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My boyfriend's parents passed away and he and his sister were left with his father's house and the land around it.

He's been living there ever since, but in horrible conditions. He can afford the home, but just barely.

He has no heat and often has to sleep elsewhere during the winter season. He lives alone and has no reason to keep such a large house.

He wants to move out, and sell the property but his sister won't let him. He pays all the bills and the mortgage on the home.

She can't afford to buy his half of the property, and she doesn't contribute to the payments. She lives elsewhere.

What can he do? I hate seeing him in a position like this.

Aaron Hall
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Red
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    Why would she need to buy his half of the property? Sell it to a third party, split the proceeds as appropriate between the two co-owners. – ChrisInEdmonton Jan 08 '17 at 15:22
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    @ChrisInEdmonton She refuses to allow the house to be sold to a third party. – Eric Jan 08 '17 at 16:19
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    "his sister won't let him" and "She lives elsewhere" are key. This translates to "Lawyer." We can offer financial advice, a fair way to split things, even taking relationships into account. Here, it seems there's no room for discussion. – JTP - Apologise to Monica Jan 08 '17 at 16:30
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    How much is the home worth, and how much is owed on the mortgage, and whose name is on the mortgage? (Father, boyfriend, boyfriend and sister?) – TTT Jan 08 '17 at 16:59
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    @TTT: I'm confused, why do you need to know how much the home is worth? – user541686 Jan 09 '17 at 01:14
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    @Mehrdad - I believe the best course of action would be different if the house has a lot of equity, compared to what to do if it has very little, or is underwater. For example, in an extreme case with little equity and not in his name, if his sister doesn't change her tune he could just walk away. – TTT Jan 09 '17 at 01:20
  • @TTT: Probably best to just write an answer that includes all the cases then. It doesn't seem the OP should have to disclose how much the house is worth to get an answer to this question that is suitable. – user541686 Jan 09 '17 at 01:22
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    @Mehrdad - I disagree. It could take an hour to write a well thought out answer for all scenarios, but only one of them will be relevant. If OP wants a well tailored answer to her situation she should provide more information. She could also choose to remain anonymous (and she has) if she is uncomfortable with someone tying a dollar amount to her personally. – TTT Jan 09 '17 at 01:27
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    @Mehrdad For the same amount of effort, the usefulness of the answer to the OP will depend on how much of the answer applies to the OP's situation. – David Schwartz Jan 09 '17 at 05:20
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    Where I live (Germany) you always have the option to force-auction a co-owned real estate property and split the money with the other owner(s). But I don't know if that's an option where your friend lives... wherever in the world that may be. – Philipp Jan 09 '17 at 08:35
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    I hope that he is keeping careful records of mortgage an utility payments, as he might (should) be entitled to a refund from the proceeds of an eventual sale (possibly adjusted by the fair rent value of the time which he spent living there) – Mawg says reinstate Monica Jan 09 '17 at 08:57
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    As @Philipp points out, the answers will differ between different jurisdictions. This question should really be closed as Unclear until it is edited to indicate which country it's in. – TRiG Jan 09 '17 at 10:39
  • Most likely he will have to buy her out. If you go to court, most likely she will either have to pay him half of fair market value, or he can pay her half of fair market value and then sell it. –  Jan 09 '17 at 15:17
  • Technically, your boyfriend's house would be warmer and less vacant if someone moved in with him. Even better if that someone has a source of income and could help with the bills and mortgage. – TigerhawkT3 Jan 09 '17 at 20:58
  • The "last resort" is usually a legal suit to partition (at least in the US): http://homeguides.sfgate.com/can-forced-selling-jointowned-house-63753.html It's always preferably to come to an agreement in advance, though. – BrianH Jan 09 '17 at 21:44
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    I suspect the bank has not been told. The problem you have there is you may not qualify for a loan with the bank. Not sure how that works. Are you sure the house has equity (it will sell for more than owed the bank)? Sister is not being fair by not allowing the house to be sold. If he stops making payments then the bank will foreclose and they both lose. – paparazzo Jan 09 '17 at 23:34

8 Answers8

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He needs to go see a lawyer to find out what all his options are, and the consequences of any of them. Then he needs to get help extricating himself from this situation, in whatever fashion he chooses: buyout, giveaway, what have you. This situation involves property, which involves money, so definitely get professional advice on this. Otherwise, 20 years from now, he could be hit with a bill for back taxes or what have you, if whatever he does, isn't done correctly and completely.

