Multiple Tenants in Common, unequal shared, renovation and building costs

r0wly86

Hi all,
Got quite a mess of situation and could do with some advice.
My wife's mother-in-law's house is owned in tenants-in-common, my wife owns 5%, mother-in-law 60%, aunt 30%, cousin 5% on trust; mother in law is the trustee. The aunt and cousin both live in the house.

We are planning on moving in, buying the majority of the mother-in-law's share, at the same time as investing a lot into the property. 2 storey side extension, loft conversion, and complete renovation rewire, replumb, new kitchen, bathrooms the whole shebang. We are going to be investing close to £200,000. It is mainly for our own benefit, we are expecting out first child and we want a proper family home, also mother-in-law's mobility is not great so we are converting part of the ground floor as a living space for her.

The aunt, is refusing to put any money into the renovation, even though she does have the cash available. She will obviously benefit from a larger house, bigger bedroom and a house that is from this century rather than the current one which is not in the best of shape. What we are worried about is the aunt gaining financially from the situation, the value of the house should be greater than our investment alone. But if she is not putting in any money, then we are holding the risk of our investment yet she will gain.


We wold be happy to honour 30% of the current value plus market increase if she ends up wanting to sell, but don't know how we can legally bind this. All complicated further that my wife does not get on particularly well with the aunt and would like her to leave anyway.

Thanks in advance for any help 

[Deleted User]

I'm not even sure why you are contemplating this.  The aunt and the cousin (I'm guessing the aunt's child) get to live in the property by themselves at the money, even if it could do with a lot of TLC.  You're proposing moving 3, 4 if you count your baby, new people into their home.  The aunt and cousin will become outnumbered and by someone who doesn't even like her so I can see why she's not over the moon at the prospect even if it does mean getting a new kitchen.

Do you have to buy this house for your family?  Could you not buy somewhere else to live as you seem to have plenty of money to use as a deposit?

Out of curiosity, how did this slightly unusual ownership come up in the first place?

Tom99

If the aunt does not want to contribute to your plans, which are for your benefit, nor change the 30% she owns in her home to some other formula, to suit you, then that's is her choice. 

r0wly86

Lover_of_Lycra said:

I'm not even sure why you are contemplating this.  The aunt and the cousin (I'm guessing the aunt's child) get to live in the property by themselves at the money, even if it could do with a lot of TLC.  You're proposing moving 3, 4 if you count your baby, new people into their home.  The aunt and cousin will become outnumbered and by someone who doesn't even like her so I can see why she's not over the moon at the prospect even if it does mean getting a new kitchen.

Do you have to buy this house for your family?  Could you not buy somewhere else to live as you seem to have plenty of money to use as a deposit?

Out of curiosity, how did this slightly unusual ownership come up in the first place?

frankly we cannot afford to buy in the area unfortunately, and we want to be nearby the mother in law who will not even contemplate moving.

my in laws were refugees Vietnam war, came to UK, were given a council house. They used right to buy to purchase it. Then father-in-law's sister came over (post war) afraid that she would be kicked out, FIL, probably using undue influence, forced my MIL to allow her onto the deed, it was split 25/25/25/25 between MIL, FIL, BIL, and aunt. FIL then died and left his 25% in 5% shares to MIL (30), BIL (30), wife (5), cousin (5), and aunt (30). brother in law then dies without a will and so it all goes to MIL, to where we are now.

Cousin is 17 soon and will be going to uni in 18 months, my wife and the cousin have a very good relationship. 

The aunt has talked about selling her share to us in the future, but obviously we don't want to be liable for 30% of the increased value. I believe with a child, which we will have, the courts will not force a sale, so we have some protection. I just wondered if we could get a declaration of trust to protect our investment. But don't know how that works in reality

r0wly86

Tom99 said:

If the aunt does not want to contribute to your plans, which are for your benefit, nor change the 30% she owns in her home to some other formula, to suit you, then that's is her choice.  

I know it is her choice, and I'm not trying to force her to put money in. But it doesn't sounds equitable that a tenant in common earns wealth from investment in the property without putting into that investment. She will also benefit, the building plans will make the house more insulated, reducing bills, we are putting in better boilers etc, of which she pays 1/3. The house is in desperate need of rewiring as a safety measure as well

Linton

I am not a lawyer but: as you describe the situation ISTM aunt owns 30% of the house and therefore is due 30% of the proceeds of a sale.  There is nothing you can do to change that if she does not want to cooperate. Do you have your aunt's agreement to your plans?

My first reaction is that you should forget the whole idea and simply buy your own home elsewhere and let the rest of them sort out the mess. Your wife's 5% is pretty irrelevent. Having several TICs where each "tenant" has their own agenda is a recipe for chaos, estrangement, and high legal costs.  Do you really want your family to live together with someone your wife does not get on with?  One can foresee a lifetime of daily bickering.

My second reaction is that you can only make your plan work with the full support of all the house's owners.  Your therefore need to get the aunt to agree a settlement because she sees it as being in her best interests, rather than try to force her to do something she doesnt want to.  At the same time get your wife and the aunt to forget their past differences and become best friends.

r0wly86

I should add that the relationship with the aunt, while not great is not a deal breaker. She keeps herself to herself and often stays in her room. Whereas this opportunity could allow, my wife and I and young child a chance to own and live in a substantial family home with a very small mortgage.

So while I get why it would look very strange from the outside we could be in a position of owning £750-800,000 house, at the age of 33 with mortgage repayments of £200pcm. 

We just want to protect our investment as much as possible, in the future we will look to buy the aunt out, once her child has left home, I think she will look to sell

[Deleted User]

The courts will force the sale child or not if one of the joint owners has to take things that far. 

[Deleted User]

Hang on a minute, mortgage? Is that going to the source of your £200k? 

r0wly86

Linton said:

I am not a lawyer but: as you describe the situation ISTM aunt owns 30% of the house and therefore is due 30% of the proceeds of a sale.  There is nothing you can do to change that if she does not want to cooperate. Do you have your aunt's agreement to your plans?

My first reaction is that you should forget the whole idea and simply buy your own home elsewhere and let the rest of them sort out the mess. Your wife's 5% is pretty irrelevent. Having several TICs where each "tenant" has their own agenda is a recipe for chaos, estrangement, and high legal costs.  Do you really want your family to live together with someone your wife does not get on with?  One can foresee a lifetime of daily bickering.

My second reaction is that you can only make your plan work with the full support of all the house's owners.  Your therefore need to get the aunt to agree a settlement because she sees it as being in her best interests, rather than try to force her to do something she doesnt want to.  At the same time get your wife and the aunt to forget their past differences and become best friends.

We will be buying the majority of the MIL's shares in the house, so essentially my wife and I will own 60% MIL 5% and so on and so forth.

The aunt is fine with us doing the building works, signed the planning application giving her landowner consent. Just doesn't want to contribute to the costs.

Which as I have said is fine, we can afford to do the build

r0wly86

Lover_of_Lycra said:

The courts will force the sale child or not if one of the joint owners has to take things that far. 

that is different from the advice on the internet, they seem to be saying that the courts do not like to force a sale if there is a dependent in the house, especially if the house was bought with the intention of raising children, which this one was. If they do allow a fore of sale it is often delayed until the child becomes 18. Which for the aunt would take her into her 80s