To have concerns about Dsis moving into our jointly owned flat(101 Posts)
Dsis and I inherited a house which is split into two flats and have been renting it out for 15 years now. We own it equally as tenants in common. She is selling her own house and now wants to move into the ground floor flat with her Dh. I expect she’ll buy a couple of houses to rent outright with the proceeds of the sale of her house. Dsis said that I can keep the rent from the upstairs. I said that I would like some time to think about it which didn’t go down too well. I don’t want to be obstructive or unreasonable, but I am worried that there could be disagreements further down the line. We’re both in our 50s and from what she’s said, I think she would like to stay there for forever. She doesn’t want us to transfer ownership of the flat to her name because of Capital Gains Tax, just to live there rent free. AIBU to have some reservations about this? I don’t even know exactly what I should be worried about. I just have a bad feeling that this arrangement could cause problems. E.g. she’s made it clear that she wouldn’t want Dh and I living upstairs at any point, so already seems unfair. Btw she could buy a flat in that location with the proceeds of her house sale but she would get more rental income by buying two properties in a cheaper place.
I don't see how you can stop her moving in, really. Just as she couldn't stop you moving in. Presumably you'll continue to split maintenance costs equally, etc?
I wouldn't get involved in someone else's tax dodge.
How do you currently split the rental income? Let's say you have trouble letting the top flat, would it be only you who loses out if she's living rent free instead of sharing the income?
I think you are right to be worried, especially as she is already setting unreasonable and unenforceable conditions, and only to tax dodge.
I'd sell the whole place. If you want a flat to keep as an investment and rent out, buy another. If she really really wants to live in that particular property herself then she could buy you out of your half (make sure you get a proper valuation).
Couldn't the house be split into two properties legally as well? That way she does whatever she likes with her flat, and you do what you like with yours?
You won't be losing out on rental income if she moves in but it's cheeky of her to say she doesn't want you to move into the other flat.
is the upstairs flat as valuable as the one with a garden? are you getting equal split on your investment?
Are they both equally valuable? Would it be easier to sell up full stop? Has there previously been an agreement that one is hers and one yours etc?
I'd also want clarification as to why she wouldn't want you living there too, and how she thinks she would enforce that/why she has the right.
There is a report in today's (20th March) Daily Mail about two brothers who jointly purchased a property with money from their mother. One of the brothers moved in with his wife and thought he could live there rent free for the rest of his life.
The other brother has just won a court case at Central London County Court to get his brother out.....and the guy who is being evicted will also have to pay 200k in court costs!
I suggest you take a look (I can't link it) and take some legal advice. I suggest that you have a cast-iron contract drawn up too so you retain your fair share of what you've inherited.
It may be best to sell the flats?
You're right to be concerned. What if the value of the flats changes (up or down) and you want to sell? What if there is significant damage to one of the flats that isn't covered by the insurance? By allowing her to live in the flat that you half own, you are effectively her LL...
I would be seeking legal advice.
So will you now receive all the rent from the upstairs flat?
I would think having something legally drawn up, for the property would make sense anyway-what if one of you needs to sell up. But I think offering for her to buy you out would be perhaps a starting suggestion.
Which is all very well, but if this is the case, her sister is getting the benefit of 'her' half of the shared property every month without fail (because she is living in it) whereas OP has to a) find and deal with tenants b) shoulder the financial loss when the property is empty and c) take on the risk of 'her' property being damaged by tenants.
Yes def read the article in today's paper about the two brothers. I can see this leading to problems
What if the upstairs tenants are a pain and she expects you to sort them out as you get the rent?
Can you get both flats valued and ask her to buy you out?
That way you can buy another flat and rent it out or be free of the issue
When MIL passed, BIL and DH inherited the house. We let BIL live there rent free for 6 months, until the dust settled and we were all in the right emotional place to sell. The solicitor was most unhappy we weren't charging him 50% of the rentable value!
The GF flat has the sole use of the garden and a parking place, so it is of more value than the FF. I would keep the whole of the FF rent but the problem with this is that at the moment we share both rents, so if one flat is empty at least there is half the income coming in. The GF tenant is fantastic and has been there for about 10 years and he always pays his rent on time. The FF has often had some fairly long void periods and has been more difficult to rent out.
Also, at the moment we share all the maintenance costs. I'm not sure how this would work if she's living in the GFF.
Sound like she should live in the upstairs flat then.
Maybe seeing she has sold her house, she should buy you out of your share of the flats and then she can decide who lives upstais.
Then you can buy another rental for the income and she will have no say in it.
Yeah if she wants to live there she goes in the top flat and she doesn't get to dictate whether you ever move in.
I wouldn't want to be part of this. I think you need to sell the whole thing and then she can buy you out or buy herself a flat. It was always inevitable that there would be a problem.
She cannot cherrypick the better flat and tell you that you can collect the rent on the lesser, harder to let flat. Plus you'll have the roof to contend with, won't you?
If she lives there without paying anything to you, won't it become hers by default in years to come?
Your sister cannot dictate terms of who lives in which bits, much in the same way that you can't. The fluctuations in the price of the property are going to benefit her more if you allow this situation. To go ahead and the only way to limit the potential damage and loss to yourself is to draw up legally binding papers which will damage your relationship. Although to be honest your sisters actions are kit what I would call fair or justified.
I'd would say the only options which are realistic is for you to sell the entire property and tough tits to your sister, or she can buy out your percentage share of the property, NOT the same as buying the top flat which light be worth less, but the 50%(which I assume is yours) at market price. Then she isn't getting a home for free and your get some cash to safely invest elsewhere. Or enjoy.
If she moves in she will prevent you ever selling it - it stops you ever getting capital out of the property until she dies. And I'd want to be very clear about what happens in that instance, too.
Much better idea for you to sell this property and split the equity if she wants a flat to live in.
Agree put her in the top floor or she lives elsewhere. Alternatively she pays half the rent to you - she is trying to get an unfair advantage from this. She may not even realise it though
If I sell my share to her I'll get a big CGT bill, but I suppose there would be tax to pay if we end up selling the property anyway. She doens't want to sell because of the CGT.
She thinks I'm being completely unreasonable to ask for thinking time and started screaming at me and stormed out when I said we needed to discuss it further. It has caused a lot of bad feeling. I don't want to be difficult but I'm worried her moving in could cause even more problems.
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