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  1. #1
    sewnutzcl1 is offline Junior Member
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    Renting Inherited Property

    What is the name of your state (only U.S. law)? Pennsylvania

    My father in law passed away in May, and his 5 sons are to share equally as stated in his will.
    3 of them want my oldest daughter and her family to rent-to-own the house, 1 doesn't want to be a landlord for long, and the 5th hasn't been contacted yet.
    My daughters husband wants in writing from all 5 that it is ok for them to rent-to-own, to protect them from being evicted in the future. I do understand his position. But my husband and brother-in-law (the executor) say this is more complicated than it should be and a lease should be sufficient.
    There is no mortgage on the house and my father in law had no other assets. Our plan is to rent to my daughter to keep the house in the family but their rent would go to the purchase price, and to set up an account the rent would be deposited in, that would take care of the taxes, insurance and upkeep of the property. This account would pay out to the brothers yearly, once the expenses are taken care of.
    None of the brothers are in a position to buy the others out and two of them don't live in Pa.
    Do we need all 5 to agree in writing or is a verbal agreement sufficient?
    If the verbal agreement is sufficient how should we word the lease?
  2. #2
    FarmerJ is offline Senior Member
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    Rather than lease to own why not consider a well written contract for deed by a local real estate atty. This way the couple can make actual payments to purchase the home. The contract would spell out every thing and could even be worded to include having the taxes and ins repaid in the monthly payments to the selling group so this way one they designate would see to it they are paid and distribute to the others their share. The contract can even have a balloon at some point say 5? 7? 10? years this way the couple is able to gain equity and every one can be bought out. Or the contract could even go longer. A local bank should be able to tell you what the payments would would be in a amortization table inc interest. The one drawback to a contract for deed is that if the buyer defaulted then the sellers would have to take them to court to have it broken. A contract for deed can also require the buyers to gain written consent to do any kind of renovations. It can be worded to require full pay off if the buyers wish to sell to another party. One of the trade offs is that the sellers would gain interest income for the risk of selling via contract for deed. Anyway all the pros and cons can be discussed with a atty and a well written contract for deed from a atty would be one way to please all. Try the links above to locate a real estate atty to consult with.
  3. #3
    sewnutzcl1 is offline Junior Member
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    Thank you. That is something they haven't considered yet, and I will tell my husband about it. But as I stated my father-in-law's house was his only asset aside from less than 10,000 in his checking account, most of which is paying his final expenses (utilities, 1 loan, & misc. fees). Also none of the brothers can afford an attorney, and my daughter cannot get a loan at this time (they've tried). They are trying to settle things as peacefully and inexpensively as possible, that's why they came up with the rental plan.
    So again I ask;
    Do we need all 5 to agree in writing or is a verbal agreement sufficient?
    If the verbal agreement is sufficient how should we word the lease?
  4. #4
    nextwife is offline Senior Member
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    Are there creditors that need to be paid? If so, estate assets need to FIRST be allocated to creditors. The home may then need to be sold outright, and the proceeds paid first to creditors, then the remained to the heirs in accordance with either the will or intestate probate. Is there a legally appointed executor who can actually enter into a sales agreement?
    Last edited by nextwife; 09-14-2009 at 12:37 PM.
  5. #5
    tranquility is offline Senior Member
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    There is no realistic "plan" here. While you keep asking the question you want answered, any answer would take pages and pages to explain so I won't. I'll just throw out some facts.

    The estate needs to be closed and the property appropriately distributed. The estate cannot stay open for the purpose of renting out the house. Tenants in common can rent out possession and share the "profits" with others. However, each has right of possession and can rent it out--with or without the other's agreement. Without a contract between the parties, the term "profits" is difficult to determine and there could be MAJOR problems which could cause the agreeing parties to be in breach with their renter. (Say three brothers rent to a person, the other two go to the house for naked dancing night. The renter may feel his possessory interests have been violated and sue the brothers who rented to them.) Contracts which of and concern land need to be in writing to be enforcable.

    CAN it be done? Sure. SHOULD it be done? No.
  6. #6
    sewnutzcl1 is offline Junior Member
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    Thank you Tranquility, you answered my question!
  7. #7
    latigo is offline Senior Member
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    I have to assume from the wording of your post in mentioning input from the executor that the estate is still in probate and as of now there has been no decree of distribution entered

    If so, what does the executor of the will have to do with the disposition of the home once it is distributed to the 5 children as co-tenants?

    The answer is nothing whatsoever.

    Nor does the executor have the authority to lease it from the estate to anyone. At least not under anything other than a month-to-month tenancy so as not to unduly encumber the property with a long term lease.

    He might even petition and obtain approval from the court to sell the property and distributed the proceeds between the heirs and thus avoid them of the legal nightmare of having five people end up owning it.

    But once the home is distributed as directed by the will, the five co-tenants must be in unanimous agreement as to what becomes of it. AND IN WRITING before anything becomes of it!

    Owning property in cotenancy is the worst way to hold title to land!

    Consequently it would be best for all five if they could all agree to sell it. But not tie it up indefinitely through a lease with option to purchase.

    But let’s say the cotenants all agreed to lease the home.

    What is to be done should the lessees be in default? With the owners scattered about the county and without anyone holding their power of attorney who is going to possess the authority and take the responsibility of terminating the lease?

    And if the the lessee records a lease with an option to purchase it would throw a cloud on the title.

    Let’s say one co-tenant holds out and won’t sign the lease but the others do. He could then move in with your daughter and her husband at any time. Why?

    Because each cotenant has an equal undivided ownership in the property as a whole unity and the equal right to use and occupy the property.

    For the brother-in-law to volunteer that “this is more complicated than it should be” indicates that he is not listening to his attorney as much as he “should be”.

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