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Shared Property with Sibling Problem
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slayerofangels
Posts: 5 Forumite
OK here it goes, sorry if it's a long one:
During my teenage years my sister and I inherited a house from a distant relation. As we were under the age of 18, my mother arranged for the sale of the house and with the funds, purchased another one that was let out to tenants. Me and my sister are both listed as the landlords, and each month receive half of the income each. Through the entire process of this business agreement being arranged, my mother did not keep us informed on what was going on - if I asked about the inheritance she would get very angry and accusatory. At the time I figured it was because I was a teenager and she was worried I was just interested in spending all the money. However, as an adult this behaviour has continued.
Whilst we were both away at university, my mother managed the property on our behalf, letting us know when there were things that needed to be paid for (electrical safety certificates, various works etc.) which would be paid for by my sister and I. Although I acknowledge that I am very lucky to have the benefit of a property and the extra income it provided for me as a student, the financial liability of paying for property works was an added stress during my time at university. The £200 extra a month I received from the tenancy never seemed to be enough to pay for all the works a house needs, and although I had a part-time job to support my studies I was constantly living under the fear that something would go wrong with the house (a boiler breaking, leak etc.) where I would suddenly need to fork out thousands - money I just did not have.
When I left university and went into my first job I soon discovered that my mother had failed to report the earnings me and my sister had procured from the house to HMRC for 5 years. This was a very stressful time in my life - I had just started working and was facing a possible prosecution, thousands in late filing fines etc. I spent months scouring through years of files and letters to get me and my sisters affairs in order through an accountant that I hired. In the end I did get it sorted and managed to get the money together to pay it all off, however it took a huge toll on my mental health. I know it is easy to say I was naive and shouldn't have left the responsibility all to another person but you have to understand - I was young, I had been kept in the dark for a lot of the house buying process, and I trusted my mother, who has managed other properties as a landlord for years prior.
After the HMRC debacle, I took the management of the property off my mother and have been doing it for the past four years. I feel that I am a good landlord - my tenants have expressed positive feedback on how quickly I get problems sorted, and of course my HMRC filings are never late or unpaid. However, I have severe anxiety, and having to manage this property from a young age has contributed to exacerbating these issues. Even after years of therapy and various medications, I still have nightmares about something going wrong with the house. This year I lost my job due to COVID, and was panicking more about the house than my own loss if income. Despite my years of experience in my current career path I have had to settle for a much less-paying job just to get me though this pandemic, so ironically am on less money than my own tenants even though they are paying me rent!
What's more, my family are not helping the situation. Despite being a co-owner and receiving half of the rental income, my sister has done very little over the years to help me manage this property or sort out the issues with HMRC. What's more, she is currently living at home with my parents and does not pay rent, bills or for food, so can't seem to understand my own situation. A conversation I had with my mother where I mentioned that I often found it difficult to cope and wanted to sell up in the next few years ended with her screaming at me, saying I was ridiculous and don't understand the privilege that I have. My mother has always taken my sisters side in everything and as my sister does not want to sell, I feel stuck in this business arrangement that I never asked or wanted to be a part of. She also mentioned that if I was struggling so much that I should just sign the property over to her and she would give it back to me once she had died.
I feel so trapped. I don't even care about the income from the tenancy any more - I would happily sell tomorrow if I could and just let the money sit in a bank account. However, just for voicing my proposal to sell in a few years has turned my whole family against me. They are accusing me of pressuring my sister to sell (which I have never done) and saying that I am selfish. All I want is for this nightmare to end - I am done having emotional breakdowns and time off work and am worried about the impact this stress is having on my health.
Please let me know if you have any advice or have been in similar situations before. I think it would just be a comfort to know there are others out there is a similar situation...
During my teenage years my sister and I inherited a house from a distant relation. As we were under the age of 18, my mother arranged for the sale of the house and with the funds, purchased another one that was let out to tenants. Me and my sister are both listed as the landlords, and each month receive half of the income each. Through the entire process of this business agreement being arranged, my mother did not keep us informed on what was going on - if I asked about the inheritance she would get very angry and accusatory. At the time I figured it was because I was a teenager and she was worried I was just interested in spending all the money. However, as an adult this behaviour has continued.
Whilst we were both away at university, my mother managed the property on our behalf, letting us know when there were things that needed to be paid for (electrical safety certificates, various works etc.) which would be paid for by my sister and I. Although I acknowledge that I am very lucky to have the benefit of a property and the extra income it provided for me as a student, the financial liability of paying for property works was an added stress during my time at university. The £200 extra a month I received from the tenancy never seemed to be enough to pay for all the works a house needs, and although I had a part-time job to support my studies I was constantly living under the fear that something would go wrong with the house (a boiler breaking, leak etc.) where I would suddenly need to fork out thousands - money I just did not have.
When I left university and went into my first job I soon discovered that my mother had failed to report the earnings me and my sister had procured from the house to HMRC for 5 years. This was a very stressful time in my life - I had just started working and was facing a possible prosecution, thousands in late filing fines etc. I spent months scouring through years of files and letters to get me and my sisters affairs in order through an accountant that I hired. In the end I did get it sorted and managed to get the money together to pay it all off, however it took a huge toll on my mental health. I know it is easy to say I was naive and shouldn't have left the responsibility all to another person but you have to understand - I was young, I had been kept in the dark for a lot of the house buying process, and I trusted my mother, who has managed other properties as a landlord for years prior.
