Can brother in law force us to sell?

[teaandbuns]

This is long and complicated... apologies in advance, and thanks for reading.

My OH and I bought a house with my mother in law. We paid the mortgage, all bills, looked after everything including her. She provided the deposit through the sale of her own house. Her name was not on the deeds.

Four years on, MIL died. It happened rather suddenly, in late 2017. OH has one brother, resident in the US for donkey's years. They have never been close.

BIL wants his inheritance, which is mostly the proceeds from the sale of their mother's house, and is therefore tied up in our home. She owned about a 36 percent share of the place so we owe him about 18 percent of the total current value. There is no legal paperwork covering any of this (we did consult a solicitor before MIL died but he was making it all so convoluted there wouldn't have been anything left once his fees had been paid) but we are quite clear that we owe BIL that percentage and I don't think there's any argument on that front.

The problem is timing. BIL is well off (owns properties in New York), and as Brexit is obviously knocking the UK economy and house prices, we suggested waiting for things to improve before selling (he would of course benefit from any price improvement). He seemed OK with this at first but has since changed his mind.

We put the house on the market in March, as soon as we realised he didn't in fact want to wait. Things rapidly turned nasty (he doesn't believe we're really trying to sell and keeps suggesting we're up to all sorts, including having forced his mum to sign secret documents in our favour (not the case!)). We remortgaged as much as we could and released £60k, which we offered to give him while we try to raise the rest, but for some reason he refused that. (We owe him about £175k in total.)

He is demanding to be kept in the loop with the estate agents, to know about all viewings etc.

We are at our wits' end. We've never tried to lie or cheat. In fact we worked our bums off getting the house in perfect order for sale. There have been no proceedable offers, and all we're getting is demands to know when he'll be paid. I could of course show him all the emails I exchange with the agents but who is he - who stood back and watched me change his mother's colostomy bag when he visited while she was sick - to decide I can't be trusted and need to prove myself to him? It's bad enough having an unwanted house move hanging over you, plus the worry about where you'll go, without having this man barking demands and accusations from across the pond. You might wonder why if we have nothing to hide we don't just show him the correspondence - but I don't think it would end there. Judging by his behaviour so far, he'd be all over the agents, trying to get the price dropped and running the sale from afar.

We don't have much equity - the house needed a lot of work and we probably paid too much for it - and of course if we do manage to sell we will have to pay stamp duty and moving costs so we'll be limping off with not a lot to show for the last few years.

On top of that we'll be putting our eight-year-old daughter through a house move not long after she lost her live-in grandma - a major bereavement for her as she can't remember a time when they didn't live together and they were very close.

We put the house straight up for sale and have done our best. But all we've had in return is bullying, and it's making us feel like taking the house off the market.

My question is, do we actually HAVE to sell the house right now? The split is roughly 1/5 ownership to BIL vs 4/5 to us, so do we really have to do what he says and be bullied into selling at a terrible time? Even if we sell at the full asking price (which we won't) we'll be losing out a lot. Can he force us to accept a low offer or drop the price until someone eventually buys? What's the state of play?

At the moment we're jumping when BIL says jump - but is that right?

The estate is currently with a different solicitor who is looking after applying for probate, but she represents the estate (and both brothers are executors) so she wouldn't be able to act for us.

We have obviously reached a stage where we do need legal advice and will start looking for another solicitor on Monday. Meanwhile I wondered if anyone could offer their thoughts as I feel like I've read the whole internet and can't find anyone who's in the same situation as us!

Thank you.

Why would you owe him uplift? Your MIL didn't make mortgage payments. If she had taken her money and invested it rather than putting it in your home, she would have paid tax on that investment. She may have lost money if it was invested in the market, she may have had to dip into that investment for living expenses, etc.

It would seem to me you owe him the original amount plus, at best, a percentage of the after tax amount as if it were invested in a very secure, low risk investment.

@Halo84 It's not difficult. MIL purchased a % interest in the property. The value of that fluctuates with the value of the property.

I'm surprised you think it's so clear cut Collaborate. I think it is far from clear, and that OP should get proper advice based on all the facts without saying anything more to bil.

No, it’s not clear she purchased an interest in the property. Had she, she would have paid that percentage interest in the mortgage, in property taxes, in property improvements, etc. Her estate is benefiting from not paying those expenses.