The situation does stink, on ice. Either he's going to be the pissed-off party in this situation, or she is, or they both are...but there's money involved, and property involved, and at least one recalcitrant family member involved. Best case scenario, he writes up the story and sells the plot to Lifetime for a movie-of-the-week.

(If I were in this situation, I would donate my half of the property to some charitable group, then have a lawyer send Sis a letter saying that it had been donated. Maybe even pick a charitable group aligned with Sis' interests, so that if Sis does want to try and negotiate with them to buy it out, she's giving the sales money to a group/cause that she believes in. But...then, it would No Longer Be My Problem. But that has consequences of its own, and your boyfriend needs to be aware of all of them, including any tax implications for him, before taking any such step.)

LiAnn
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  • She won't allow her brother to sell it, but hasn't given much of a reason why other than that the property around the house would go with it... Though she doesn't use it for anything so it doesn't really make sense. She and her husband have a house of their own in the same town with their kids, and she has no use for the home.. I don't know if the reason is sentimental but it's horrible to have him living in conditions like that. – Red Jan 08 '17 at 17:49
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    Making sense has nothing to do with property law. He either need to do something officially, do something by consensus, or not do anything. It sounds like he has made that decision, for now, and the fact that you find it horrible is your problem. – keshlam Jan 08 '17 at 18:41
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    Possible reasons for her wanting to keep the house and property: rental income, equity, ability to improve their/her credit because of that asset...she doesn't have to do anything with the property to indirectly benefit from owning it. If your bf isn't taking action to do anything about the situation, there's only so much you can push on that rope before you drive the both of you straight up the flue. – LiAnn Jan 08 '17 at 20:38
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    Your parenthetical statement about donating your ownership to charity makes no sense - he can barely afford to move out on his own, how could he afford to do that? He wants to liquidate his share of the equity so he can better afford to move into his own place, not simply get rid of the house. She obviously benefits from him paying the mortgage which builds her equity. An obvious solution: If he could find a renter, they might both be happy. – Aaron Hall Jan 09 '17 at 02:20
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    @AaronHall Ah, but if a person is in this situation (truly financially strapped, wants to get out, can't necessarily afford lengthy lawyer fees) donating might be the cleanest way out - they'd need to get a lawyer to help with the donation paperwork, and make sure that that was all complete and correct, but then they'd have the money that was being paid on House, to rent somewhere else. Ideal? No. But one sure way to extricate oneself from this situation with low personal cost (monetary or stresswise.) Liquidation is, indeed, the ideal. But it may cost more than it's worth. – LiAnn Jan 09 '17 at 03:37
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    @LiAnn It's a valid option to consider but you may want to clarify those pros and cons in your answer. – Lilienthal Jan 09 '17 at 09:53
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    Agree with @AaronHall and Lilienthal; the rest of this answer is great but I disagree with the final parenthetical note. May want to clarify or just remove. – Wildcard Jan 09 '17 at 10:05
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    How can you donate half a house to a charity? What charity would accept a situation like this? – Ben Miller Jan 09 '17 at 15:25
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    Also worth pointing as there is mortgage on the house donating it is probably impossible. – psatek Jan 09 '17 at 15:56
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    There are people who make their living from buying fractions of real estate from conflicted co-owners and then working the other parties over the years to sell as well. That's the easiest option, not very profitable, but still better than donating. – Agent_L Jan 09 '17 at 17:19
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    The charitable donation seems backhanded. You aren't donating a property they can use or sell, you're donating a mortgage payment with a questionable ownership stake. Unless the charity specializes in real estate, like a homeless or housing related charity, AND has the experience and interest in rehabilitating questionable properties AND the experience/longevity to ride out ownership disputes it is a poor donation. – Freiheit Jan 09 '17 at 17:55
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    @Freiheit that's a very good point - I doubt any charity would accept such a donation. Ownership in real property is not just an asset, but a liability. Such a donation would make the mortgage come due as a term of the mortgage contract - and since they both have no way to pay it, the bank would auction the house off, pay themselves first, then the prior owners may get anything left over. - I have removed the parenthetical comment, if the answerer keeps it removed, these critiques become obsolete, and should be flagged as such. – Aaron Hall Jan 09 '17 at 19:55
  • Maybe I'm missing something but this answer does nothing but restate a couple of the facts.... – quid Jan 10 '17 at 01:53
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It seems likely that the mortgage is not in your boyfriend's name because he never would have qualified if he can't even afford utilities after paying the mortgage. It also seems unfair that his sister continues to have a 50% share of the equity if your boyfriend has been making the entire payment on the mortgage every month.

