I want out of a building's ownership!

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  #1  
Old 06-25-13, 06:50 AM
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I want out of a building's ownership!

My parents generously gave their second home (cabin) to me and my 3 siblings as part of their estate planning. Two of us will not use the cabin and two of us will.
My brother and I would like to sell our shares but my sisters don't want to buy them and they don't want to sell the cabin and split the proceeds.

How do I go about getting my brother's and my shares exchanged for cash? Can we force the sale of the cabin to get our money if they are not willing to buy our shares?

TIA,
BWSwede
 
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  #2  
Old 06-25-13, 06:56 AM
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Contact an attorney, just going to get some guesses here.
 
  #3  
Old 06-25-13, 07:19 AM
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Thanks for the reply Joe. I figured there would be some attorney's here that would at least let me know my options.

Best,
BWSwede
 
  #4  
Old 06-25-13, 07:23 AM
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Unfortunately Joe is right.

I would however not bring up the lawyer with your siblings until you have no other choice. A lawyer can help with suggestions and resolutions to the issue, but a lot of times, you bring in a lawyer into these family matters, things turn ugly. Use the lawyer for advise only. Not a strong arm tactic.

On a side note, the family that doesn't want to buy your portion, could it be an available funds issue?
I know myself, if/when it comes time to address my parent's estate, neither my brother or I can afford to buy the other out.
 
  #5  
Old 06-25-13, 07:27 AM
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Used to listen to Bruce Williams' show on the radio (don't know if he's still on or not) and that type of problem came up more than once. The short answer is, yes, you can bring legal action to force the sale.

on Mike's remarks.
 
  #6  
Old 06-25-13, 07:45 AM
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Great advice guys. I would never strong-arm by threatening to bring in an attorney but at the same time I would like some benefit from this generous gift. As it is now my brother and I have nothing. What I would like to be able to do, in a matter of fact manner, is let them know what the next steps are if they are not willing to work with us.

It could be an available funds issue but we have been very clear that we are willing to work with just about any monthly plan they can afford, and we have told them we have no problem with a 0% interest rate.

I am not sure what else I can do at this point.

Thanks again,
BWSwede
 
  #7  
Old 06-25-13, 08:53 AM
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I am sure that some of the options are going to vary from state to state. However, we are in a similar situation here with 60 acres. Its been passed from grandparents to children. Now all the children are gone & its down to grandchildren & in one case, down to great grandchildren. Its just getting worse.
Anyway, here in Louisiana, my understanding is, that even if ONE shareholder decides to sale, the whole 60 acres will be forced to sale. The other 8 people do not have any choice in the matter other than buying out the other shareholders if they choose to keep the property.
I wish each of the other share holders would be as generous with my two brothers & I as you have tried to be with your sisters.

Good luck & best wishes...
 
  #8  
Old 06-25-13, 10:45 AM
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Hi BW,
Just an opinion here. I've seen too many estates end up in family feuds and I don't think that is what the/your parents wanted. Proper planning would have includes other options, cash goes here, camp goes there. Lacking that, my advice is to forget the cash, for now. Remember, "it's only money". Family, on the other hand, can't be replaced and regardless of how your relationship is with the others at present, times can change. Maybe your parents were hoping the camp would hold the family together.

If camps in your area are doing what they have done here, it will only go up in value, especially if the economy returns a bit.

There may be another option, offer your interest to a third party. Just the potential confusion might be enough to convince them to buy.

Bud
 
  #9  
Old 06-26-13, 05:50 AM
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A lot of great advice here, thank you all for replying.

I wonder if our state is the same as Louisiana in that if one person what to sell the entire property must be sold (or bought out by the others). Do you recall what process is used in your state for this procedure?

We have suggested that we sell our shares to a third party. Initially trying to sell to someone they know and if that is not successful then open it up to anyone. They have not responded.

I understand the only money thing. The situation is currently unfair in that if we do nothing in the name of family harmony then my brother and I have nothing to show for the gift. If my brother, who would like to buy a house, and I continue to force the issue we will all end up with 1/4 the value of the cabin, in cash. If I push my agenda, how is that not fair among all parties?

Thanks again for the replies. I really appreciate it.

BWSwede
 
  #10  
Old 06-26-13, 07:33 AM
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Let me rephrase that a bit. I don't think that the other MUST sell, but if the one person wants to sell the property, he can force the entire sale.

