equity value is not a countable resource. The county department shall verify any limitations that prevent the disposition of the property and document those limitations in the statewide automated system case comments.