What would happen if your boyfriend stopped making the payments? His sister would have no choice if the property went into foreclosure. Your boyfriend has all the leverage he needs by simply refusing to continue making the payments. Why he won't push his sister to make a deal is the real question you need to ask him. In the meantime, if he wants out, all he has to do is decide not to keep paying whether his sister feels attached or not.

NL - Apologize to Monica
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    What might happen if he stopped making the payments? All sorts of possible reactions from the sister, some desirable, others not so much. What would definitely happen if he stopped making the payments? It would hit his credit rating. That makes this a very bad idea. – Mason Wheeler Jan 08 '17 at 23:11
  • Only problem here is, that ruins his credit rating as well. His life would be financially handicapped: he'd have serious problems getting any loans ever, he may have a few problems getting jobs, he may not be able to buy a house for several years, if ever. He has to make sure to protect himself financially from any actions he takes. I'm sure that there's a perfectly legal way for him to force Sis' hand...but he needs to find out what that method is. – LiAnn Jan 08 '17 at 23:11
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    @MasonWheeler & LiAnn both of you assume that he signed a mortgage rather than making payments on a mortgage that already existed. I didn't suggest that he actually stop making the payments. I suggested that since he is the one making the payments, he has all the leverage here. – NL - Apologize to Monica Jan 08 '17 at 23:19
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    I'm curious how he ended up with the mortgage in his name but not also hers. – Murphy Jan 09 '17 at 17:06
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    @Murphy, that's my point, it probably ISN'T in his name. – NL - Apologize to Monica Jan 09 '17 at 17:18
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    @NathanL It has to be in SOMEbody's name. It can't be in the parents' name anymore. They're deceased. – David Jan 09 '17 at 18:45
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    @David If they haven't informed the mortgage company that the owner is dead, it certainly can be in the parent's name. That creates a different set of problems, yes, I know. The OP hasn't provided enough information, so we're stuck with speculation on these points. – NL - Apologize to Monica Jan 09 '17 at 18:54
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    @NathanL Then I'm guessing that the title DIDN'T actually transfer then, either, which means that he's NOT the co-owner of the house. Again, yes, it's own set of problems. – David Jan 09 '17 at 19:17
  • @NathanL - I was thinking the same thing as you- whose name is on the mortgage? If only OP would answer my questions I posed in a comment shortly after the question was posted... This was exactly the kind of "what if" comment banter I was trying to avoid. – TTT Jan 09 '17 at 20:55
  • If he just quits paying the bank may foreclose and they both lose. – paparazzo Jan 09 '17 at 23:26
  • @Paparazzi Right, that's different from status quo where he loses and she gets all the benefit if he just keeps paying the mortgage and living in an icebox. – NL - Apologize to Monica Jan 09 '17 at 23:34
  • +1 because it seems really quite unlikely that the OP's boyfriend qualified for the mortgage, and mortgages aren't transferable. – stannius Jan 10 '17 at 20:30
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How did the house pass to them? Was it held in Trust? Were they both jointly listed on the deed? If no to both, then the house should have gone into probate..assuming this is going on in the US...where the probate court would reassign ownership. Until this happens the house cannot be sold and is formally owned by the estate.