The facts as we know it are:

1. The MIL is acknowledged to have owned a 36% interest in the property. Presumably because her contribution paid for 36% of the property. Presumably OP bought the other 64% using a combination of mortgage and deposit of their own - which is why they paid the mortgage on their own.

1. She went to see a solicitor about getting her name on the deeds but it seemed too convoluted for her to want to do anything about it.

1. She acted as if she had an interest in the property during her lifetime. OP did too - she has put in writing numerous times that the MIL had a 36% interest.

4.A resulting trust is the creation of an implied trust by operation of law, where property is transferred to someone who pays nothing for it; and then is implied to have held the property for benefit of another person. Either that, or MiL had an interest under a constructive trust.

1. OP has already partly paid of the value of MIL's interest in the property.

It would be folly in the extreme for OP to try and claim that MIL had no interest in the property as she would be contradicting her clear actions and would most likely lose on the basis of the information contained in this thread.

Nah. He'd get fuck all from me until I was ready to pay him.

If he pushed I'd go even slower.

Mil and OP may have genuinely believed that mil had a 36% share in the house but the fact is that unless this is legally drawn up at the time and mil was paying 36% of the mortgage/home improvements/bills/taxes associated with home ownership, then OP could argue that the initial 36% was a loan for the deposit. Bil is entitled to 18% of that loan repaid, plus interest but he is not entitled to 18% of the current value of their house since mil presumably lived there without paying for any of the stuff that added value or 'her share' of the mortgage.
OP could possibly argue in court that mils investment should go towards the cost of having OP housing her and looking after her - it's entirely possible that mil would have spent far more if she had needed to pay care home fees or even just her own housing costs. So this is not entirely straightforward.
Remember bil sat on his arse abroad while OP looked after his mum - this shouldn't now cost her her home. And if it does, then all legal fees should be deducted before bil gets his share since he is forcing the sale
I'd probably get a loan and offer him 18% of original loan plus interest at bank savings rate. Add it into your mortgage. I'd tell him this is a take it or leave it offer and if he leaves it you are willing to drag it out for years and you will counter claim such that he won't see much money at all and if he does it will be years away. Is he likely to do that from another country with international lawyers fees?

^^ This. With bells on.

OK. Clearly I know very little about this area of law. As does the chancery barrister who provided me with an advice in a recent case of mine with similar facts.

But presumably Collaborate the BIL cannot insist they sell now.
And what of the mortgage company? Did they know there was someone else with a charge on the house?

This thread should be compulsory reading for every OP who starts a thread asking if they should pool resources with their parents/ILs and buy a house. Without getting all the details nailed down legally, it's a complete nightmare to unravel what everyone's intentions were.

@drspouse Look at ss 14 & 15 of the Trust of Land (Appointment of Trustees) Act. In the event that a sale is not agreed (and OP has confirmed already that the house is on the market) the court can and will order a sale. There is no ned for BiL to apply to court though, as the house is being marketed.

What the mortgage company knew or didn't know is irrelevant. Anyway, MiL didn't have a charge on the property. She had an equitable interest under a resulting or constructive trust.

Some absolutely dreadful advice being given here. Assuming MIL is accepted as having a 36% interest in the house, this does not mean that MIL would need to have paid 36% of the mortgage!

Look at it like this:

• MIL bought 36% of the house, she paid cash for it. She doesn't owe anyone anything.
• OP and her DH bought 64%. They had no cash so took out a mortgage for that amount. MIL does not have to pay their mortgage to keep her 36% share.

There is a question around how the money spent on renovations affects the MIL's %, but that will depend on the circumstances.

OP - a lot of the advice you've had here is woefully ignorant. It's good that you're getting proper legal advice, and I hope it gives you a reasonable way forward.

OP, I can tell you from experience that conducting legal affairs about an estate between the UK and the US is a nightmare.

My aunt died in the US on 3rd May 2016 and left me her entire estate, but her will was deemed invalid because it was missing none of the two witnesses signatures.

It was all finally settled two weeks ago. Each piece of paperwork needing to be signed by other relatives had to be validated and paid for at the US embassy in London.

