Homeowner Rights

Many Maine seniors own their home. This chapter will cover some common issues for senior homeowners in Maine. Specifically, the first part of this chapter will talk about:

What to do if you can’t pay your utility bills;
Issues that can arise with home repair jobs;
What happens when you and your neighbor disagree about your property lines; and,
Loan options for homeowners.

The second part of this chapter will help you if you are afraid you might lose your home, or if you are thinking of giving your home away. Either situation can have big consequences, some more obvious than others. These sections will help you understand what your options are in either situation:

Important things to consider before selling or giving away your home (transferring title); and,
Foreclosure.

How Do I Get Help Paying for My Utilities?

If you are having a hard time paying for your utilities, there are some things you can do. The first thing you should do is call your utility provider and see if they will agree to some form of payment arrangement. Depending on the type of utility, your utility provider might be required to agree to a payment schedule. If your utility provider agrees to a payment plan, make sure you get a copy of the agreement in writing.

You might be able to get public assistance to help you with your bills.

Low Income Home Energy Assistance Program

The Low Income Home Energy Assistance Program (LIHEAP) is a federal program that provides aid in the form of funding for oil, propane heat, wood, electricity, and natural gas. LIHEAP helps people pay for their heating costs. Homeowners and renters can apply to this program.

The amount of assistance you might be eligible to receive is based on your income level and the age of the members of your household. If someone in your household is at risk for hypothermia due to a health condition, this also might qualify you for LIHEAP assistance. Keep in mind that if you receive help through LIHEAP, your monthly food supplement benefit might be impacted.

You should contact your local Community Action Program to find out what resources are available to you. Find the Community Action Program nearest you by clicking here. [1]

General Assistance Program

You may also be able to get help through your town or city's General Assistance (GA) Program. General Assistance is often only for people whose income is under a certain limit. However, the income limits can be higher in an emergency. For example, people may get GA if it is necessary to avoid electricity disconnection. You can apply at your Town Office or City Hall.

Emergency Assistance

If you have minor children living with you and are in danger of having a utility shut off, you can apply for Emergency Assistance through the local office of the Department of Health and Human Services. Family income must be below 100% of poverty guidelines or the family must be getting TANF, SSI, or Food Stamps. You should contact your local Community Action Program to find out what resources are available to you. Find the Community Action Program nearest you by clicking here. [1]

Your Rights with your Utility Providers

Maine law provides extra protections against utility disconnection during the winter months to help residents who are struggling to pay their electric bills. Between November 15^th and April 15^th, your utility provider must work with you to try and make your payments affordable to avoid disconnection of service.

Regardless of the time of year, if you or someone in your household is seriously ill or is experiencing a disability, you might be able to get some relief if you are behind on your utility bills.

To find out more about your rights with your service providers, visit the Maine Equal Justice Partners website, available by clicking here. [4]

If you think your rights are being violated, you should speak to an attorney. If you are a Maine resident who is 60 or older, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free.

You can also call the Maine Office of the Public Advocate. The Public Advocate’s office can talk to you about your rights with your utility providers. Call the Public Advocate’s office at: 1-207-287-2445, or visit the Consumer Help section of the Public Advocate’s website by clicking here. [5]

Home Repairs

This section will talk about hiring someone to do work on your house and what to do if problems arise.

Door to Door Solicitations

If a contractor comes to your door and offers to do home repair work for you, you should know that it is very risky to hire this person. The materials used by door to door contractors are usually of poor quality and the work is usually not done well. Also, these contractors can be hard to find if they take off with your money. Even if you do find them, you probably won’t be able to get your money back because they don’t have any to give you. This is true even if you sue them and win.

If you think that you have been scammed by a contractor and you need help figuring out what to do next, you can talk to an attorney for free when you call the Legal Services for the Elderly Helpline: 1-800-750-5353. Legal Services for the Elderly will review your problem and offer advice regarding practical steps to take.

If you want to cancel the contract

The law gives you special protections when you hire a door to door contractor. If you hired a contractor who came to your door and offered to do home repair work for you, you have three (3) days to think over the agreement and cancel the contract without penalty. You should write the contractor to cancel the contract and demand your money back if you have paid him any. Keep a copy of this letter for your records.

