Legal Question in Real Estate Law in California
Inherited Residential Property
My husband and I live in a house that he and his 4 sisters inherited from their parents. My husband owns 25%, a sister owns 25%, and 50% is split between the 3 remaining. After their mother passed away, the 4 sisters left the house to my husband and verbally gave up any interest in the property. Before I moved in, the house was non-livable --no kitchen cabinets, leaky roof, warped floors, holes on floors and walls. It was basically a tear-down. After I married my husband and moved in this house, we started extensive repairs and improvements to make it livable again. We did the work trusting that the sisters still didn't care about the house. Recently, we finished repairing the bedrooms, bathroom, and kitchen. But now, at least 2 of the sisters are demanding that we sell the house in order to get their share. We will agree to sell the house only if the siblings agree to split the cost of the repairs. One of the siblings don't have any problem with this. The other 3 insist that they should not pay us for anything since we have been living here rent-free. We pay the taxes.They are threatening to sue us if we remove the items we've added. 2 real estate agents agree that without the repairs, the house wouldn't be salable. Who is right?
3 Answers from Attorneys
Re: Inherited Residential Property
Acutally, you are all right, to a certain extent. First, "verbal" agreements relative to a transfer of real estate are not "worth the paper they are printed on", unless the person who allegedly agreed to transfer it to you now acknowledges that they did indeed do so. It was foolish in the extreme to put money into the house without first getting a deed from the parties who were ostensibly giving up their interests in the house. You are entitled to proportionate reimbursement for repairs and refurbishment, and you are also chargeable with the "reasonable rental value" of the property for the time you occupied it.
Re: Inherited Residential Property
I concur with Attorney Whipple. You first need to see how title is held between everyone. He is probably correct that you are tenants in common.
The reason the verbal agreements are irelevant because the law states that any transfers of property must be in writing. There may be an argument that your reliance on their verbal statements was the deciding factor in your decision to pay for such extensive remodeling. This is an equity argument that, unfortunately, is part of a lawsuit.
In the Partition action that Atty. Whipple mentioned, you can also demand that you be reimbursed for money you paid to improve certain parts of the property in addition to requesting the Court determine ownership rights. Again, this requires a Court action.
Lawsuits between family members are rarely anything but ugly, be prepared for it if this is the course of action that you choose.
We are estate planning attorneys, so we have quite a bit of experience with similar disputes. If you would like legal assistance, please feel free to contact me at 626-578-0708 or through our website at www.No-Probate.com.
Re: Inherited Residential Property
First, any oral agreements or promises are of little or no importance.
Each of the five siblings who co-own the house is either a tenant in common (most likely) or there might be a combination of joint tenancies and tenancies in common. In any event, the five of them would be considered "cotenants."
Each cotenant has the right to possess the entire property. This means your husband doesn't have to pay rent to his sisters for his own occupancy. Occupying the property is his right as a cotenant. On the other hand, each sister ALSO has the right of occupancy -- meaning you could have unwanted housemates at any time.
If, however, your husband rented the property or any part thereof to non-owners, the sisters would be entitled to a proportionate share of the rent paid by the third party.
The law on repairs made by one of several cotenants is quite complex, and your legal right to more than 25% of the net sale proceeds may depend upon facts not given or not clear from your question, including whether the other cotenants have been "ousted" (made unwelcome) from possession or stayed away of their own accord, and whether the expenditures were necessary or discretionary. I am researching this very issue for another case at this time.
If the five of you cannot agree, any of the cotenants may bring a special kind of lawsuit called a partition action, asking a court to have the property sold under court supervision and the net proceeds divided equitably. If one of you brought such a suit and the full legal process played out, including trial and sale, the judge or court-appointed referee might give your repair outlays consideration, but to what extent I can't predict or guarantee.
One strategy might be to initiate a partition suit yourself, then see if the sisters will negotiate sensibly rather than endure the cost and hassle of defense.
Perhaps a better starting point would be to have a free initial consultation with an attorney who is well versed in partition matters including the issue of improvement expenditures by the cotenant in possession.