What is the name of your state (only U.S. law)? Oregon
fall 2012, I suggested to my parent and sister that we jointly purchase a rental property in Oregon (each entity would have 1/3 ownership). I had previously purchased a duplex which was turning out to be a good rental property and thought the additional purchase would be good for all of us. After selecting a property to purchase, my sister revealed that she hadn't filed taxes in several years, but was going to work on getting that done. Due to the possibility of a tax lien, my parents and I were reluctant to go into this deal with her, but tentatively agreed that she could be a silent partner until she settled her tax issues.
Just as this was happening, my father was diagnosed with cancer which later proved to be terminal. We closed on the property in Sept. 2012 with my parents and I each owning half. My sister had given my parents $22,000 as her estimated portion of the down payment, although it turned out that her 1/3 share would have been much more. In March 2013, my father was in his last days and was urgently trying to settle his financial affairs. He wanted to put my parents property in a living trust and insisted on doing that immediately. At that time, my sister still had not settled her tax issues and my father stated it was now "impossible" to make her a partner. I protested this but he insisted and I felt I had to respect his wishes. Also, my father was a lawyer and I assumed he had good legal reasons for making this decision. We were all in a state where none of us were probably thinking well.
Because I was now a half-owner, I had to provide additional funds to my parents since I had previously only paid them 1/3 of the down payment. This was difficult for me as I didn't have a lot of cash at the time, plus had many expenses related to my father's illness.
He passed away in May 2013. My mother was not in any condition to deal with financial matters at the time and although I offered to tell my sister about the house deal, my mother insisted that she would do it since she didn't want me to get the blame (my sister and I don't have the best relationship, in part due to her anger management issues). My mother was then reluctant to broach the topic because every time she tried, my sister would berate her and have a fit of anger. Finally my mother told her straight out that she wasn't a legal partner and attempted to return her $22,000 plus an additional $6,000 to compensate her for the trouble. My sister tore up both the checks and was extremely angry with my mother, and refused to accept this decision.
At this point, what recourse do we have. Neither my mother nor I feel comfortable with my sister as a business partner at this point, plus she still has pending tax issues. Also, she would have to put in more than $22,000 even as a 1/3 investor, plus the house is now worth more due to accrued equity and and an "emergency" fund in a bank account. My mother and I are not spending any of the funds the house generates. We have also been told by several realtors that the house is now worth about $75,000 more on the market.
I've offered to sell my sister my half share in the house at the past valuation plus any accrued assets and if she pays all transaction costs. I'm willing to forego future profit just to get this settled.
So, does any one have any reasonable options for solving this?
Also, does my sister have any legal standing in claiming to be a 1/3 investor even though there was never any legal written agreement about this.
Thanks for any help with solving this terrible issue.
fall 2012, I suggested to my parent and sister that we jointly purchase a rental property in Oregon (each entity would have 1/3 ownership). I had previously purchased a duplex which was turning out to be a good rental property and thought the additional purchase would be good for all of us. After selecting a property to purchase, my sister revealed that she hadn't filed taxes in several years, but was going to work on getting that done. Due to the possibility of a tax lien, my parents and I were reluctant to go into this deal with her, but tentatively agreed that she could be a silent partner until she settled her tax issues.
Just as this was happening, my father was diagnosed with cancer which later proved to be terminal. We closed on the property in Sept. 2012 with my parents and I each owning half. My sister had given my parents $22,000 as her estimated portion of the down payment, although it turned out that her 1/3 share would have been much more. In March 2013, my father was in his last days and was urgently trying to settle his financial affairs. He wanted to put my parents property in a living trust and insisted on doing that immediately. At that time, my sister still had not settled her tax issues and my father stated it was now "impossible" to make her a partner. I protested this but he insisted and I felt I had to respect his wishes. Also, my father was a lawyer and I assumed he had good legal reasons for making this decision. We were all in a state where none of us were probably thinking well.
Because I was now a half-owner, I had to provide additional funds to my parents since I had previously only paid them 1/3 of the down payment. This was difficult for me as I didn't have a lot of cash at the time, plus had many expenses related to my father's illness.
He passed away in May 2013. My mother was not in any condition to deal with financial matters at the time and although I offered to tell my sister about the house deal, my mother insisted that she would do it since she didn't want me to get the blame (my sister and I don't have the best relationship, in part due to her anger management issues). My mother was then reluctant to broach the topic because every time she tried, my sister would berate her and have a fit of anger. Finally my mother told her straight out that she wasn't a legal partner and attempted to return her $22,000 plus an additional $6,000 to compensate her for the trouble. My sister tore up both the checks and was extremely angry with my mother, and refused to accept this decision.
At this point, what recourse do we have. Neither my mother nor I feel comfortable with my sister as a business partner at this point, plus she still has pending tax issues. Also, she would have to put in more than $22,000 even as a 1/3 investor, plus the house is now worth more due to accrued equity and and an "emergency" fund in a bank account. My mother and I are not spending any of the funds the house generates. We have also been told by several realtors that the house is now worth about $75,000 more on the market.
I've offered to sell my sister my half share in the house at the past valuation plus any accrued assets and if she pays all transaction costs. I'm willing to forego future profit just to get this settled.
So, does any one have any reasonable options for solving this?
Also, does my sister have any legal standing in claiming to be a 1/3 investor even though there was never any legal written agreement about this.
Thanks for any help with solving this terrible issue.
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