By Ilyce Glink and Samuel J. Tamkin, Tribune Content Agency
Real Estate Matters
Q: My father recently passed away and left his five daughters his one-third share of a beach house he owned with his two sisters. Both are still alive. One of my sisters and I want to keep the house and three want to be bought out. But, I do not have $80,000 to buy them out. My father’s two sisters are saying that if I don’t have the money to buy out my three sisters, they will buy all five girls out, and it doesn’t make any sense to me that this would be the only way to do it. I want my share of the beach house. I’m just not sure how I can do it.
My father’s sisters are saying that we can only buy out if it’s all five of us otherwise the five of us have to figure out how to finance the sisters who want to be bought out. So if I want to keep the beach property, I would have to buy out my four sisters, according to my aunts. This doesn’t seem right to me. What do you think?
A: If your dad and his sisters had an agreement that any new person coming into ownership of the home couldn’t split up his interest, they might be right in insisting that you and your sisters work this out. But if they didn’t have any agreement, there may be no reason why any of you can be part owners of the beach house. However, we could see how having many owners could cause issues and complications down the road. More on this in a minute.
Let’s take a step back. If your buyout amount is $80,000, we assume that this property is quite substantial. Your aunts and your father must have had their own arrangement on how each person was going to use the property. Possibly, they all worked together and knew exactly when each person would get the use of the property.
Understandably, if you and your four sisters become owners, your expectations of your use of the home might cause some confusion and even some difficulty with scheduling the use of the property. That could be unfair to your aunts, who have seemingly managed their time at the property easily over the years.
What we don’t understand is why your aunts would be unable to allow two or more of you to own your father’s share but would allow all your sisters to have his share.
We assume that your father and his sisters had some formal agreement that would allow all his kids to own his share of the beach house but they, in turn, would have the right to buy out his interest if all his kids were not interested in keeping his share of the house.
We guess you’d want to understand what your dad’s agreement was with his sisters, and you’d need to review the document that they signed governing their relationship. It would seem to us that you’d want to keep a friendly relationship with your aunts and that you and your siblings should work things out. If they don’t have a formal document relating to the buyout provisions between all of you, they may not have the right to buy you out. Once you inherit your dad’s share of the property, you will be an owner of the property.
Our qualification there is that we don’t know if your dad’s interest in the home has been “transferred” to you or whether his interest was owned by him or by an entity in which he owned a one-third share. This could be a crucial information point, so you should try to get more information on how your dad and his sisters owned the property — the way they held title to the property, and what other agreements your dad and his sisters had.
Once you have that information, you can address some of your questions and decide how to proceed. If your aunts are correct, and they have the right to buy out you and your siblings, that would have been the deal your dad made with them and you might have to abide by that. Good luck!