If you need help writing this letter, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free.

Hiring a Contractor

If you decide to hire a contractor, consider doing the following to reduce your risk:

Use a contractor with a good reputation

Only use a contractor who is known and who has a good reputation. Do not let yourself be talked into repairs by a person who turns up out of the blue on your doorstep. Make sure someone (other than the contractor) can vouch for the contractor’s reputation. Only hire someone who has been recommended by a trusted friend who has had good personal experience with this contractor.

Get a written contract

Get a written contract before paying any money to the contractor. If the repairwork is going to cost more than $3,000, then you must have a written contract that includes certain provisions such as a “Warranty for Good Workmanship.” This language will protect you if the contractor does a bad job and you end up in court. Do not pay the total contract price up front. If you have to pay some money up front, do not pay more than 1/3 of the total contract price.

If you need help with this, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free. If the LSE attorney can’t help you, he or she can help you find a private attorney who can.

If something goes wrong, get help

The Maine Attorney General’s Office is a helpful resource for any type of home repair problem. It offers a free mediation service that can help you resolve your home repair problem without having to go to court. If you have a problem with a door to door solicitation, you should report it to the Maine Attorney General’s Office at 207-626-8800.

If the contracted work was not finished

If most of the work that was finished was done well, then the contractor should be given the chance to complete the job within a reasonable time. Take photographs to document your problems. Write a letter to the contractor stating your complaints specifically. Date the letter and keep a copy for your records. If the contractor does not respond, or refuses to do any more work, then you can get someone else to finish the job.

You can also sue the contractor for what it will cost to complete the job properly. To do so, you need to get an opinion in writing from either the code enforcement officer of your town or from another contractor. The opinion they give you will be the amount of damages you will try to recover in court.

If the amount of damages you are seeking is under $6,000, you can sue in small claims court without having to hire an attorney. Otherwise, you must sue in a higher court. If you cannot sue in small claims court, you might want to hire an attorney for help.

You can get the court forms you’ll need to bring a small claim at your local district court or on the Maine Judicial Branch’s website. You can find a link to this guide in the Quick Links section to the left. When you go to small claims court, you will present your Statement of Claim along with your evidence. Your evidence may include:

a written contract if there was one;
photographs;
written estimates of the cost of completion; and,
records of any communication between you and the contractor.

If you would like help with any of this, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free.

If the work done to your home was done poorly

If the work was done very poorly then youdo not have to allow the contractor to returnto fix the work. Write to the contractor and list your complaints. Make sure you date the letter and keep a copy for your records.

Take photographs to document your problems. You also need to get expert opinions, in writing, as to the poor quality of the work and what it will cost to repair it. You can get this estimate from the code enforcement officer of your town or from another contractor. The opinion they give you will be the amount of damages you will try and recover in court.

Once you have this information, you can sue him.

a written contract if there was one;
photographs;
written estimates of the cost of completion; and
records of any communication between you and the contractor.

If you would like help with any of this, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free.

If none of the work was performed

If the contractor did not do any work, you can cancel the contract. Write a letter to the contractor to tell him that the contract is cancelled and demand your money back. Make sure you date the letter and keep a copy for your records. If the money is not returned you can suethe contractor for the amount you paid him. If it is under $6,000, you can go tosmall claims court as outlined in the Guide to Small Claims Court, in the Quick Links section to the left.

If you would like help writing this letter, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free.

Paying for the work

The contractor may say that he can arrange for financing to pay for the job (work and materials). Beware! Contractor financing is very risky. Often the interest rates are very high and will end up costing you a lot of money.

Also, be careful taking out a home equity loan to finance the job. Make sure you can afford the payment on top of all of your other debt payments, including your mortgage. If you cannot keep up with the home equity payment, you might lose your home to foreclosure.

Boundary Disputes

If you and your neighbor disagree over the location of a property line, this is called a “boundary dispute.” Boundary disputes can be expensive to fix.

