Family Fighting over Deceased Grandparents Home

If it was me I would get together with my sister and force a sale, then the cousin has the choice to agree to the sale and move, or buy out the other two owners.

Have to agree. Putting it up for sale might be their best option. Since there is nothing in writing it doesn't sound like there is anything they can do legally. What a mess.

Can you not force a partition sale?

There is no reason at all to let it go into foreclosure in order to do a partition, either. Any party (of ownership) can, at any time, file a lawsuit for partition. At least in most states... can't imagine that NY is different. But ...

In a partition suit, sometimes the owners can even recover attorney's fees from the damaging owner (your aunt who's daughter is living in the home)... and reimbursement for expenses paid (taxes perhaps, upkeep/maintenance). I would ask a real estate attorney about a partition.

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so in your SWH, it sounds like your aunt signed over her 1/3 share to her daughter(the one who is living there)? Is that right? So now your cousin's name is on a deed with your mom and other aunt? So SHE is who would be sued, not your aunt.
So... it may even be possible to sue her (as the owner of a portion of the property) for unpaid rent... since she is living there without paying rent. I'm not sure about that... but it would be worth investigating as part of the partition.

What a selfish pair they are. She has a lien on the property, and doesn't contribute towards the upkeep nor taxes, prevents the property from generating half the rental income it is capable of, AND her mom has her home saved/paid for by the loan... So.. the reality is that if your cousin just walked away, your mom and other aunt would be on the hook for paying the loan TOO, or lose the house and their credit rating(s).
You're right that your aunt and cousin are screwing over your aunt and mom, but I don't think you've evaluated this quite far enough into the future... because, if she is that selfish, it wouldn't be a shock for her to completely walk away, depending on how much she owes on the balance of the loan. And then she has 6 years of rent free living (at 1/3 each of your mom/aunt's share), plus no taxes or upkeep paid. AND a basket of "free" money that she gave to her mother.

Yikes.

An owner of the house can't be kicked out by the other owners. The house may not be able to be put up for sale, either. All owners of the house would have to be in agreement before a sale could be legally finalized. It sounds like the cousin currently occupying is a legal owner, right?

If the other owners want to keep the house, they will have to pay the bills or convince her to pay her share. If they don't/can't pay her share, then the lawyer is right, they could walk away and let the house go into foreclosure.

Even if you take out the windows in winter and she leaves, she is still an OWNER. Your family members are at fault for allowing a sale without putting in place a written agreement (similar to an association agreement) that specified how the taxes, maintenance, and other costs would be paid for.

Who owns the property per the deed? It is up to the legal owners to pay the taxes, etc. as they see fit. If they feel it should be split three ways then they can make a claim in small claims court to recover what they are out. No guarantee they will win since there is nothing in writing and they have been going along with things for six years.

Best bet is to tell the niece that they are selling the house. Would she like to buy their shares. If she cannot afford to do so then meet with a real estate attorney to see if the house can be sold.

Do the "2/3" have proof they paid property taxes for it? If so, I would take the other "1/3" to small claims court to reimburse the "2/3" paying her share of taxes, etc.

If not the 2/3 should start documenting payments so that they can sue 1/3 to be reimbursed.

I would consult another lawyer. If your cousin is 1/3 owner of the home, she needs to be responsible for 1/3 of the costs of the house. That should be IN ADDITION to her own loan against the house. There has to be an answer other than "too bad" like the first lawyer said.

The four of them - the three sisters and your cousin - need to sit down together. They either need to reach an agreement that makes the cousin pay an equal share of the expenses, or they need to put the house on the market. It doesn't sound like its worth it for your mom and aunt to continue owning their shares of the home. They don't seem to be making any money and it's more hassle than it's worth. The third sister needs to step up and realize the problems she's caused - not only does she have financial issues of her own, but she has taught her own daughter to be equally irresponsible with money.

I wouldn't recommend stopping payment, as foreclosing on the house and destroying the credit will hurt them more in the long run.

In the meantime, can you encourage the upstairs tenant to start being REALLY loud? Or, have the tenant knock on your cousin's door all day and night with minor issues that need fixing? Sort of kidding... but at the same time, might spur your cousin into action.

If it were me, I would quit paying - maybe when your cousin gets a foreclosure letter she'll rethink her position. And if not, then let the house go. There is nothing worse than being "house poor" which is what this is doing to your mom and aunt. It will harm their credit, but I would do that before I used my 401K. Retirement can't be put off - it is inevitable and so is the fact that retired people have to eat!