For example, as it stands at this point, the property that we own has never been divided. Therefore we own "an interest" in a 60 acre tract of land. For example, I own a 1/3 of my fathers 1/5 interest in that tract (which in theory is 4 acres of my dads 12 acres) of the 60 acres.
Since it has never been surveyed & divided, I do not own a specific 4 acres inside that 60 acres. Therefore, if I sold you that 4 acres, you couldn't do anything with it to speak of. You cant farm it, you cant build a house on it, you can't mow it... why? Because you do not own a specific 4 acres. Its an "interest" within a 60 acre tract. Legally, I do not own 4 acres. I own 1/3 of my dads 1/5 interest (whatever that is).
Therefore I cant sell it to anyone because, who want's to buy property they cant do anything with? They don't even know where it is. You cant even use it for collateral on a loan to buy the property or anything else.. because... the bank don't know where it is.
Therefore, the legal system, the courts, see that you have no reasonable chance to sell without the whole group selling. So the court system decided (here in Louisiana) that if I want to sell & I want to push it, legally, I can make everyone else sell, so I can sell mine.
I bet your situation with the house is the same as mine, its an interest. You own a 1/4 interest in the house...equally.

Now after I said all that, let me say this, you CAN sell your 1/4 interest in the house. But who is going to do that? It could be a sibling or it could be anyone as long as they know its only an interest in the property & they are ok with that.
Actually, I bought one of my cousins 1/5 interest (12 acres) back years ago when I could afford to do so. But I already own property there & my intent, initially, was to buy as much of the property as I could one interest at a time. So, in short, yes you can sell YOUR interest alone, but you gotta find someone who wants to buy a 1/4 interest in a house that they cant, on the face, do anything with.... just like the situation your in now. No one can agree. Half can & half cant... so nothing gets done. No one wants to buy into that situation.

Hope this helps
 
  #11  
Old 06-26-13, 08:38 AM
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I've come across this situation a few times. Real estate is valuable, but hard to convert to cash quickly. Jointly owned real estate even more so.

Now, you've mentioned two goals here, which are actually separable and distinct:
(A) want out of the ownership and (B) cash out now.

Take a while to figure out what you need, what you want,
THEN talk to a local attorney about the legal alternatives to reach the goals.

There are three common courses of action
- selling your undivided share in real estate. This is generally going to be at a steep discount; fastest but least money.

- go to court to have the property split up. This is not really fast, can take months or years, even in situations when all siblings agree to sell.

- view this is a long term investment in real estate. Slowest but likely the most money.

As to the actual methods, contact a local attorney to guide you.

Sometimes you can sell your shares to the other siblings; either buy out over time. If it's owned free and clear, all 4 sign a mortgage for 50% of the value, two get the money up front, the others pay that off over time, with tax deductions.

I wouldn't rely on Louisiana law, it tends to be a bit of an odd ball as it is the only state in the union where the state law originates in French civil law / Napoleanic code. Anyway, most states have a legal action to partition real property and divide up jointly owned property. You can go to court, but when buyers figure out that the property is being sold because of a court order, they will likely go with lowball offers.


Check with a local attorney to see what your duties are regarding liability and taxes and upkeep of the property. In some situations, the ones using co-owned property are responsible for the upkeep, leaving the other siblings as silent partners who are not involved in the upkeep and use of the property; the silent partners get cashed out when the property is sold (hopefully after appreciating in value).


Hal

disclaimer- I'm an attorney, but I'm not YOUR attorney.
I'm not giving legal advice, merely trying to explain some of the basic legal concepts.
 
  #12  
Old 06-27-13, 05:56 AM
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Dixie,

Great explanation on why the legal system can force the sale if one interest wants to sell their share and the others don't want to purchase it. It makes perfect sense. Based on what Hal said about Louisiana law it looks like I better look into how our state settles such matters.

Hal,

Good advice. Thank you for sharing. I am not sure I understand why a person would take the sale of property to court if all the siblings agree to sell. I would think the property would be placed on the market as any other house would.

I would like to get a clear understanding of the next steps so I can lay them out in front of them to see if they change their position. I know that if I was on their side (and could not afford to buy other shares) and I had the choice to sell the cabin on the normal market or through the legal system at a steep discount, I would go the normal market route.

Thanks again guys. I really appreciate your time.

BWSwede
 
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