Legal Question in Real Estate Law in California
my brother and I inherited my moms house. He has been living there for 2 years, renting out 2 rooms and collecting rent. He wont sell, because he owes back child support, can't buy me out, doesnt want to move so we both get rental income, and wont split the rent he's getting with me. Times are tough now and I may lose my house, as I cant re-fi or get any loan modification because I own another property. Yet I don't get any benefits from this property. I could use half the rent money he's collected to help with my bills. What are my options? Can I force him to sell, can I force him to send my half of the rent money? Unfortunately, he gave me power of attorney in his living trust, and appointed me as trustee. So now I'm just fighting against myself.
3 Answers from Attorneys
You can force a sale by filing an action for partition. You are also entitled to half the rents and can include a cause of action for an accounting and distribution.
The law on co-owned real property is that both co-owners have the right of possession of the entire property. The practical effect is that either or both of you could live there without payment of rent, but when one co-owner rents to a third party, the other co-owner is entitled to receive a pro-rata share of the net rental income.
I'm not exactly sure how the "net rental income" that must be divided would be calculated, but I would think that the co-owner in possession and collecting the rent would be allowed to deduct actual cash incremental outlays only, rather than everything that could be deducted from his tax return. For example, the presence of the tenant probably doesn't affect property taxes, nor insurance very much, and depreciation is not a cash cost incurred by him. You should therefore be entitled to nearly half of what he's bringing in from renters.
You can also force a sale of the property by bringing a special kind of lawsuit called a partition action, and described in the Code of Civil Procedure at sections 872.010 through 874.240. The court of the county where the property is situated will first decide the parties' rights and interests, then order the property sold and the net proceeds divided. The division can take into account amounts one party ought, in fairness, pay to the other as reimbursement or disgorgement of rents not shared. Net proceeds are what's left after paying off any liens and commissions and other costs of sale. An election to sue for partition should be made in view of the costs of suit and the net market value of the property. If it is heavily mortgaged in relation to market value, a partition action could cost more than it brings in.
Most partition suits are settled out of court by one or the other co-owners buying out the other or by their agreement to sell the property without the necessity of a judge's or a referee's supervision.
As to your brother's living trust, I fail to see what that has to do with anything. As long as he's alive, he can change or cancel his trust and/or revoke a power of attorney, and of course very well may do just that if you sue him for rents or for partition.
Partition Action. Contact me directly. 20 years experience.