In deciding what to do about a boundary dispute, you may want to ask yourself the following questions:

What is at stake? Is it two feet of land, an acre, or more? Does your neighbor claim that your garage, barn, house, or driveway is located on his land or vice-versa? Will the disagreement affect the value of your property?
How much will it cost to resolve this dispute? Is the fight worth the expense, and can you afford it?
Are you emotionally prepared for a long, unfriendly battle? Are there ways to resolve the disagreement so that even if neither side is totally happy, you can both sleep at night?

If you have a boundary dispute, there are a number of possible solutions. The least expensive and least confrontational way is for you and your neighbor to agree on a new boundary line. There are other more expensive options, like going to court. But going to court is expensive, and it is also a long process. And, even if you are not friendly with your neighbor, the tension of living next to the person you are fighting in court can be very stressful.

Legal Services for the Elderly has attorneys who can try to help you sort out some of the basic issues regarding boundary disputes. LSE may be able to refer you to a private attorney who can more thoroughly investigate your position and help you determine whether it's worth going to court. Call the LSE Helpline at 1-800-750-5353 to talk to an attorney for free.

Loan Options for Homeowners

There are some loans that are offered only to people who own their homes. These loans can seriously impact your finances. Think carefully before you take out one of these loans. This section will talk about reverse mortgages and home equity loans.

Always be on the lookout for predatory lending. Before you take on any new debt, click here to read more about predatory lending in the chapter titled “Managing Your Debt.” [6]

Reverse mortgages

A reverse mortgage is a special type of loan available to seniors who own their homes and want to stay there, but need extra cash. Reverse mortgages work by letting you, the homeowner, access the value that has increased in your home while you have been paying your mortgage. This value is known as “equity.” Generally speaking, your home’s equity is the current market value of your home minus the amount you owe on your mortgage. This is not an exact formula; there are many other factors that are considered when determining equity.

Reverse mortgages are not right for everyone. If you are thinking about taking out a reverse mortgage, you should talk to an attorney first. REMEMBER: It is never a good idea to use the equity in your home to pay unsecured debts like credit cards or medical bills. Call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free.

IMPORTANT NOTE: If your spouse recently passed away and you are worried that you are going to lose your home because of a reverse mortgage, an attorney might be able to help you. If you are 60 or older, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to talk to an attorney for free.

Who qualifies for a reverse mortgage?

If you are 62 years-of-age or older and either own your home outright or owe a small mortgage, you might be able to get a reverse mortgage. Your home must be your principal residence. For a federally insured reverse mortgage your home must be:

A single family home; or
A one-unit to four-unit building (you must occupy one of the units); or
A approved condominium; or
An approved manufactured home.

Usually, your home must also meet certain property standards. And you have to attend counseling with an approved agency first. The purpose of this counseling is to assess whether a reverse mortgage is right for you.

Generally, there are no income guidelines to qualify.

If you are married or have a partner who is under the age of 62

If your spouse or cohabitating partner is under the age of 62, a reverse mortgage could have disastrous effects on them when you die. You should talk to an attorney before you apply for a reverse mortgage. Call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free.

Important considerations

Most reverse mortgages do not require monthly repayment. Repayment is only required:

When you die;
If you sell or give away your home; or
If you do not live in your home for 12 months.

You still have to pay your property taxes and homeowner’s insurance. If the payment for taxes and insurance are not included in your mortgage payment, you will need to pay them separately.

Amount of the loan

The amount of equity that you are allowed to tap into will vary according to your loan. Your maximum loan amount will not necessarily be equal to your home’s equity. Lenders take into account other factors, such as:

Your age;
Current interest rates; and
The appraised value of your home.

Prepayment of loan proceeds

In general, and depending upon your lender, your loan can be paid to you as a:

Lump sum;
Regular monthly income;
Regular monthly income for a specified term; or
Line of credit.

Interest rates and fees

Reverse mortgages are expensive. They usually have high interest rates and large fees. You will need to check with your lender to determine your interest rate. In addition to the interest rate, there are several types of fees that add to the cost of your loan. Read your contract carefully and be sure that you understand the terms.