I realise your situation is the opposite way round but I’m guessing it will be similarly convoluted. So what I’m saying is his “I’ll see you in court” sounds like an empty threat that would cost him more than his supposed inheritance.

a lot of the advice you've had here is woefully ignorant

Indeed. Another thread where there is a lot of "legal" advice from people who haven't got a clue about the law. Some of it also seems to be lacking in common sense - the idea that if A buys something with B, A pays cash for their share and B takes out a loan to pay for their share, A must then contribute towards paying off B's loan otherwise they lose part of their share, for example. B's loan is nothing to do with A. If A contributes towards B's loan it may increase their share of the property. A failure to contribute will not reduce their share.

But there is nothing on paper to say that mils money bought a share in the property. Seemingly the only info on paper is that mil loaned that money. That could have been a deposit loan not necessarily a share of the house. If mil was expecting the loan to be repaid, then that's not the same as owning a share of the house. Being able to prove contribution to a mortgage shows enough evidence that mil could have put a charge against the house.

But there is nothing on paper to say that mils money bought a share in the property

That doesn't matter. If everyone has behaved as if MIL bought a share in the property then she has indeed bought a share in the property even though there is nothing in writing. See Collaborate's post at 23:20 last night.

But surely legally it does matter what is on paper. Otherwise people could make any kind of claim. Someone has to unpick how the house is valued - has it increased in worth because of home improvements the OP alone paid for? Or just natural house price increases. Surely bil cannot claim for investment the OP has made to increase the value?

But surely legally it does matter what is on paper. Otherwise people could make any kind of claim

If there is something in writing it can help. But, as per my previous post, if everyone behaves as if a person has a share in a property the assumption is that they do indeed have a share in the property even if there is nothing in writing.

Yes, there may in some cases by things to unpick around home improvements that have only been paid for by one party. But the OP hasn't suggested that there are any such improvements. The OP has repeatedly acknowledged that MIL owned 36% of the house. That is therefore likely to be the legal position.

Is there no way to increase your mortgage to cover what he's owed? Is the equity too small?

I'm sorry if I'm asking stupid questions here, but who does OP have to acknowledge that to in order for it to be legally binding?
I'm thinking about when people move in together and only one person is on the deeds, but both make a contribution to mortgage/home improvements. If the relationship ends, the one not on the deeds has to prove their contribution to get a charge against the house. With the mil, it's proven that she paid in 36% of the initial cost but what's to stop OP from claiming it was a loan. What does behaving as if mil was co owner actually mean?

I completely understand that mortally you need to give bro his 18%. However, absoloutly no uplift in price. Renovations were done at your own cost and you have cared for Mil as well. I would suggest he gets his 18% of what she originally put in and not a penny more. No paperwork determines the price uplift OR if it had gone down either. How much would 18% be of what she loaned you in the first place? Could the 60k you borrowed cover that. Don't forget her 36% share of the start duty. 18% needs to be deducted from his share to cover that costs also 50% of her removal costs from one house to your needs to be shared equally S well. I think that perhaps if you calculate correctly and deduct your half of certain costs then your 60k may just about cover the bulk with on my a little extra needed.

Be ruthless, he donsentgive a hoot about you and the relationship has ready early broken down.

Put it in the market for the highest valuation you received. Don’t tidy up and talk about it’s defects when people come to check it and insist in getting the full asking price no matter what. You will be in the market for years... or may end up with more equity

We do have papers proving that it was intended as an investment in the house that would be paid back after her death. There's a document written by me and OH outlining the percentage arrangement. It was provided to BIL before he turned nasty and is also with the solicitor looking after probate.

To all those who have asked about raising another loan, we're not in position to do that. I was made redundant a few months ago and am still trying to get another job. The figures don't work on OH's money only.

We aren't trying to argue over owing BIL the money. We just don't want to be chucked out of our house. It's all about timing. OH will be able to pay it back out of his pension after he turns 55 in November 2020. Meanwhile his business is up for sale and highly likely to sell way before that.

BIL turned down the £70k up front that we offered. He wants the lot, in one, now, and even wants to be involved with the sale process. Next, no doubt, he will insist that we reduce the price which will affect him very little, but us a lot.

If this was a divorce case, with a child involved, and the 'complainant' already adequately housed, I'm pretty sure we couldn't be forced to sell immediately and at a discount. Especially with the prospect of the funds coming from another source in the forseeable future.

Anyway. I'll see what the solicitor has to say tomorrow.

I really appreciate your time everyone, and the expertise of the lawyers among you.