Property with sibling

Skag

I own a BTL property with my sibling. He is abroad in another country and I have to manage the property on his behalf. We own it outright. Our parents bought us the property but now I want to either keep it completely or sell it to my sibling. I know for fact that he doesn't have the money to buy it, and I am afraid that he will refuse to sell it as well because he's unable to come to the UK every now and then and look after it. He could get a lettings agency, but again, he can't afford to buy it (I can buy his share). My problem is that I have to deal with all the maintenance of the property, year on year, and he collects 50% of the rent as per the ownership. So basically I want to clear things up.
What do we do in this occasion? Does the case have to go to court?

G_M

I am afraid that he will refuse to sell it as well because he's unable to come to the UK

Why does that stop him selling??

Why are you not deducting your costs and expenses, including time, from the rent before splitting it 50/50?

If you had to spend £2000 on a new boiler, would you still give him 50% of the rent and pay for boiler from your 50%?

The main issue seems to be the management arrangement which you need to get on a proper footing - and as I assume the rent is being paid to you, and he is overseas, you hold all the cards in this respect. Just write formally to him and tell him what you propose to do.


Or pay a professional agent to manage everything properly.


Some issues to highlight, just in case:

* are you deducting his 20% income tax from his rent and paying HMRC, or have HMRC agreed in writing that he can receive 100% of his rent? (see HMRC as you are acting as his agent and receiving the rent I assume)

* have the tenants been given an address (yours?) in writing 'for serving notices'?

* have they had EPC, GSR, Gov leaflet etc? and did you check their residency rights?

I only ask because you appear to be winging it somewhat in some respects, so may be winging it elsewhere too!
See

* New landlords: advice, information & links

Having said all that, forcing him to sell agaainst his will would be hard and expensive via the courts, but it sounds like buying him out or selling are the best options. Disputes between joint owners can only get worse.


Offer to pay him extra in return for his agreement?

Skag

If you had to spend £2000 on a new boiler, would you still give him 50% of the rent and pay for boiler from your 50%?

No.

Why does that stop him selling??

What I meant as that it's hard for him to do any sort of maintenance since he's abroad with his family.

Thanks for the highlights, everything is sorted with regards to the rental aspect, that's not the issue. However it is an issue when it comes to the sibling's involvement, as I have taken care of everything without his direct involvement, we just communicated normally and I conveyed my actions every now and then, e.g. changing the boiler etc. So basically to your point, I invest my time (from visiting the property, to arranging maintenance etc), but at the end the rent is 50-50. At the end of the day, I'd like to keep our things separate.

Why are you not deducting your costs and expenses, including time, from the rent before splitting it 50/50?

Maybe a good solution (although that still keeps us both locked in the property) would be to keep an extra say 10% for my time regarding maintenance.

G_M

So your only issue is that you resent spending time on management whilst he spends no time?

Otherwise financially you are happy with the way costs and rent are shared yes?

So there's no problem! Either hand over the management to a letting agent, freeing up your own time, or start charging the business for your own time out of the income.

Sorted.

I note you ignored the tax question - have HMRC written to you to tell you that you may pay rent to your sibling without deducting tax? If not, are you deducting the 20%?

The Scheme requires anyone in the UK who pays rent to, or collects rent for, a non-resident landlord to deduct basic rate tax from the rent. The people it mostly affects are letting agents, which can be anyone from a professional letting company to a friend or relative appointed by the non-resident landlord.

If not, HMRC can come after you for non-payment of your sibling's tax.

xylophone

Why won't the sibling sell his half to you?

Skag

I suppose it's going to have to be a question of who is going to collect the extra rent, me or the letting agent; I haven't thought of it from this side, that's why I like these forums

I note you ignored the tax question - have HMRC written to you to tell you that you may pay rent to your sibling without deducting tax? If not, are you deducting the 20%?

I didn't ignore the question, I said that with regards to your highlights "everything is sorted".

We have used this form.

Skag

xylophone wrote: »

Why won't the sibling sell his half to you?

The sibling is not interested in selling as he's comfortable with collecting the rent and owning a property (half).

csgohan4

Skag wrote: »

The sibling is not interested in selling as he's comfortable with collecting the rent and owning a property (half).

Perhaps the sibling should be expecting management fees as the rent and management of the property doesn't do itself

Worse case scenario force a sale although will be expensive

00ec25

Skag wrote: »

I own a BTL property with my sibling. He is abroad in another country and I have to manage the property on his behalf. We own it outright. Our parents bought us the property but now I want to either keep it completely or sell it to my sibling. I know for fact that he doesn't have the money to buy it, and I am afraid that he will refuse to sell it as well because he's unable to come to the UK every now and then and look after it. He could get a lettings agency, but again, he can't afford to buy it (I can buy his share). My problem is that I have to deal with all the maintenance of the property, year on year, and he collects 50% of the rent as per the ownership. So basically I want to clear things up.
What do we do in this occasion? Does the case have to go to court?

why do you need help from a forum with a domestic dispute with your brother?

you want to sell, he does not. Your options:
1. if your parents are still alive, get them to take sides and force the issue
or
2. keep at him till he does what you want. Patently that should include properly accounting for the share of costs, not just the share of income.
or
3. pay a lot of legal fees to force a sale through the court

but you already knew that...

csgohan4

sadly it's another thread where money and family shouldn't mix, another one added to my list

getmore4less

How low would the brothers income need to go to make the idea of a cash lump more attractive?

There is going to be some you can redirect to yourself/agent to cover management.

Any maintenance projects that could be brought forward or need to be saved for that could eat some more income.

Any sign that the current tenants might move on, a void period might trigger options.