Insurance

Unlike other private loans, the federal government insures certain reverse mortgages. Reverse mortgages with this insurance have special rules and protections. Some of these special rules apply specifically to foreclosure. Other rules cover what can be used to satisfy your debt. You should talk to your reverse mortgage counselor about the specific details of your reverse mortgage.

You can call the Legal Services for the Elderly Helpline at 1-800-750-5353 to speak to an attorney for free.

Repayment

Generally, the loan is repaid when the borrower dies. Usually, your home is the only asset that can be used to repay your loan But, your heirs might not be required to sell your home if they can pay the loan with other assets. If you were planning to leave your home to a loved one after your death, a reverse mortgage may not be right for you.

Effect on benefits

If you receive benefits such as Social Security Disability (SSI) or Medicaid, your benefits may be affected by the payments you receive under your loan.

Home equity loans

Home equity loans or lines of credit allow you to borrow money based on how much “equity” you have in your home. Generally speaking, your home’s equity is the current market value of your home minus the amount you owe on your mortgage. But this is not an exact formula; there are many other factors that are considered when determining equity.

With a home equity loan, you can either get one lump sum payment, or a line of credit that allows you to draw upon the money as needed.

Home equity loans require monthly payments to repay the loan. These payments start as soon as you take out the loan. If you don’t make these monthly payments, you can lose your home to foreclosure.

If you decide to apply for a home equity loan, make sure you can afford it. Figure out how much you can afford to pay, and then shop around. Be careful about hidden costs and fees and predatory lenders. Don’t sign anything unless you understand and agree to the terms. Don’t risk foreclosure or risk losing equity in your home by spending too much to borrow money.

REMEMBER: It is never a good idea to pay credit card debt or medical bills with the equity from your house. If you are having difficulty with a debt collector and are worried about not paying a debt, contact an attorney first. If you don’t own a lot of property, you may be “collection proof.” This means a debt collector cannot collect against you. An attorney will be able to advise you on how best to proceed. Call the Legal Services for the Elderly Helpline at 1-800-750-5353 to talk to an attorney for free. For more information about how to handle your debt, click here to see the chapter “Managing Your Debt” in this handbook. [7]

Transferring Title to Your Home

If you own your home, it is probably your most valuable asset. If this is true for you, it is especially important that you protect yourself if you decide to sell it or give it to someone else.

Whatever the reason behind your decision to transfer title to someone else, this is a big decision and it can impact many things. Below are a few important things to consider.

Giving your house as a gift can affect your MaineCare eligibility

If you are thinking about giving someone your home in exchange for care, or if you are getting pressured to do this by concerned family members, call an attorney before you act. If you give your house to someone as a gift, you might be denied MaineCare later. Whatever the situation, an attorney can help you to consider the risks and decide if it is best for you. If you are a Maine resident who is 60 or older, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to talk to an attorney for free.

Getting “fair market value”

If you decide to sell your house, the price can impact your MaineCare eligibility. If you sell your house for less than “fair market value” you may be denied MaineCare. If you are selling your home to anyone, even a family member, for less than the house is worth, talk to an attorney first.

Also, if you are thinking about giving your house to someone as a gift, you should know that doing so might mean that you will be denied MaineCare. If you are thinking about doing this, you should talk to an attorney first.

Call the Legal Services for the Elderly Helpline at 1-800-750-5353 to talk to an attorney for free.

Giving property in exchange for care

This is very risky. If you are thinking about giving someone your home in exchange for care, you need to talk to an attorney first. Although this might seem like an easy solution to your problems, there are several things that can go wrong. Once you transfer the deed, the property no longer belongs to you. This means you have no control over what happens to it. Even if you give it to a person who means well, they could lose the property by mistake. Or, you could be asked to leave at any time. This can be true even if the person promised that you could live there for the rest of your life.

If you are thinking about giving someone your home in exchange for care, call the Legal Services for the Elderly Helpline at 1-800-750-5353. You can speak to an attorney for free.