After the HMRC debacle, I took the management of the property off my mother and have been doing it for the past four years. I feel that I am a good landlord - my tenants have expressed positive feedback on how quickly I get problems sorted, and of course my HMRC filings are never late or unpaid. However, I have severe anxiety, and having to manage this property from a young age has contributed to exacerbating these issues. Even after years of therapy and various medications, I still have nightmares about something going wrong with the house. This year I lost my job due to COVID, and was panicking more about the house than my own loss if income. Despite my years of experience in my current career path I have had to settle for a much less-paying job just to get me though this pandemic, so ironically am on less money than my own tenants even though they are paying me rent!
What's more, my family are not helping the situation. Despite being a co-owner and receiving half of the rental income, my sister has done very little over the years to help me manage this property or sort out the issues with HMRC. What's more, she is currently living at home with my parents and does not pay rent, bills or for food, so can't seem to understand my own situation. A conversation I had with my mother where I mentioned that I often found it difficult to cope and wanted to sell up in the next few years ended with her screaming at me, saying I was ridiculous and don't understand the privilege that I have. My mother has always taken my sisters side in everything and as my sister does not want to sell, I feel stuck in this business arrangement that I never asked or wanted to be a part of. She also mentioned that if I was struggling so much that I should just sign the property over to her and she would give it back to me once she had died.
I feel so trapped. I don't even care about the income from the tenancy any more - I would happily sell tomorrow if I could and just let the money sit in a bank account. However, just for voicing my proposal to sell in a few years has turned my whole family against me. They are accusing me of pressuring my sister to sell (which I have never done) and saying that I am selfish. All I want is for this nightmare to end - I am done having emotional breakdowns and time off work and am worried about the impact this stress is having on my health.
Please let me know if you have any advice or have been in similar situations before. I think it would just be a comfort to know there are others out there is a similar situation...
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Comments
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That's the one thing I would most definitely NOT do, unless you absolutely want to be rid of it. You'd have no guarantee that she'd put that provision in her will.slayerofangels said:She also mentioned that if I was struggling so much that I should just sign the property over to her and she would give it back to me once she had died.
However, you could appoint her as your agent in managing the property, but retain more interest in what's going on than you were able to do when you were younger. It might mean you taking less than half the rent, but I'm willing to bet that by the time you've dealt with repairs and problems, even an equal financial split with your sister is worth less to you because of the hassle and worry it's involved you in.
Another possibility - and I don't know the dynamics here - is to see if your sister would like to become more involved in managing the property. If you don't enjoy a reasonable relationship with her, then this is a bargepole (do not touch with a) situation, but if you do generally get on well then it might be worth considering.
Being a legal and compliant landlord isn't an easy thing, so well done on your progress once you knew what was going on. Being a good landlord when you're constrained by your situation - even more tricky ...
By the way, if you could show your sister sound economic arguments for getting rid of the house, then that might help. But I believe you'd be facing a CGT bill, plus you won't be able to benefit from any FTB offers when you buy a property. NOT having this house would however mean less stamp duty to pay on a house purchase - this is your first property, so that would be your second ...Signature removed for peace of mind1 -
Thank you for your response and advice. The issue with your solution however, is that after all the secrecy, the HMRC problem and her suggestion of taking my inheritance off me, I just don't think I can trust my mother with this. I fear that she would sooner or later mess something up that I would have to take care of again.Savvy_Sue said:
That's the one thing I would most definitely NOT do, unless you absolutely want to be rid of it. You'd have no guarantee that she'd put that provision in her will.slayerofangels said:She also mentioned that if I was struggling so much that I should just sign the property over to her and she would give it back to me once she had died.
However, you could appoint her as your agent in managing the property, but retain more interest in what's going on than you were able to do when you were younger. It might mean you taking less than half the rent, but I'm willing to bet that by the time you've dealt with repairs and problems, even an equal financial split with your sister is worth less to you because of the hassle and worry it's involved you in.
Furthermore, although I am grateful for everything my mother has done to set up this enterprise for me and my sister, she is not someone I would ever want to go into a business partnership with (as this tenancy kind of is). She is hot tempered and can be quite a manipulative character, which is why as an adult I have learned to keep her at arms length.0 -
Why don't you offer to sell your share of the property to your sister/mum/another family member?
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Force the sale of the property - through the courts if necessary.11
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Yeah, never trust your mother with your finances again after the mess she made the first time around.
Also, it wasn't just her that failed to report the income to HMRC. It was also you - at least after the age of 18. You may have been young, but you became an adult with adult responsibilities, like all of us. Sorry to be blunt, I'm sure you realise this and I certainly don't criticise you for making mistakes (that we all do to some degree). But I don't think you need it sugar-coated; you were resourceful enough to manage your way through it and that's commendable.
