Selling inherited house

[Cancermummy]

I'm looking for some advice and can't seem to find anything on this situation.

Me and my sister inherited our grandparents shared ownership house 4 years ago. We both got 25%. My sister was still living at our parents with no interest in moving out and no job (so wouldn't have been able to afford rent payments). It was agreed I would live there and when I eventually sold it she would get what it was evaluated at in the will.

The time has come for me to look at selling the place. My sister is still living at our parents with no job so is unable be able to take over the place. We have put a lot of improvements into the house over the years including a fully functioning garden office. My sister now wants 50% of what we sell for despite originally agreeing to only have 50% of its value at the time of our inheritance.

Does anyone have an idea on what a reasonable amount would be for her to get? Or any idea where we stand legally? To give an idea on price our 25% of the house was originally worth £32,500. I'm not sure what its worth now.

Any help or pointing in the right direction would be appreciated. Thank you.

I think the fair position would be to add up the rent that’s been paid since you moved in and divide it by 2. That is a market valuation of the rent you should of paid to your sister add that on to her initial value and it’s reasonable compensation for waiting to recieve the funds. It might possibly be cheaper to give her the full 25% now. It may not have increased in value as much as you hope and shared ownership properties can be hard to sell.

She doesn't deserve 50% of the value now - possibly 25% as even though u have paid for improvements she's also had to wait for her share which could have been sat in a high interest account

Speak to a solicitor and find out the legal position. It's no good asking randoms like me on here.

Ok - the rent you paid on the half of the house neither of you owned is neither here nor there. You chose to live in the house and pay the rent being asked for the other half. That figures nowhere as it had nothing to do with your sister or anyone else. That was your choice.

You didn't pay her any rent, but your sister owned and still owns half of the rest of it. She doesn't have to sell her share at all if she doesn't want to and you can't force her to do that. You now want to sell 50% of the shared house to someone else ( but as I say you need her agreement). The value of the house will have gone up hopefully in 4 years.

You say you paid all the Bills - but many/most of those Bills will have been due by you entirely because you were living in it, and not her responsibility.

If I were you I would sit down with your sister and work out

a) What expenditure did you make on the house, coming under the heading of repairs and necessary maintenance which would have fallen to her to share equally with you - that is an expenditure which falls on her side to be due to be paid by her. The garden office does not come under that category
b) What rent would have been payable if you HAD paid rent to her
c) How much has the value of the home gone up due to your improvements and not just because house prices may have gone up?

So add up your projected rent which wasn't paid and the added value of the home due solely to the home improvements and set them against what your sister should have paid for her fair share of repairs and necessary maintenance. Whatever the difference is should be top sliced to whoever comes out on the plus side ( i.e. spent more). That amount should then be taken off the final sale value once it's sold. The rest should then be split 50/50 after selling expenses have been taken off.

Seems fair to me?

I think what you do is write a list for all the improvements done to the house .
Plus other improvements.
Council tax is a bill as well. Outgoings.
The work out rent for house that you would have paid.

Take the rent away from Outgoings.

Then you get the different , from the profits...

What ever is left, you split 25/25/50.

I'd be a bit sceptical as well about how much the money you have spent has added to the value. Remember that half the "extra value" belongs to the half of the house that neither of you own
Can you move the home office to your next home?

If you've kept all the receipts for the improvements that would be helpful.
You say you pay the bills but which ones?

Gas
Electric
Water
Council tax
TV licence
Internet
Phone
House insurance
Contents insurance

Which of these did you pay ?

I think I would see if it would be possible to get two valuations. One with the improvements and one of what it would have been without them. Then you recoup the increase in worth from your improvements and your sister gets the 25% of what it would have been worth if you have just let it sit empty for the 4 years.

I dont think its fair that she gets half of the increased value if she didnt contribute to any of the improvements.

At the very least, I would insist on the full cost of the improvements to be repaid out of the sale price before the rest is split.

Some of these responses are so complicated that I would go back to basics:

Do you like your sister and hope to maintain a healthy relationship with her in the future?

