What to Do With a Jointly Inherited House

By Larissa Bodniowycz, J.D.

What to Do With a Jointly Inherited House

By Larissa Bodniowycz, J.D.

An inherited property can cause conflict between owners. For example, often, parents leave their house to their children jointly, but the children then disagree on what to do with the property. One child might not want to pay taxes on the house or may want fast cash and sell the house. One child might want to rent it out while another child might want to live there and have all the children maintain joint ownership. What happens to the house depends on the expressed wishes of the person who passed away and the desires of those inheriting the home.

Three women looking at notebooks

Directives from the Will

During their lifetime, a person will often put instructions in their will for how they want the beneficiaries to manage the property. Review the terms of the will prior to taking action. A will might express a decedent's intentions to have one child live on the property. In this case, it's much harder to sell if the child residing in the house doesn't want to move out or sell the property. The will's intentions must be followed during the probate process.

A decedent may also specify ownership shares in a will, such as 60 percent to one child and 40 percent to another, or equal shares to each child. If the decedent died without a will and does not have a surviving spouse, the house will likely go to the decedent's children in equal shares.

Selling or Renting

If all joint-owners decide to sell the house, the process is relatively straightforward. They split the proceeds with the other owners in proportion to their share, after accounting for the costs of the sale such as broker fees, commissions, and other expenses.

Conversely, they can also rent out the house and split the proceeds. An owner in charge of managing the rental may be entitled to a larger share of the rental income as a result. Alternatively, a third party hired to manage the rental maintains an equal split between the owners. Regardless, a written agreement about the rental arrangement between the owners should clarify any potential disputes that may arise at a later date.

Partition or Buyout

If all owners cannot agree on a solution, they can go to court and request a partition sale. The court will divide the property into portions representative of each owner's interest in the property. The court will then force the sale or auction off the house and divide the proceeds between the beneficiaries. The court may appoint a third party to manage the sale.

Partition is never an ideal option because a forced sale typically results in a reduced sale price and potentially significant associated legal fees. A partition sale of jointly owned property is going to get the owners far less money than if they just sold the house on their own with all the owners' consent.

Another option is to arrange a buyout. If one owner wants to keep the house, and the other owners want to sell, the owner who wants to keep the property can buy out the other owners' shares. This is a better outcome than a partition because all parties get what they want and the owners can avoid going to court.

The buyer will need to come up with half the value of the house (or whatever percentage the selling owner has), and can then transfer the deed to his or her name alone. The buyer can obtain a mortgage to finance the buyout, or refinance an existing mortgage on the property.

Although it may take some time and discussion, regardless of what you want to do with your jointly inherited house, there is a legal solution.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

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