Part Owner Of House Rights

rhiansian123

My father passed away in 2010. As him and my mother were divorced at this time, his 50% share of the property (no mortgage) was divided equally through probate, between my 3 siblings and I (12.5% share each).
My brother wanted to cash in his share immediately, so my mother bought him out and now owns 62.5% of the property. My 2 sisters and I told our mother that we wouldn’t do that to her and we would retain our shares, whilst she lived in the property for as long as she wanted to.
We signed a contract stating this too, and the only standard clause in the contract was that it was my mother’s responsibility to keep the house in a good state of repair. It also stated that our share would be paid to us when the house is sold.
My mother told us recently that she is thinking about moving in with her sister and renting the house out, and keeping the income from that.
My questions are: can she do that without our consent? Also, surely we should get 12.5% each of this monthly rent?
I feel like my mother wants everything her own way by suggesting this, because last year, she said she was thinking about selling the house and buying a new property, until my sister reminded her about the clause saying that we would get paid our share in the event of the house being sold....

AdrianC

Yes, you should get 12.5% of any profits from the rental business. That will be less than 12.5% of rent. As for "can she", you are - between you - minority owners. If it came to a vote between the four of you on what to do, she can outvote you 5-3.



That apart, all the usual questions apply that would apply to anybody else thinking of getting into residential letting. Does it make financial sense? Do they actually understand the business they're starting, and their legal obligations?

da_rule

It would depend on the exact wording of the agreement. If the wording is such that your mother is entitled to the full beneficial ownership of the property then she can keep the entire rental income.

You are your sisters can try and force a sale but this is a costly and somewhat nuclear option.

Has anyone actually just pointed out to her that you’d want the share of the rent? Also, are you sure you want a share of the rent and also therefore the liabilities that come with being a landlord in exchange for 12.5%? It might be better to let her be the landlord and get her to indemnify you against loss you may suffer as a result of the property being rented in exchange for her keeping all of the income.

rhiansian123

Thanks very much for your reply.
The rental issue is something I will need to look into, and take into account the points you raised. It sounds like a mine field though!!!

rhiansian123

@da_rule I don’t recall the wording mentioning full beneficial ownership of the property. I think the best thing to do, would be to request a copy of the contract, to be 100% sure of everything contained in that contract.
No, we haven’t discussed this in depth with her yet, only because we wanted to find out our rights first.
You raise a very good point though, about her being the sole landlord. I agree with you about whether it is worth all the hassle for less than 12.5% after tax deductions!

AdrianC

rhiansian123 wrote: »

I agree with you about whether it is worth all the hassle for less than 12.5% after tax deductions!

Never mind tax, there's a strong argument that while maintenance costs should be hers alone while she's resident, if the property becomes let and the income from that let are split between all owners, then the costs should also be split - so it'd be 12.5% less maintenance less tax actually going into your pocket.

rhiansian123

Yeah I think I will look into the being indemnified against any losses suggestion, to be honest.
Thanks again for all your help.

[Deleted User]

But is 12.5% going to be worth chasing your mother, (who paid all your expenses for many years), for?

MobileSaver

deannatrois wrote: »

But is 12.5% going to be worth chasing your mother for?

12.5% may not be worth it but the 37.5% for the three siblings may cause the mother to rethink whether it's worth the hassle for her; which may encourage her to sell after all...

AdrianC

MobileSaver wrote: »

12.5% may not be worth it but the 37.5% for the three siblings may cause the mother to rethink whether it's worth the hassle for her; which may encourage her to sell after all...

If one sibling decides they don't need the hassle for 12.5%, then that's 75-25. If two decide, then it's 87.5-12.5

rhiansian123

deannatrois wrote: »

But is 12.5% going to be worth chasing your mother, (who paid all your expenses for many years), for?

Wow! Judgy much?! No she didn’t, actually!