If the answer is yes, you both get 25% of its current value. Forget about the value you may have added in improvements, you didn’t pay her rent and she didn’t get to earn interest on her 25%, so whilst they may not exactly cancel one another out, it’s the most simplest way I can see of being fair without it causing a massive rift. If you feel financially hard done by because of this, remember that YOU did not have to live with your parents for the last four years. You had a comfortable home and all the benefits of independence.

If the answer is no: you need to start a new thread on Legal.

As someone in a similar situation you are legally suppose to pay rent to her at the rate of 1/4th of the house (for her 25%).

Find out how much 25% is now. (it might still be the same, a lot of house work only increases the value the same as its worth so will not matter at all, like a £3.5k new heating system will only increase the house value between £2k-£5k on average so could lose money as its a standard thing to expect in a house).

Work out how much rent you owe her in rent. (if the house would be worth £1k a month then £250 so 4 years = £12k as an example)

Work out how much money you spent on the house. (things add value is stuff like having a drive added, landscaping, extentions/conversions that create rooms, adding double glazing if there was only single glazing previous and good quality new kitchens... painting/decorating, new bathrooms, new boilers, rewires, replacing double glazing and roofing do not tend to add much extra value but can increase 'salability').

Say the house is £64k and you owe her £12k rent and you spent £15k in renovation and its now all that work makes it worth 70k then you are arguing over nothing and splitting hairs... letting her have the little extra is really nothing.

You were living in her portion of the house but not paying her rent.
You paid the rent on the other 50% as you were living there.
You paid the bills as you were living there.
You made improvements as you were living there and enjoying those improvements.
Did you expect your dsis to pay half your rent and half your bills while you live rent free in her portion of the house.
You're a CF, pay your dsis her 25% as set out in the will.
I'm so glad you're not my sister.

You're being unreasonable OP - you got the benefit of living there and only paying a small amount of rent relative to market rates - be grateful for that.

You didn't pay your sister the rent that you legally owed her. Your sister is perfectly reasonable to still want 25% of a house that she legally owns just as much as you do.

I wonder if there is someone (a partner) whispering in your ear about what you are owed, the unfairness etc. and skewing your thinking, or if there is existing resentment at your sister - you mention several times about her not having a job and living at home. This doesn't change the fact that she legally owns 25% of the house (i.e. the current value of the house).

You may end up losing your relationship with your sister if you keep pushing this.

If the house was worth £200000 at the time you inherited, you and dsis shares were worth £50000.
Let's say you spent £10,000 on the house and it's increased a bit anyway to £215000.
You and dsis now own half of that. So your shares have £53750.
Really do not fall out over this. You chose to spend the money, and you likely benefitted from lower rent by moving there.

I'm afraid you won't find any advice online about your situation OP - it's very specific and you need specific advice from a solicitor because as @Hoppinggreen writes "What is reasonable may not be what is legal ....." So, I would advise you to do this:

• Phone some local solicitors in your town to see if any of them provide "fixed fee" appointments (some still do and this will limit your cost to a known amount for a fixed time, which is typically no more than an hour);
• Ensure you take a copy of the Will of your last deceased grand-parent (the one you actually inherited from) with you to the appointment (if you don't have a copy you can request one from the probate registry for a £1.50 fee via this link: www.gov.uk/search-will-probate);
• Also take a copy of the Title Deeds which you can get for a £3 fee from the Land Registry via this link: https://www.gov.uk/get-information-about-property-and-land/copies-of-deeds);
• Make a list of all the significant improvements you've made (obviously the home office, but also, for example, if you've installed a new kitchen or bathroom) and how much these cost you;
• Write a clear, brief summary of the situation for the solicitor to read so you don't waste time telling him "all about it";
• Make a list of all the burning questions you want answered and take this too.

Taking the appropriate documentation plus your summary and list of questions will ensure you use your limited time with the solicitor well. And the combination of the Will and Title Deeds will enable the solicitor to understand what the legal ownership split is. I fear, however, that if the Will states simply that you and your sister are bequeathed 25% of the value of the property - with no more detail than that - then it would be implied that this is the value at the time of sale, whenever that happens. Anyway, it's LEGAL advice you need, not MNs' opinions, so good luck! 😊

But surely she would have sold it... it was only kept to benefit you so none of that matters at all.

