Two years ago, my father (92) “gifted” his 10acre Ky homestead to myself and four other siblings, with the condition that he will live out his natural life here. Another condition stated on the deed is that siblings cannot sell their “shares” “to anyone other than a direct decendant until 3 years after his death”. Sadly, he did this to be fair and avoid family squabbles… At the signing of the deed, each sibling (verbally) agreed on their part of the upkeep of the farm (it needs rehabbing!) - however none of the four have fufilled “their part”. In July my newlywed wife moved here to help take care of my father and the farm. We have repairs/expenses that the others refuse to acknowlege and/or share. The fighting has torn the family apart, and will get worse when my father passes. My wife wants to cut losses and avoid a legal battle by abandoning/selling/giving up our share now if neccessary. I do not want to do this as I have 1000’s of hours of blood, sweat and tears invested in the farm already - not to mention dollars.
So,
Being pre-approved, I have offered to buy out all the siblings with a all-or-nothing deal. However 1 of the 4 refuses to sell. I am wondering if the buyout can be legally forced??? My financing is contingent on the “all-or-nothing” deal and includes cash back for rehabbing the property. I have never bought or sold property but I would like this to be my first opportunity to double/triple a $50k investment of the banks money. I am seeking legal advice but I would REALLY like to hear your opinions?
Is there anything I can do with this 1/5th share? Can I get a mortgage (for rehab money) based on only my interest alone? Can I get my name removed from the deed?
you can’t force a sale, probably can’t get a mortgage. You may be able to use your 20% (or 80%) as collateral other than in a mortgage.
you could still own 80%, which is approx 60% better than owning 20%.
I’d recommend that you speak with an atty. I have another client in the same boat and it’s tough. at a minimum Dad should get all the kids to “put it in writing”, or risk getting nothing.
Be interesting to know why your sibling wants to hold out. Did you point out that a 1/5th share of the property is not really worth 1/5th of the whole?
If your sibling would try to sell a 1/5th share of a property, no one will be willing to pay full price. I suspect no one would be willing to pay more than 50% of value.
In the unlikely event a partition lawsuit to force sale of the property might still be possible in spite of the deed restrictions, you may not get any takers while your father still has a life estate. This is a discussion to have with your attorney. Also talk with your attorney about creating a lien in your favor against the property for your other siblings’ share of the cost of any rehab you need to accomplish with your own funds.
Your father did not do any of you any favors. He created a “family feud” and gifted a capital gains liability on the sale of the property to each of you.
“you could still own 80%, which is approx 60% better than owning 20%.” *** I LOVE your power of positive thinking! I’ve been saving receipts, and logging time/work preparing for the worst because I feel the property is worth it. It tax appraises for 80k, and with some minor work should (market) appraise for at least double that. It has a 3br,2ba brick ranch house, 2 barns (one needs a roof), board fencing, creek & pond, and a rentable mobile home…on the downside it is covered with junk, and everything, and I do mean everything needs paint, etc.
“Be interesting to know why your sibling wants to hold out.” **** That’s for a psycholgy forum! lol I am the youngest vs 2nd youngest. 2 of the others accepted my offer, another has not responded but needs the money. The difficult one, a sister, may not accept any amount just to fight, however I may increase my offer(s). Also I have asked for a family meeting to discuss everything with everyone. I’m at the walking point now because I know that I can get financing on another property. I would love to stay and take care of my father, but don’t want to get screwed in the end. I feel that if I put in the work I should be entitled to the difference in property values then and now. If I honered the 3yr restriction on the current deed wouldn’t I avoid capital gains?
Also, a long-shot thought here…“if” this can be reversed back to my father (all children sell back to him for $1), is there a better way to divide his estate cheaply (and fairly)?
Please be aware that any of the heirs can legally sell their portion of the property to anyone willing to buy it. It also does not need to be a family member; an interesting caveat if sold to an outside interest. I was in your situation several years ago…so far nothing was done and we all still own the property, which is deterioriating every day. Best Wishes!