Inheriting a house from your parents alongside siblings is a common scenario. However dealing with inherited property in such circumstances can be complicated, particularly when one sibling lives in the property rent-free.
This article aims to address questions you might have in similar situations like: "Can I charge my sibling rent for living in our parent’s house?" and "Can I force a sale when my sibling is living in our inherited family home?"
My sister is living rent-free in the house we inherited. Does she have to pay rent?
Dealing with inherited property while grieving can be tough, especially with family dynamics at play.
If your sister lives in the inherited house rent-free, delaying or preventing its sale altogether, it may be worth discussing rent contributions with her. This arrangement can ease financial strain while maintaining ownership. However, it's important to remember that rental income over £1,000 is taxable.
You might also review your parent's will to determine ownership and residency rights.
If your sister refuses to cooperate, a court order for sale may be necessary, though it's complicated if you jointly own the property, and could lead to a rift in your relationship.
Essentially, in this situation, talking to your sister is the best course of action; clearly explaining your concerns and proposed solution. If that doesn't work, other legal remedies may be available depending on your situation.
How should inherited property be split between siblings?
When it comes to dividing property, there are two main ways:
Here, all tenants collectively own the entire property. Consent from everyone is required for any sale and proceeds from a sale are divided equally among them.
If one tenant passes away, their share automatically transfers to the surviving joint tenants.
Tenants in Common
As tenants in common, each tenant owns a specific percentage of the property (i.e. 50/50 or 60/40).
Subsequently, each can choose to sell their share or leave it to someone in their will. When the property is sold, each tenant receives a percentage of the proceeds based on their ownership share.
In cases of siblings inheriting from both parents, it's common for them to inherit equal shares of the property. However, this may vary in families with step-siblings or half-siblings, where the division could be different.
What are my options?
Here are your options if you inherit a home with your siblings:
Keep it as a holiday home and rent it out when not in use.
Agree to sell the property and divide the proceeds.
Agree to rent the property and share the rental income.
Agree for one sibling to buy out the others.
Have one or more siblings live in the property.
Initiate a sale through an order of sale.
If you decide to sell a property as joint tenants, you'll need written consent from all tenants, and the sale proceeds are divided equally among them.
In the case of one joint tenant's death, the property automatically passes entirely to the other(s) through the right of survivorship.
If joint tenants disagree on selling the property, the sibling wishing to sell must apply to change the ownership to tenants in common, known as severance of joint tenancy.
Tenants in common typically split ownership 50/50, but the share can vary based on the terms of your parent’s will or estate, for example, if they died without making a will or the property was left in trust.
Can you buy out a sibling’s share of an inherited property?
Yes, you can buy out your sibling's share of an inherited property to keep it in the family. Here's how:
Determine how the property is owned, either jointly or separately.
Negotiate a fair price for buying your sibling's share.
Gather the money needed, either from savings or by getting a mortgage.
Sign the necessary legal documents, which may require assistance from a solicitor.
By following these steps, you can buy your sibling's share and maintain ownership of the property.
Can I force the sale of the property when my sister is living there?
If you want to sell an inherited property but your sibling is living there, you may consider forcing a sale through a legal process called an order for sale.
This doesn't immediately require your sibling to sell their share, but it starts a process that could lead to a court-mandated sale.
Before going to court, however, try to reach an agreement with your sibling. You or your solicitor can send a letter to initiate this discussion if communication has broken down.
If subsequent negotiations fail, you can ask the court for an order for sale. They will consider factors like the wishes of the deceased, the property's current use, and the needs of any occupants, especially minors.
The Trusts of Land and Appointment of Trustees Act 1996 governs these proceedings. The court can order a sale if it's deemed necessary.
If there's a child under 18 living in the property, the court will ensure they have suitable housing if eviction occurs.
Advice about your rights
When dealing with a sibling living in your childhood home, things can get complicated. Whether you're considering collecting rent to ease financial strain or facing resistance to selling the property, legal guidance can be invaluable.
At Lawhive, our property solicitors can clarify your position and help you understand your options.
Contact us today for a free case assessment and expert advice tailored to your situation.