What a mess! Just promise yourself that when you are planning your estate, that you put things in writing so your children don't destroy each other because they are fighting over their inheritance. It happens far too often.

I guess I am a bit confused about the loan situation. Is there an actual loan on this property? Or is your cousin paying back a loan to your mom and her sister?

How much is this property worth? Do your mom and aunt really want to keep this property? Do they rely on the rental income for their own income?

If holding onto the property and paying for the maintenance and taxes is causing a financial hardship to the responsible siblings, then it probably is easiest for them to just stop paying the taxes and letting the county foreclose on the house. If your cousin wants to continue living there, SHE can finally start to pay the for the upkeep, insurance, and taxes. This is probably the least confrontational way for your mother and her sisters to handle the situation with your idiot cousin. What an expensive life lesson. Good luck to everyone involved!

ETA: Thanks for the additional info. Yes, it sounds like it is probably best to tell your cousin that her aunts will no longer pay any money toward the house, and that if she wants to continue to stay in the house, she will have to find a way to pay for the loan, taxes, insurance, and upkeep. She can be the landlord to the paying tenants. Yes, it will trash your mom and your aunt's credit. It will also trash your cousin's credit. But it is bleeding your mom and your aunt dry already, then trashing their credit, while preserving their money, is probably the best way to go.

Here is an idea! Have your mom and aunt stop paying the taxes. Have them continue to collect the rent for a few more months. Then have them ask the responsible tenants to move out. Offer the tenants money (refund some of their rent) to move out. Now your mom and aunts won't be landlords. Your cousin can then choose whether or not to stay in a non-income generating property with a tax lien on it. Maybe once she sees that her credit will be trashed AND she will be evicted AND she probably won't be able to rent an apartment with bad credit, she will be more open to the possibility of moving out and allowing your mom and her siblings to create a new formal agreement for joint ownership.

Since she is 1/3 owner, I don't see why she isn't responsible for 1/3 of expenses, taxes, insurance etc. Tell her you will sue her if she doesn't start paying. I agree she should also have been paying rent. If you had a renter in that apartment you would be getting 1/3 of the rental income. Why in the world did you let this go on for 6 years?

When my uncle had rental properties and he had squatters who wouldn't pay and wouldn't leave, he'd begin an 'improvement' of window replacement in the middle of winter (20 degree weather not counting wind chill), the old windows were removed and ooops! the new windows were late in arriving by several weeks.
The squatters were gone within 24 hours.
Bitter cold is a wonderful motivator.
Once it's vacant, sell it.
Another thing you can do is rent out the other half of the place to some really hard to live with tenants - Hell's Angels members or something like that.

Property and relatives mix badly. There is no agreement here on what needs to be paid and by whom, so few feel responsible and should not have to cover the entire burden. The cousin is crazy to think that repaying her loan is is like paying towards the mortgage. Plus, it was not wise for the other two to co-sign this loan for her. I see legal action as the only recourse otherwise this craziness will continue because the cousin is taking advantage of the situation and will continue to do so. She doesn't get it or is it that she doesn't want to understand because she's in a comfortable situation - rent free.

If my brother and I ever inherit any property, I want out because I could see him wanting to live there rent free and have the idea that because he lives there and keeps an eye on the place, that this is equivalent to financial support. If I could be bought out, that would be ideal otherwise we would have to sell it. I am not one to have overly strong sentimental attachments to property/items, so I could sell it in a minute and not look back or just let it go! A peace of mind is priceless.

This is a big mess. She is a real piece of work. Since the mom signed on the mortgage for her, did the other 1/3 owner sign the mortgage too or did she just give consent to take out a mortgage on the property? Are you sure all 3 are on title? I would have the title pulled to see how the title reads, and have the attorney look at it to see if there is any loopholes. Other than that the attorney gave you accurate info, even if it's not what you wanted to hear. I have worked with mortgages and titles for over 20 years, I highly suggest you do this.

