Pardon the terminology if incorrect.
How would the ownership of a property be structured if there were more than one owner, related or not, but not married?
MDW and I have finally gotten through to her mom and she has decided to move out of the slums to be near or possibly VERY near us.
I know the lawyer routine.
If two parties were NOT EQUAL partners in particular. Her mom has one other heir (dw’s brother) and splitting the equity at some point would be an issue.
We are considering purchasing a property together, rather than one of us purchasing the unit(s) and renting to the other. Too complicated?
Other alternative would be to put her in a condo. She would have to post a significant down payment to keep her monthly within her current income. She’s got the dough, but I’m not sure we could convince her to put up $50k + as a down payment which is what might be needed. 2 bed condos are trading around low 300k around here. A little more than she need, one beds are hard to find if at all.
I would love to read your thoughts.
I hope you all had a nice Christmas.
Eric
Replies
In my mind co-ownership with a sibling laying outside the mix is a good start to a long standing family feud. Legaly you simply put both names on the deed and have an attourney draw up a paper saying who owns what shares. The issue will be when mom goes does the brother think he is entitled to more, less, what? And as I am sure you know the minute someone is gone and an estate is available all bet are off as to who will act normally.
If it were me I would buy it and rent it back to her at a reasonable yet affordable number. If she makes the downpayment or helps either structure it as a short term loan that is paid off by a lower rent level where the amount she doesn't pay compared to market rates comes off the loan. Have it done formally and if something should happen to her you will be liable for the balance but if not you have a way to collect "market rates" during the loan term without actually costing her monthly outlay.
If the money down is no issue buy it yourself, lease it to her at a fair rate she can live with but have her be responsible for the basic upkeep and repairs. What I am saying is if you are renting at below market rates even making some money it is difficult to afford up keep and you will soon hate the situation. By having her involved she won't want as many update etc. and you won't be grudge doing it.
Of course if you have the perfect inlaws where the brother won't sue later and the mother in law will always love you know matter what none of this applies. But if this is the case send me a photo, I want to see americas perfect family lol. Hope this gives you some ideas, others will follow I am sure. Happy Holidays. DanT
Thanks Dan; good thought all around.
The partner thing is too complicated.
We need to get her close to us, I've been pushing for some time now. She's in ok health but there will come a time when............
I'm not sure how close we want to be either. She's talking cottage on the house property, but around here, that ain't gonna happen unless one of us hits the lottery.
We'll look around, I don't want here renting from some azz who's not gonna be nice to her. There is not a lot of legal two family homes in the area. She missed the boat on some senior housing right near here because she has too much in savings.
This may take a while to sort out.
Thanks,
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
I'll go along with Dan. Potential trouble with BIL in the future.
Guaranteed that no matter how far you bend over to make it fair, he will see it differently.
The only reason you're proposing this is to beat him out of "His Share" of mom's money.
Guaranteed.
Joe H
The only reason you're proposing this is to beat him out of "His Share" of mom's money.
WOW! Small world!! You've met my BIL I see![email protected]
It's Never Too Late To Become What You Might Have Been
Buy it your self straight out with no others help is the best option. Lease it to her anb she keeps her money . Its amazing how easy she will pay it off or close to if shes a long term tennant.
Tim
Buy it your self straight out with no others help is the best option.
C'mon Tim lol!! I wouldn't be here asking if that was the case.
Glad you chimed in though, I read your RE posts closely and with interest.
Thanks[email protected]
It's Never Too Late To Become What You Might Have Been
Buying a house with another person who is not your spouse is no big deal. When I was younger, a college buddy and I bought a house together and there were no particular issues - well, no more than there ever is when buying a house.... ;-) As the others have said, the tricky part is what to do when you sell. You need to have some sort of agreement in place up front.
In my case, we were young and stupid so we didn't think about what would have happened if one of us had been hit by a bus or something. When it came time to sell, we simply divided the proceeds right down the middle and moved on. In your case, I would imagine a lawyer could write up a contract that spells out exactly how the proceeds are divided up if or when the house is sold, or one of the parties involved passes away. Perhaps it could be included in a will. I'm no lawyer so this is only speculation on my part.
