Property Left To Siblings

icuqt

Okay, here's the problem in brief:
My father died in November, leaving his half of the house to my sister and I ie 25% each. My mother then died in May, leaving her share in the house to us as well; my sister and I both now with a 50% share in the property.
We put the property up for sale at £30k above the Probate value to test the market. We've only had it on the market for a few days and someone has put in an offer for our full asking price.... the catch being that the person wants to to turn the property into a children's nursery.
My sister's garden actually backs onto my parents old property and she has now said she doesn't want to sell the property to the nursery people. She is now saying she wants to add a Covenant to the deeds saying that the property cannot be operated as a business to prevent the property becoming a nursery etc.
How do I tackle this whilst still trying to maintain the relationship with my sister ?
From a financial perspective, it could end up that I'm saying goodbye to a potential £15k off the price of the property so my sister can "choose" her neighbours.

DandelionPatrol

It takes all the sellers to impose a covenant, so the acid test is whether she would be prepared to match the Nursery offer - ie give you an IOU for half their offer for control of the property and the right to impose a covenant. She can then sell the property with her covenant in place and redeem the IOU, taking whatever loss on the property.

Suppose the property is valued at 200 and the nursery are offering 230. And suppose it sells for 200 with the covenant. You still get 115, but she only gets 85. She is down by 15 against valuation and by 30 against the nursery offer. Which is fair - she should bear all the losses arising from the covenant.

I can see her being upset at this, but in your position, I would be thinking that with the money, she might move anyway, so what was the point of her and you taking a loss? [edited to add: looking at it this way she would be up by 30 if she took the nursery offer, which would probably pay her to move]

If you go down the road of her buying the right to make a covenant, you will probably need legal advice to tie up the actual implementation of the deal.

BTW, who are the executors or administrators of the estate? Is the property still in the estate? This might make things easier.

Savvy_Sue

It would be worth your sister taking some legal advice about this. It's one thing to put a covenant on, another to enforce it. And some of them just aren't enforceable.

Another thing to consider is that you can't just turn a residential property into business premises, you need planning permission. Maybe the nursery already have a fair idea whether or not they'd get planning permission, another business might not.

whitewing

Perhaps it is less the nursery and more the grief/anger of letting go of the house/your parents.

I think you should gently persist with the sale.

icuqt

Hi Dandelionpatrol,
my sister and I are the Executors in the Will and are in the final stages of Probate. We went and swore the Oath yesterday so today will be sending in the paperwork. We did the Probate ourselves.
Many thanks

Keep_pedalling

You might be better off posting this question on the house buying / selling forum, there may be more expertise in the pros and cons of covenants there.

nom_de_plume

icuqt wrote: »

We've only had it on the market for a few days and someone has put in an offer for our full asking price....

What's the property market like in your area?

Currently, where I live, estate agents will not even put potential buyers forward for viewings unless they have an agreement in principle for a mortgage, such is the ratio of buyers to sellers.

If it's anything similar where you are there should be no problem finding an alternate buyer at the full asking price.

A quick call to the estate agent should confirm.

SeniorSam

That higher selling price may only be available to someone like the interested part for a new bsiness. If planning permissionis not allowed, then you will have no buyer after waiting a long time for the permision, because they would not agree to complet unless they get permission.

Suggest you consider other offers before getting your hopes up and into a dificult position with your sister, other than to mention that if she withdraws once permiossion is granted, then yo will be out of pocket, as the agents will want paying. Better solution is for her to buy your half as suggested buy othes, She then can be in control.

DandelionPatrol

icuqt wrote: »

Hi Dandelionpatrol,
my sister and I are the Executors in the Will and are in the final stages of Probate. We went and swore the Oath yesterday so today will be sending in the paperwork. We did the Probate ourselves.
Many thanks

I believe that as executor, your sister [and you] have responsibilities to maximize the estate - so you have a certain amount of leverage to get your sister either to accept the current offer or to make up the difference if the offer is rejected in favour of a lower offer.

icuqt

I'm not 100% sure but don't think the property in the area is shifting that well at the moment. It's in an area just north of Blackpool so the property prices are well below the national average. We've put the house up for sale with a fixed fee estate agent. All the people we've had so far have been chain free and most have been cash buyers.

getmore4less

DandelionPatrol wrote: »

I believe that as executor, your sister [and you] have responsibilities to maximize the estate - so you have a certain amount of leverage to get your sister either to accept the current offer or to make up the difference if the offer is rejected in favour of a lower offer.

Makes no difference as the only people that can take action are the benificiaries which are themselves.