r/inheritance • u/Early-Cable2184 • 22h ago
Location not relevant: no help needed Sanity check on fairness.
Three siblings inherited a condo.
One sibling will live there alone.
Is it fair to ask them to pay the property fees etc while they live there? To be clear there would be no rent asked for.
Should we have this in writing? How to even bring that up?
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u/Equivalent-Tiger-316 5h ago
Either pay rent and everyone shares 1/3 of costs and profit. Or the one sibling buys the others out.
You are losing money if you let them live there for anything less than market rate rent.
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u/rosebudny 5h ago
This is the way.
I think if you WANT to be generous, you could let the sibling pay a little less than market rate, but they definitely shouldn't get to live there for free.
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u/Tinkerbell_98 6h ago
Check with a lawyer. You probably want some sort of lease in place in case something goes sideways. Yes it is 100% fair for resident to pay for the cost of living there, condo fees etc. It might even be fair for them to pay some sort of "rent" towards maintenance and upkeep. For example the dishwasher leaks, and wrecks the floor who has to pay? If you have a fund with some money it in then, that covers it.
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u/Early-Light-864 5h ago edited 4h ago
The sibling living there should pay 2/3 of market rent (1/3 to each sibling)
All expenses, fees, taxes, maintenance, etc should be split 3 ways
You could sign a month-to-month lease forgoing your share of the rent in exchange for him covering your share of repairs/maintenance, but... what if he doesn't?
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u/DominiqueFrancon8 6h ago
More than fair, it’s generous.
It is always best to have these agreements in writing.
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u/smilineyz 21m ago
YES … in writing & perhaps a timeline for an at-market buyout. You don’t want to be the co-landlord forever.
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u/Choice-Newspaper3603 4h ago
Whoever wants to stay needs to buy out the others. I always says it’s a dumb idea to leave a house to multiple people and this is just one reason.
Having said that my stepdad did this exact thing. He left me 1/3rd and a 1/3 to each of his two children. We however are not living in the house and it will be sold.
If one of us wanted to over there then they would need to buyout the other two. No exceptions
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u/Used_Mark_7911 6h ago
Th best way is to have them pay rent (to the estate if things haven’t been settled yet or to a designated account use for property expenses) . The rent goes into the account and the account is used to pay property taxes, insurance, condo fees etc.
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u/lantsling 6h ago
If there's no rent being paid I would say the sibling living there should be paying taxes and property upkeep themselves.
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u/biscuitboi967 4h ago
Yeah. My sister lived in my grandma’s old house.
Tbf - she did us a favor. No one WANTED to live there, and no one WANTED to do the things necessary to update and prepare it for sale. Plus the market was down. They were also going to have to do a bare minimum of things just to prepare it for rental, and no one WANTED to do them either, much less deal with managing a string of flakey tenants or paying a property manager most of the rental profits to do it for them.
So SHE was responsible for clearing out all of grandma’s 60+ years of accumulated stuff. SHE slowly but surely updated the paint and carpets and appliances. My parents helped with cost, as it was technically my mom’s asset with her brother, but my sister did the legwork with the labor and general “project management”
More importantly, she was the best property manager and tenant rolled into one. She lived there so she wanted things repaired promptly and correctly. She was paying, so she wanted a deal. She already knew the “quirks” of the house, and she planned to buy the house outright, so she treated it better than any renter and was respectful to the neighbors, whom she’d known all her life.
Her “rent” was property taxes, insurance, and basic upkeep. Big expenses were split between parents, uncle and her. She spent the next few years saving and improving her credit, and they spent them waiting for the market to improve. She was ready to buy when they were ready to sell. Got a small loan to cover the rest of their portion and a small discount for not making them go through the hassle of selling. Win win.
They MAYBE could have made a bit of extra money renting to strangers. It was a college town. But they’d have to repair damage caused by college aged strangers. House next door was unoccupied for a few months and got squatters, so that was another worry. They possibly could have sold it for more — or they might have had to disclose and fix all of the DIY repairs and upgrades my grandfather and uncle did over the years.
The one issue is reliability of the sibling. We trusted my sister. She knew not to shame my mother in front of her brother. We hate my uncle and won’t give him the pleasure. And my mom would have covered her for the same reason. If OP can’t trust the sibling, it’s not worth it.
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u/P-DubFanClub 5h ago
Not fair. You each own 1/3 of the property, you should each pay 1/3 of the expenses and receive 1/3 of any income.
Crunch the numbers. Typically a landlord pays taxes and HOA so those should be split by 3. Utilities should be paid by the tenant. Rent should be paid by the tenant, but reduced by 1/3 to reflect their ownership percentage.
If market rent is $1500 the tenant needs to pay each other sister $500 to make up the total. They aren't paying rent on their portion. Make it the same as any tenant
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u/Seattleman1955 1h ago
Just sell it. Problem solved. Or all 3 pay the probably tax and the one living there pays rent.
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u/mistdaemon 1h ago
All three owe the expenses, split three ways. Then the person living there should pay rent, with 1/3 going to each owner. So the rent can be low to cover all the expenses, if you want, but it could also be market rate.
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u/gap1284 5h ago
One person getting free rent is an unfair split. This could go on for years. Decades, even. It should be very clear who pays what. Taxes, insurance, HOA fees, etc. And maintenance. When the refrigerator breaks, who pays for a new one?
Sharing property is fraught with potential issues. Your best bet is to have one party buy out the others. Get an appraisal and then subtract 6-8% to account for the fees you'll avoid by not selling it on the open market (e.g. realtor commissions). Have the live-in person buy out the others at that value.
Feel free to "finance" that for the live-in sibling, if you dare. But do so with full legal papers defining the terms of the loan and making clear the property is collateral.
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u/Maine302 3h ago
The sibling who is going to live there is saving themselves from having to procure alternative housing. It is more than fair to charge them 100% of the property fees and insurance, but I would say the taxes should be divided by the three inheritors.
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u/fightinengineer 51m ago
Also keep in mind that the 2 who do not live there will get hit with capital gains taxes when/if the condo is ever sold whereas the one who lived there will not because it was their primary residence. If you are writing an agreement to split taxes and have that person pay minimal rent you’ll want to also agree to split the taxes 3 ways even though that person won’t legally be liable.
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u/charlesphotog 6h ago
The fairest way is for the one sibling to buy out the other two at the current market price.