I agree with the former post suggesting you find an estate attorney in the area to see if this dispute can be amicably settled. Tying it up in litigation will be EXPENSIVE and take a great deal of time

BruceM
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    I've been talking to him and he seems content to just let things happen. Which is kind of who he is. Overall though, it's a bad spot for him. Currently inside of his house is below freezing and even the water coming out of the pipes (literally, out of the pipes) is frozen solid. – Red Jan 08 '17 at 18:35
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    It's his problem. You can't make him want to do anything about it. Back off. – keshlam Jan 08 '17 at 18:39
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    You can lead a horse to (frozen) water... but you can't make him drink... If his options are "deal with it", "walk away" or "compromise"... sis has removed #3 and he's said no to #2... – WernerCD Jan 09 '17 at 04:21
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    @keshlam That's just rude. I, for one, appreciate when my loved ones are concerned about me, even if I disagree with them. I don't see a problem with encouraging him to do something. There is a line where you can take that too far, but we don't have any indication that the OP is even approaching it. – jpmc26 Jan 09 '17 at 05:17
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    @jpmc26: If he is "content to just let things happen", then concern has been expressed and he has considered it and decided he doesn't agree. That's his right. A girlfriend really has no standing here; if he has decided not to act, that should be the end of it. Trying to push the boyfriend into active contention with his sister is a good way to lose the boyfriend. Give him a few suggestions -- compromises, lawyer if agreement can't be reached -- and then, I say again, back off. If it's his property, he is entitled to let his sister abuse it if he so chooses. – keshlam Jan 09 '17 at 16:05
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    @Red Frozen water coming out of the pipes is nothing compared to the problems that come with the thaw. Water needs to be shut off (at the street) to minimize the water damage that will ensue from burst pipes. – JimmyJames Jan 09 '17 at 17:48
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    @Red I was one of the upvoters of keshlam's comment, but after thinking about it some more, I realize you are just attempting to help someone you care about and that's noble. My upvote was in reaction to your disgust with the situation, but your opinions are perfectly understandable. Unfortunately, I can't un-upvote it now. Welcome to the site! I hope this helped you and that you don't leave feeling like we were ganging up on you. – Zach Mierzejewski Jan 09 '17 at 19:02
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    @Red - can you answer the questions at the beginning of this answer? What names are on the title, and what names are on the mortgage? Is there any equity in the house? The answers to these questions are important to figure out what options your bf has. – TTT Jan 09 '17 at 21:01
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Rent the property?? Is that a possible solution? Since selling the house is not an option and living in it isn't either, then perhaps renting it is the way to go? Since no explanation for the sister's motives is given, i'd speculate it is a mixture of emotional and financial concerns. Maybe mostly emotional. I imagine letting go of the one physical thing that has memories of you and your parents attached to it is very difficult. I don't think getting a lawyer or doing what's convenient for only your boyfriend is the way to go...But that's my own personal opinion. Clearly, he only has one close family member left alive. Creating permanent wounds in that relationship will cost more along the way. And quite frankly, if the house is owned 50-50, don't you need both owners to sign the deed to sell the house anyways?

If renting is not an option, then maybe refinancing the mortgage to lower payments? Or Airbnb it only half the time? Or rent it out for events to help with payments? Or ask the sister for a little money...Not for half the mortgage, but at least a few hundred dollars to maintain the house and heat. If she is indeed concerned with the property, then maintaining it to prevent serious damagae is in her interests, no matter her income.

user52153
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Time for a lawyer. Essentially, regardless of the situation "it's not right" for him to be paying the mortgage and only get half the value out of the equity in the house. All other things aside, no court I can think of would allow that. The "could happens" are many, but the most common include;

  • He ends up owning the property outright
  • She ends up owing him half the value of the property
  • They sell the property and split the "profit"
  • One of them buys out the other, then does whatever.

Keep in mind that if he keeps paying the mortgage ling enough most courts will end up giving him ownership outright. Essentially, they will say he has already bought her out by paying her half of the debt.

Unfortunately, any way he goes he is going to need to take action. When there is a missed mortgage payment, a bad tax year, or some other legal issue (some one is injured on the property), the last thing he is going to want is for the courts to decide the issue for him. For example, John breaks an arm while climbing a tree on the property line. John takes the owners of the property to court. "He" says "but my sister owns half" and the courts decide then and there that because he's been paying the mortgage alone he owns the house alone. Seems like a win, except now he owns the liability alone, and owns John $1,000,000 for a silly lawsuit alone.