The fact YOU choose to keep it means you needed to pay her 25% rent.

Your assuming its gone up in price a lot, I think you will be suprise to learn it probably hasn't unless you did major very expensive works in which case pay her her original 15% + the 4 years rent if thats less than the current 25% (I really doubt it is though).

I don't think it's as straightforward as some are claiming.

You and your sister were liable for the rent on the 50% you didn't own but you paid all of that. You also owed her rent on the 25% she owed. So lets say total rent was £1000. That would be £500 (£250 from each of you) to whoever owns the other half and £250 to your sister. However, as you paid the full £500 to the other owner, that cancelled out the £250 you owed your sister.

So that basically means you have effectively paid the correct amount of rent to your sister for the 4 years you were there. However, she still owns 25% of the house as it is today. She was also liable for its upkeep over the 4 years but presumably didn't pay anything. The question then is how much you subsidised her in terms of essential upkeep costs (repairs etc) and how much you spent on improvements off your own bat. Whatever you spent off your own bat without her agreement to be liable for the costs is tough luck on you really.

I would say she should get 25% of sale price minus the amount you subsidised on essential upkeep or agreed improvements where you discussed them and she agreed to pay.

None of that is relevant.
Say the house was worth £200k when you inherited it 4 years ago with a shared ownership of 50%. So you and ds inherited £100k. She could have insisted the house was sold then to get her £50k and you use your share to buy your own house.
Now the house could be worth £400k, so the share is £200k, ie £100k each. You’ve benefitted from having her £50k. Would you argue that the Housing association or whomever owns the other 50% should only get what the house was worth 4 years ago? What about if the house had gone down in value? Would you still give her half the value of your joint share based on the value of death?

I doubt it will have gone up by much in 4 years and you are only looking at 25% each anyway. My advice would be generous to your sister. You have had the benefit of living there four years while she hasn’t had use of her inheritance. Justice delayed is justice denied.

I was just about to post the same but you worded it much better.

I would absolutely share anything 50/50 with my sister because I love her to bits, and she equally wouldn’t take advantage of me. Sometimes, it’s that simple.

Sometimes it isn’t, and that’s when you need to refer to legalities.

50% of sold value minus any expenses ... e
Simple

The OP paid all of that because she got full benefit of it. She owes 25% of the house. The other 75% she rented, off a combination of owners, one of whom is her sister. Legally she should have paid her sister rent for the 25% share as well as the other owner for their 50% share.

Her sister would only have been liable for the rent on the 50% she did not own if she'd lived there, too.

OP, I agree with those who say it's as simple as if you love your sister, then don't fall out over money.

Yes, you're right I think. I was assuming the other owners had to pay the HA for house in order to have rights to it but really, the sister is effectively subletting to the op so op needs to pay the sister's share too.

So not only does the sister own 25% of the house, the op also owes her 4 year's worth of rent.

But she only owes the sister the rent IF the sister wanted to sell it and the OP blocked the sale, but the OP said that she wasnt bothered about selling it.

So the alternative would have been it sitting empty and the OP and the sister paying £250 a month rent to the HA until/if they sold it. As it is, the OP living there, along with the improvements she has made, has left the sister no worse off and actualy by the sounds of it, could be better off if the improvements increase the value.

The sister hasnt had a job in 4 years and is living with their parents. The OP doesnt say that there are any issues her sister has that means she cannot comprehend the legalities, so from that I am taking that its a "cant be bothered, you sort it, yeah whatever" situation (have a similar person in my extended family). So why shouldnt the OP benefit from the work and money put in to the property?

That would only be the case if they could not sublet the house. Can you sublet a shared ownership house?

According to a pp,no you can't.

And even if they could, the op has said that the sister would not be able to afford the upkeep, repairs, certificates etc that a landlord is responsible for.