Legal Question in Real Estate Law in California
How do I begin charging rent to a relative?
Due to the death of our parents, I own a home with my siblings and one sibling lives in the home. The home is paid for. The agreement we had with the sibling who is living in the home we co-own is that when probate closed he had 4 months to buy us out, which meant he would pay us each 1/3 the value of our parents estate by getting a loan on the house. It has been 5 months and he has not paid us, nor is he even speaking to us. We want to charge him rent so he will have an incentive to get the loan to pay us, but we aren't sure how to approach him. Should we write a contract and give it to him? Should we all sign something? Or just a verbal agreement? Can the 2 of us that he owes decide on an amount he should pay us or does he also have a say in how much the rent should be? Also, even if we do make and agreement what can we do if he does not pay us? I do not know what my rights are in this situation.
4 Answers from Attorneys
Re: How do I begin charging rent to a relative?
Wow, you have presented many issues that need to be addressed, and I hope that I may be able to help.
The important thing to do is to consider all your options while taking into consideration your family situation.
Here are some options available to you:
1) If the relationship is not salvageable between you and your brother/sister, it would be most effective to get a disinterested third party involved to seek a demand for resolving this matter quickly and without legal action if possible.
2) Have a third party negotiate a resolution amicably where all parties can stipulate to a mutual agreement. This can be arranged by a written lease agreement, deed or other tools.
3) Take legal action to partition the property. This requires legal action.
I beleive that it would be proper for all property interest holders who are not living in the home, to come to an agreement regarding how the matter will be handled. Furthermore, because there are more than one interested members, all should be involved to resolve this matter, as it should not be shouldered by one individual alone.
I hope that this information has been helpful. Please do not hesitate to send an e-mail or call (213)384-2220 in the event that you may need clarification regarding this post or have further questions.
Please ask for Khach "Catch"
Good luck
Re: How do I begin charging rent to a relative?
My suggestion is to file an action for partition to have the Court order the property to be sold. That may change your relatives minds in becoming reasonable to pay rent.
Re: How do I begin charging rent to a relative?
If he owns 1/3 of the property, it will be hard to evict him. However, the other 2 parties are entitled to 2/3 of fair market rent. You should determine what that is, then send a demand letter to him. You would be entitled to a judgment for that rent.
The problem is that this could recur every month. You can sell your portion to someone else, but it is unlikely that you will find a buyer.
You can also sell your share to him on a no money down basis, and have him issue a promissory note secured by a deed of trust on the property. Then if he does not pay, you can foreclose.
Are all three people on title now?
This is a sticky family situation, and may require that everyone sit down and talk things over, perhaps with another disinterested party.
Good luck.
Re: How do I begin charging rent to a relative?
At some point if your sibling doesn't cooperate and make an arrangement to buy the home you'll need to file a lawsuit in the superior court for a dissolution of the partnership which is called a 'partition action.' the court will order the property sold, appoint someone to sell the property (referee), and the money split three ways. If the sibling refuses to sign the deed the court can empower the clerk of the court to do that.