Point is this. Ownership of property comes with risks and responsibilities. "He" really needs to get those risks and responsibilities under control so he can mitigate them, or he could end up in a very nasty situation in the years to come.

coteyr
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He doesn't have to follow through on this, but he could tell this sister that he will stop making mortgage payments, which will result in foreclosure and sale at lower price than might be realized by a voluntary sale.

Translation: the house will sold, sis. Do you want to maximize your share of the proceeds?

And, as I said in a comment above:

I hope that he is keeping careful records of mortgage an utility payments, as he might (should) be entitled to a refund from the proceeds of an eventual sale (possibly adjusted by the fair rent value of the time which he spent living there)

Mawg says reinstate Monica
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Dear "benevolent" sister,

The mortgage, utilities, and taxes for this home can no longer be paid and the bank will repossess it within the coming months.

Thank you for your time

MonkeyZeus
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Firstoff, he has a house

That ain't nothing. It's really easy to get "whipped up" into a sense of entitlement, and forget to be grateful for what you do have.

If this house doesn't exist, what would his costs of housing be elsewhere? Realistically. Would landlords rent to him? Would other bankers lend him money to buy a house? Would those costs really be any better? What about the intangible benefits like not having any landlord hassles or having a good relationship with the neighbors? It's entirely possible he has a sweet deal here, and just doesn't make enough money.

If your credit rating is poor, your housing options really suck. Banks won't lend you money for a house unless you have a huge ton of upfront cash. Most landlords won't rent to you at all, because they are going to automated scoring systems to avoid accusations of racism.

Revenue opportunities

In this day and age, there are lots of ways to make money with a property you own. In fact, I believe very firmly in Robert Allen's doctrine: Never sell. That way you avoid the tens of thousands of dollars of overhead costs you bear with every sale. That's pure profit gone up in smoke. Keep the property forever, keep it working for you. If he doesn't know how, learn.

To "get bootstrapped" he can put it up on AirBnB or other services. Or do "housemate shares". When your house is not show-condition, just be very honest and relatable about the condition. Don't oversell it, tell them exactly what they're going to get. People like honesty in the social sharing economy.

And here's the important part: Don't booze away the new income, invest it back into the property to make it a better money-maker - better at AirBnB, better at housemate shares, better as a month-to-month renter. So it's too big - Is there a way to subdivide the unit to make it a better renter or AirBnB? Can he carve out an "in-law unit" that would be a good size for him alone?

If he can keep turning the money back into the property like that, he could do alright. This is what the new sharing economy is all about.

Of course, sister might show up with her hand out, wanting half the revenue since it's half her house. Tell her hell no, this pays the mortgage and you don't! She deserves nothing, yet is getting half the equity from those mortgage payments, and that's enough, doggone it! And if she wants to go to court, get a judge to tell her that.

Is there any cash value in the house?

Not that he's going to sell it, but it's a huge deal. He needs to know how much of his payments on the house are turning into real equity that belongs to him.

"Owning it on paper" doesn't mean you own it. There's a mortgage on it, which means you don't own all of it. The amount you own is the value of the house minus the mortgage owed. This is called your equity.

Of course a sale also MINUS the costs of bringing the house up to mandatory code requirements, MINUS the cost of cosmetically making the house presentable. But when you actually sell, there's also the 6% Realtors' commission and other closing costs.

There's such a thing as an "upside-down house"

This is where the mortgage is more than the house is worth. This is a dangerous situation. If you keep the house and keep paying the mortgage all right, that is stable, and can be cheaper than the intense disruption and credit-rating shock of a foreclosure or short sale.

If sister is half owner, she'll get a credit burn also. That may be why she doesn't want to sell. And that is leverage he has over her.

Liquidating the estate was done correctly, right?

I imagine a "Winter's bone" (great movie) situation where the family is hanging on by a thread and hasn't told the bank the parents died. That could get very complex especially if the brother/sister are not creditworthy, because that means the bank would simply call the loan and force a sale. The upside is this won't result in a credit-rating burn or bankruptcy for the children, because they are not owners of the house and children do not inherit parents' debt.

Harper - Reinstate Monica
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