Since property taxes aren't escrowed, the only way to get out of this mess is to stop paying the property taxes. I would threaten this moocher that you will no longer pay the property taxes unless she agrees to sell this property. Maybe the scare tactic will work. If the property goes into foreclosure the only credit that will be affected is the person(s) whose names are on the actual mortgage, not just the title.

oh, what a terrible situation.
this is why it's every bit as important to put things in writing ESPECIALLY when family is involved. family can be and usually is far harder to deal with than impartial strangers.
there's not anything that can be done that i can see. the taxes and repairs have to be paid, and if the cousin refuses to chip in, the only option is to allow foreclosure. the only other possibility would be for your mom and aunt to take the cousin to court and try to hammer out an agreement, which would also be costly. but maybe if the cousin sees her house in jeopardy she'll quit being a mooch.
she's quite wrong from an ethical standpoint, but without some sort of written agreement, the tax assessors and insurance companies don't give a hoot who pays.
khairete
S.

I have read and read this. I am confused. Please clarify what I got wrong.

3 siblings owned this house after the passing of their parents. One sibling sold her portion of the house to her own child. Don't care who else helped her or did what. This person now is 1/3 owner of this house. BUT it's not a house? It is a complex with renters on each side of this one person who lives in an apartment>I am totally confused by this part. It sounds like it's been divided up into smaller apartments or something.

I guess my thoughts would be that she bought 1/3 of the house and she's living in her 1/3. She pays her own bills and lives there. She does not expect the other 2 to pay her utilities or other bills?

Then I'd suggest she pay her own taxes on her own property. Separate the ownership by selling the other 2/3's of the building to those tenants and walk away. They she'd have to pay her own taxes on her own property.

Parents have GOT to stop putting their children in thus situation! Yes, even the tightly knit children will fall out over money, inheritances, and property! Make a will while your can!

I'm trying to make sure I understand correctly.

The cousin is using 1/2 of the property, yet only owns 1/3? I am guessing the rent is only given to the 2 owners (your parents and uncle/aunt). Could you use simple numbers, so it helps me understand more.

Example:
The mortgage and property tax equal $2100. Each owner is paying $700 a month. The rent is $1300 per unit, so should be $2600 ($866 grossed per owner). Your parent and uncle instead get $650 each. The other unit is not being rented and your cousin is causing your parent and uncle to loose money. She does not see that she is profiting $433 more per month? Also, when renovations need to happen is she able to pay the 1/3? does She cover all cost for the unit she lives in?

Yes, it is very greedy of her. The other two owners have families and would like to leave something to their children (not more to their niece than their own daughter). She could also be as you say 'stupid' and maybe if someone spelled it out to her (hey lady, you are taking from my children and grandchildren and using all the profits for yourself).

I would watch on spending too much on lawyers (depending on amount your parents are loosing). Love the must have improvement idea of windows. Best idea ever.

edit:
Wow. your cousin has done more harm to all (well, except herself for now) but taking out that loan. She sounds a bit out of touch with reality and I am not sure what will work with her. Her aunts could say 'We NEED to sell because we can no longer afford it.' Could they up-sale the profits to her? She has to know how good she has it. It scares be that the aunts signed off on the loan. If I was your mom and aunt I would want to get that sold and move on with my life. they may have fond memories and want to keep it. If they do sell it I would love to see if there is a way that the fixes get paid back before the profit is split.

I am confused by this. So the cousin bought her Mom's one third share of the house? She is paying the loan for that one third so it really isn't like she is living rent free...she IS paying to live there. I don't see how she is expected to pay the mortgage loan plus rent. However, as a owner, she should be responsible for one third of the repair costs and taxes and insurance. That is what you should be addressing. If she is not paying her share of the upkeep, then that is not fair. Given that she is living on one side, she should also not be collecting one third of the rental income...

See if you can find a good arbitrator in the area and get all three parties to a meeting. While his or her advice is not legally binding, it can be helpful to have a neutral party try to help everyone agree on fairer terms. Sometimes understanding the other side better can be all it takes.

Put it up for sale.

Just out right sell it, as is, why wait for foreclosure? ! Is the cousin on the deed ? If not there's nothing she can do about it loan or no loan. Then no worries about upkeep, taxes and so on. I would go to a real estate attorney for a consultation, and you can always ask someone at your county's property appraisor office as well. This is sort of like buying a car and not putting gas ,water or oil in it , you can't stop making pymts because you can't get anywhere for the lack of gas in it or lack of being properly maintained . What doesn't your cousin get ?

I gotta say that I think Cheryl B is right. First I would take cousin with you to an attorney and let the attorney explain to her what she is doing to you all. If she doesn't budge, then you know that she will never stop screwing you all.

If she refuses to pull her weight, no more ANYTHING, and let it get foreclosed on. I'd talk to a bankruptcy attorney privately and find out what you can do to prepare for letting the house go.