OK I'll diverge.
Doesn't look like an insurrmountable, or even particularly difficult, problem to me. RE partnerships happen all the time. The successful ones have the eventualities spelled out: what happens when. Percentage ownership, and liability, works fine. Usually there's a general managing partner to determine exactly when a portion of the agreement kicks in. Details worked out in advance. For instance, you're assuming future equity. What if it goes the other way?
I'd think you'd want to invite your BIL to offer criticism about the agreement. That's the time to hash out differences. Which is not to suggest that there won't be the possibility of bad feelings later, but that will always be the case, partnership or not.
NY I know nothing about, but the 3 states I'm familiar with you really want to pay attention to probate, or not, of inheritance, structuring ownership accordingly. You really want a session with a knowledgeable estate attorney. Might be the same guy you need to set up the partnership, assuming you need help, which sounds likely.
PAHS Designer/Builder- Bury it!
Eric
Years ago I bought a house with my mom. It was structured so that in the event one of us died the other became sole owner of the property. There was definitely some hard feelings amongst siblings , not that I gave a damn though. I have a sister that some how thought she would be entitled to "her" share.
My mom has since moved(into another place that I own) and we sold the other place and split the moola.
I have also owned a piece of commercial property with some one else, its structured like a partnership. One of us wants to sell, so be it, it can either be bought up by the other or sold to some one else. The other partner has no control over weather you sell though, meaning that he cant stop the sell just because he doesn't want to come up with the money for the other half or doesn't want to sell.
I know that I would never enter into a partnership on a property where I would be living in the place that I owned with someone else. They would have sort-of an upper hand on your home. I don't like that.
I almost bought a place with another guy, we were going to rent part of it and I was going to live in the other part, it would have put me in a vulnerable position in that if he wanted to sell for whatever reason I'd either have to move or buy his half, and what if I wasn't in the position to buy the other half.
If I was to buy with a family member and wanted to stay "OK" with the rest of the family, which doesn't seam like me, then I'd make it a partnership where if for example MIL dies, the place goes up for sale and you get your half and MIL's half goes to her estate.
Doug
Thanks Doug,
The possibility of my wife and I co-owning a property with her mother seems like it may be difficult if not complicated.
My original idea, was to eventually build a garage with apartment over, move in, build house, put mom in apt.
Not sure she wants to wait! We're just tossing this around at this point, gathering facts and opinions.
Thanks for yours.
Eric[email protected]
It's Never Too Late To Become What You Might Have Been
Eric
You mention the apartment over the garage but you have to consider weather or not she'll be able to get up and down easy enough, maybe not a prob right now but how about in 5 years?
I've been toying with adding a mother in law suit onto our place just for inlaws coming to visit for extended periods of time(gotta keep em out of the main house <G>). I know that my MIL cant go up and down steps very well anymore, neither can my mom so anything up stairs is out. Just something to consider.
Doug
Good idea but Doug beat me to my thought .
A duplex /high-low?
I know one thing . Rental property works when its occupied and doesnt when folks wont pay or its empty. To get an extended stay tennant is a lanlords dream that will pay like clock work.
Im just not sure you want your mil on the same property. For the rest of her life.
Sometimes that might be a job for bil especially if it turns in to critical CARE and mil dont think she needs to be in a nursing home. Pay backs are hell.
Tim
It shouldn't be hard to do, Eric.
Even when you buy with your wife most people choose either "tennants in common" or "joint tennancy". Joint tennancy includes "right of survivorship" i.e. one party dies and the property automatically belongs entirely to the remaining partner or partners. Tennants in common has each partner owning "an undivided half (or third, etc.) interest" in the property. We see (DW and I own a small real estate office) estate settlements and real estate partnerships all the time. With elderly family members it's fairly common now to set up a family trust which spells out ownership and outlines future settlement of a sale of the property. DW and I own the property our office is in with three other partners. We formed an LLC and it has worked well for all of us (been in motion for almost six years.)
Talk to your accountant and an attorney. Yes, it will take some work and expense. You may save substantially, on taxes and/or estate settlement, in the long run by dealing with it now.
Good luck!
Life and suffering are inseparable.