Owning and managing a rental property, and completing annual tax returns, is certainly annoying but clearly you find it more mentally stressful than it 'should' be. That's understandable given your experiences. It's also entirely understandable that you may not feel you want to be a landlord. Why would you, if it's causing you this much grief?
So sell it. Your share of the property is your asset, not an asset of your family. So do what's right for you.
If your family think that being a landlord is an immense privilege which should never be relinquished (which is a pretty stupid attitude but I won't get into the many reasons why here), then they are welcome to raise the money to buy you out. Your sister doesn't lose her share or have to stop being a landlord just because you are selling.
You will need the co-operation of your sister to sell the easy way, but ultimately she cannot 'trap' you in the property forever, you could apply to court for an order for sale if necessary. But there are other low-grade ways of encouraging the decision, particularly if you are managing the property. Again, probably not necessary to get into the details on a war of attrition at this stage.
The wealth isn't just going to disappear (excluding CGT of course). Invest the proceeds someplace else - paying down your own mortgage if you have one, or using as equity to buy your own property, or put it into share ISAs and pensions, or whatever seems sensible and lower-stress than being a landlord.
If your family turn against you for making a totally normal personal decision about your finances, they aren't a great family, at least in this respect.
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I'm struggling to understand the timelines, under 18s can't own property in the UK as far as I am aware so how did you end being a landlord before you were even an adult? When was the ownership transferred into your names and how?
I agree with the poster who said sell. Whatever it takes, even if it means your family cut you off. Why would you want to stay in contact with people who don't care about your wellbeing anyway?2 -
I never said I was a landlord before the age of 18, just that I inherited a house. I can't remember when specifically the ownership was transferred or all the details regarding the process - it was over a decade ago and as stated previously, for a lot of the process I was kept in the dark.Morrigan_2020 said:I'm struggling to understand the timelines, under 18s can't own property in the UK as far as I am aware so how did you end being a landlord before you were even an adult? When was the ownership transferred into your names and how?
I do know that me and my sister are the registered house owners though - if that's what you are trying to get at - as I checked with land registry.1 -
Thanks for your response. I agree that HMRC was my responsibility, which is why I sorted it all out for both me and my sister. It was a horrible lesson to learn and I wish I had had some early guidance, but it is why I never rely on anyone but myself.princeofpounds said:Yeah, never trust your mother with your finances again after the mess she made the first time around.
Also, it wasn't just her that failed to report the income to HMRC. It was also you - at least after the age of 18. You may have been young, but you became an adult with adult responsibilities, like all of us. Sorry to be blunt, I'm sure you realise this and I certainly don't criticise you for making mistakes (that we all do to some degree). But I don't think you need it sugar-coated; you were resourceful enough to manage your way through it and that's commendable.
Owning and managing a rental property, and completing annual tax returns, is certainly annoying but clearly you find it more mentally stressful than it 'should' be. That's understandable given your experiences. It's also entirely understandable that you may not feel you want to be a landlord. Why would you, if it's causing you this much grief?
So sell it. Your share of the property is your asset, not an asset of your family. So do what's right for you.
If your family think that being a landlord is an immense privilege which should never be relinquished (which is a pretty stupid attitude but I won't get into the many reasons why here), then they are welcome to raise the money to buy you out. Your sister doesn't lose her share or have to stop being a landlord just because you are selling.
You will need the co-operation of your sister to sell the easy way, but ultimately she cannot 'trap' you in the property forever, you could apply to court for an order for sale if necessary. But there are other low-grade ways of encouraging the decision, particularly if you are managing the property. Again, probably not necessary to get into the details on a war of attrition at this stage.
The wealth isn't just going to disappear (excluding CGT of course). Invest the proceeds someplace else - paying down your own mortgage if you have one, or using as equity to buy your own property, or put it into share ISAs and pensions, or whatever seems sensible and lower-stress than being a landlord.
If your family turn against you for making a totally normal personal decision about your finances, they aren't a great family, at least in this respect.
I have suggested being bought out of my share, which my mother outright refused and said I had no right to do (unless it was given to her for free, that is). My sister is also in no position to buy me out either - as mentioned previously, she still lives at home and relies on my parents, so to her this monthly income is a bonus that she doesn't have to work for. I think my mother is seeing me wanting to sell as wanting to deprive my sister of her monthly rental income, which is why she accuses me of being selfish.
And I won't deny it, a part of me is being selfish. I want to put my mental health first, and in a few years it would be nice to know that I have the money readily available for when I want to buy a home (I am still renting atm). However there seems to be no way going around it without being painted as a monster...1 -
Your sister won't have the regular income but will have a lump sum to invest, put in a pension, live off, etc. You're not taking her share of the house!6
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Why have all that stress in your life when you don't need it? Force the sale of the house (using a solicitor if necessary) and get on with your life.Do you mother and sister EVER think of the pressure you are under? That's not being selfish, by letting you sister have half of the income for zero effort on her part, I'm afraid you are being taken for a mug.Why don't you try deducting your time costs (so a Managing Agent Fee to yourself) before halving the profits and see what you sister says then? Or simply employ a Managing Agent, let them have 15% of the rent (or whatever) and see what your family's reaction is.Best of luck.3
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