Foreclosure

The most common form of financing when you buy a home is a “secured mortgage.” In a secured mortgage, typically the house is the “security.” This means that if you do not pay your mortgage payment, the lender can use a legal process to take the house from you. The lender will then sell the house to try and recover the money they loaned you. This process is called “foreclosure.”

If you are struggling to keep up with your mortgage payments, take action. Call the Maine Bureau of Consumer Credit Protection’s Foreclosure Prevention Hotline at: 1-888-664-2569 to get free advice and help you can trust.

You should also call an attorney for help. The attorneys at Legal Services for the Elderly might be able to help you work out a deal with your mortgage servicer or help you through the foreclosure process. Call the Legal Services for the Elderly Helpline at 1-800-750-5353 to talk to an attorney for free.

WATCH OUT FOR FORECLOSURE RESCUE SCAMS!!!

It is scary to think that you might lose your house. Unfortunately, there are scam artists who are ready to prey on this fear and take advantage of you. A foreclosure rescue scammer might contact you and offer to help you pay your mortgage. They might call, email, or send you a letter in the mail. They will refer to themselves as a title that sounds very official, such as “mortgage consultant,” “foreclosure consultant,” “foreclosure rescue agency,” or “foreclosure services.” They might suggest that you send your monthly payments to them instead of your lender. Some might even go so far as to offer a promise to stop the foreclosure process or save your credit.

Remember: A legitimate financial counselor:

Will not make promises about saving your home or ending the foreclosure process,
Will not request a fee in exchange for their services;
Will not tell you that they can “save” your home if you transfer your deed to them; and,
Will not tell you to make your monthly payments to anyone other than your lender.

Resources

Maine Bureau of Consumer Credit Protection
If you are struggling to keep up with your mortgage payments, take action. Call the Maine Bureau of Consumer Credit Protection’s Foreclosure Prevention Hotline at: 1-888-664-2569 to get free advice and help you can trust.

To file a complaint about your lender or a potential lender, contact the Maine Bureau of Consumer Credit Protection by clicking here [8], or call:1-800-332-8529 OR TTY:1-888-577-6690.

Legal Services for the Elderly
If you are a Maine resident who is 60 or older and you are having a problem related to your rights, or are worried about losing your home, or are thinking about giving your home away, call the Legal Services for the Elderly Helpline at 1-800-750-5353 to talk to an attorney for free.

The Office of the Maine Attorney General
If you have a problem with a home repair job, or if you want to report a problem with a door to door contractor, call the Office of the Maine Attorney General at 207-626-8800.

For more information pertaining to homeowners in Maine, or to see a model home repair contract, check out the Maine Attorney General’s Consumer Law Guide. Get the Guide by clicking here. [9]

Pine Tree Legal Assistance
If you are under 60 and worried about losing your home to foreclosure, you might be able to get an attorney to help you for free, or at a reduced rate. Contact the Maine Foreclosure Prevention Hotline 1-888-664-2569 or visit Pine Tree Legal Assistance’s Foreclosure Prevention Toolkit by clicking here. [10]

For tips on what you can do if you are not able to afford the taxes on your house, visit the PTLA website on the topic by clicking here. [11]

Maine Attorneys Saving Homes (MASH)
If you received a Notice of Foreclosure, call the attorneys at Maine Attorneys Saving Homes at: 1-800-442-4293 for help.

Maine State Housing Authority: Foreclosure Counselors
To find a HUD-approved housing counseling agency near you that provides free foreclosure prevention counseling, visit the Maine State Housing Authority Foreclosure Counselor website by clicking here. [12]

Maine Community Action Program
Get free help now. To get help with your utilities, contact your local Community Action Program by clicking here [1].

U.S. Department of Housing and Urban Development
To find a HUD approved HECM counselor for a Reverse Mortgage, visit the HUD website by clicking here. [13]

Federal Trade Commission:
For more information on homes and mortgages, visit the FTC website on the topic by clicking here. [14]

Maine Department of Health and Human Services: Office of Aging and Disability Services
For information about state programs that can help with your property tax bill, call the Office of Aging and Disability Services at 207-262-8475 or visit the website by clicking here. [15]