Advice needed on buying brothers out 31 December 2012 at 5:44PM in House buying, renting & selling 5 replies 728 views

Paulascd

Hi,

My father recently passed away. When my mother died she left a sixth of the house each to me and my two brothers. Now my dad has died he has given us a sixth again so now we each have a third of the house. The house has been valued at £650k. I currently own two other houses that are worth £275k and £90k. One of them has a mortgage of around £50k, whilst the other one does not. I would like to buy out my brothers but they wish to sell the house now and so some arguments have developed. Currently, we each have a third of the house worth basically £217k. As it stands I am able to buy out one of them out easily. Am I able to buy just one of them out to give me majority share in the house, in order to stop the other brother from selling it, or is he still able to do as he pleases. Is it even possible to just buy out the one or do I have buy them both out?

I have slightly rushed this post so I am bound to have missed some things, so if any more info is needed then please just ask. Many thanks for any help/suggestions, they are much appreciated.

Bluebonnie

What stage has father's estate got to: has probate been granted? who are his executors?

Has the whole house now been transferred into the names of the three of you?

Jeffrey_Shaw

1. Who owned the house: father + mother jointly?
2. If they owned the LEGAL ESTATE jointly, there are two quite different methods. These are both concerning the EQUITABLE ESTATE (= who has the benefit of the property). They are:
a. 'beneficial joint tenants'; and
b. 'beneficial tenants in common'.
3. IF BJT: your mother's death meant that your father became the sole owner legally and beneficially.
4. IF TIC, your mother's death meant that your father became the sole owner legally but not beneficially; your mother's share (maybe 50%, maybe not) passed under her Will (in one-sixth shares).
5. Another factor is the existence or non-existence of a Trust Deed (or a clause in mother or father's Wills) re in what circumstances anyone can force a sale.
6. As you'll see, this is a very complex position- sorry. You need detailed legal advice, not anonymous posts on a website (even one as good as MSE!)

getmore4less

The devil will be in the detail.

What stage is the estate, have the shares been transfered or is the buyout to happen as part of the estate.

On the first death did you inherit the shares or were they put into trust.
if trust who are the trustees

You really should buy out both and being a major share holder does not give you any special powers a forses sale could get expensive.

Has the IHT been paid on the estate if not that could complicate

G_M

All the above points are pertinant (trusts? probate? ownership? Inheritance Tax? etc etc).

But frankly, irrelevant.

This should not be, or become, a legal argument. It's family. Reach an agreement.

If your brothers both want to sell (perhaps keeping the property in the family is too emotional for them? perhaps they need the money more than you do?...), then the three of you should sell the house.

In that case, the only question is whether you (currently) have enough cash (or mortgage potential) to buy it in competition with the open market.

But if you insist on a fight, then as suggested above, get legal advice (and watch the money trickle away into solicitors' pockets, and the family break up).

ValHaller

I take it you would liquidate your current property portfolio to buy the brothers out. In which case you need to raise a mortgage of about £120k on top to buy them both out.

Jeffrey Shaw seems to have his finger on the relevant issues which will determine what might or should happen, but unless there is something in place granting any of the siblings a lifetime interest or dictating the circumstances for a sale, a good working assumption is that a sale can be forced, by the courts if necessary. You should consent to a sale before letting it go to court.

As for buying out one brother, this will leave the remaining minority holding brother in a strong position to force a sale - you would do better to buy off (rather than buy out) one brother leaving him still holding his share - and leave the argument as 2 minority holders against the other minority holder - putting the remaining brother in a psychologically weaker position to muster himself to take you to court. Expect the bought off brother to wilt if it does go to court.

In essence, it would be a really bad idea to go down the road of playing with either buying out or buying off and I hope if you think about how it might play out you will see how it could colour family relations right to the grave.