If you own real estate and leave it to two or more people, several issues may arise. Even close relatives and siblings may disagree about what they should or want to do with their inheritance. Some may not want to have to deal with owning real estate – especially when it comes to having an unexpected co-owner. You may wonder what to do if you find yourself in this situation.
Option 1: Consider a Buyout
If you are in a situation where you have inherited a house with someone else, it is likely that you both own half, unless the person who gave it to you stated otherwise in their will. The giver may specify ownership as being a joint tenancy with the right of survivorship or in a situation as tenants in common. If one co-owner doesn’t want to maintain ownership of the house, the other co-owner will have the option to buy them out. This will involve obtaining the financing on just half of the house’s value, acquiring an appraisal, transferring the ownership title, and paying for any closing costs.
Option 2: Rental or Sale
If neither of the co-owners wants to maintain ownership of the house, it is good to consider renting it or selling it. Rental is also an option is one of the co-owners wants to use the property in the future. Make sure you consider the related realtor costs if you plan to cost, along with costs related to property management, if you choose to rent it out. It’s also necessary to think about the costs associated with future maintenance issues and proper upkeep. In both situations, it is necessary to create a written agreement between the co-owners that specifies who will receives what portion of the money and what tasks each individual is responsible for.
Option 3: Private Dealings
If just one of you wants to sell, but you can’t afford the financing, think about a private loan arrangement. Rather than choosing an official bank loan, the co-owner who has kept the house can provide a loan to the other co-owner. If you choose this option, be sure to create a promissory note and include interest payments. Sometimes, seeing legal help to create this will be necessary.
Option 4: Partition
If you and the other co-owner can’t agree on what should be done with the house, you can file a request that the court partitions the property. Partitioning means the court will order the sale of the house, and the proceeds will be divided between the co-owners. Keep in mind, though, this process is often time-consuming and expensive. A better option is for co-owners just to agree to sell themselves.
If you are in a situation where you don’t know what to do or how to move forward, consider hiring an attorney for help. They can provide you with guidance and a direction to ensure you choose the best path for you and your co-owner.