real estate deed

[annie988898]

My uncle bought a house in San Francisco 20 years ago for $230,000. And his sister paid $11,000 to help with the down payment. And she has not paid a penny ever since and she always occupies a bedroom with her stuff even though she never lives in the house. The house has two bedrooms plus an added bedroom from the garage. Now the house is worth about $500,000. Now, his sister wants to get $100,000 and go back to Hong Kong. This is like extortion. I think, since the house is 2.2 times of the original value, she should be entitled to only $24,000. And since she always occupies the bedroom for 20 years, does she need to pay some kind of rent and deduct from the $24,000? How much money should my uncle pay her to have her name eliminated from the deed? If my uncle goes to court, how much court fee does it cost? Is it small claims court? does he need to hire a lawyer?

A million thanks for your help!

 

[Mass_Shyster]

If Sister's name is on the deed, chances are she is legally entitled to an undivided interest in the house. She can use it any way she chooses, including as storage for her personal belongings, and is not required to pay rent for her own property.

But... In order to cash out her half of the value, she would have to file in court to have the house sold (petition to partition), with the proceeds divided among the owners. At this point, the court may divide the proceeds according to the contributions made by the owners, leaving her with 4.7% of the proceeds, since she contributed 4.7% of the original purchase price. This is assuming the mortgage is completely paid off. If not, more calculations are necessary.

 

[annie988898]

Thank you so much for your reply! So if the sister goes to court and petition for a sale, does the court actually order to sell the property? My uncle already paid off the property and he wants to live in the property forever. I think the court should just calculate the proceeds on paper, 4.7% of the current appraisal value of the house, and not actually have to sell it. Do you agree?

My uncle really does not want to go to court with a relative. so is there any way to avoid going to court?

a million thanks!

 

[justalayman]

=annie988898;2885562]Thank you so much for your reply! So if the sister goes to court and petition for a sale, does the court actually order to sell the property?

yes. They will auction the house to the highest bidder, take the fees and court costs from the proceeds and divide the remainder as listed on the title of the home.

My uncle already paid off the property and he wants to live in the property forever. I think the court should just calculate the proceeds on paper, 4.7% of the current appraisal value of the house, and not actually have to sell it. Do you agree?

no. Unless there was some contractual agreement that the sister would be entitled to 4.7% of the value of the home, she is entitled to the share as described on the deed. I would guess the owners are simply listed as equal shareholders. As such, she would be given 1/2 of the proceeds.

My uncle really does not want to go to court with a relative. so is there any way to avoid going to court?

sure. all they have to do is come to an agreement that would eliminate the need to go to court.

 

[FlyingRon]

It's hard to assess a market value without selling the item. If the parties wish to agree on a valuation, they should do so well before court.

You understand that who paid off what is immaterial to ownership. The deed (absent any words to the contrary) gives equal shares to all the owners. Sister is entitled to half.

Of course, onus is on sister to sue him and he can certainly make counter arguments.

O

 

[annie988898]

The sister only paid $11,000 and now she is entitled to $250,000 since the deed does not specify a percentage. This is so outrageous. Is there any situation or reasons for the court to use fairness and justice in this case? I mean, It is only fair for her to get 4.7% of the current market value, not 50% of the market value. She has not paid a penny other than the $11K she contributed to the down payment. What do you think is the reasonable amount that the sister is entitled in court?

Thank you so much for your help!

 

[justalayman]

many deals that are similar to their situation are intended to allow both titled owners to be equal owners. There is often payment in other ways to make the investment equal and is not reflected in the initial input of the purchase.

What do you think is the reasonable amount that the sister is entitled in court?

based on what you have stated; 50% of the selling price. If the guy had intended sis to have only a 4.7% share of the home, he should have titled each party's interest to reflect that. He willingly listed her as a half share holder of the entire value so that is what he is stuck with.

 

[annie988898]

So if my uncle contributed $30K to the down payment and the sister paid $11K to the down payment, does that still make them equal owners if they did not specify a percentage on the deed? My uncle paid the whole mortgage, taxes, property taxes, maintenance, utilities and any and all things for the last 20 years, but his sister does not pay a penny other than the initial $11K. Shouldn't she be entitled to less than 50%?

Thank you very much for your advice! It really enlighten me a lot about the laws.

 

[justalayman]

he can argue that she is not entitled to an equal share of the proceeds of a sale and may even be successful but as it stands, he is fighting an uphill battle. He agreed to list her as an equal owner on the title and he has to prove that she did not live up to an agreement that would allow such. Since I have no idea to what was agreed to upon the purchase of the property, it would only be speculation to say that he had a right to claim she is not due a 50% share.

 

[justalayman]

I read your other post but will respond here as you should not start multiple threads on the same subject.


while you claim he paid for everything, you fail to mention that he also lived in the home the entire time while she paid for housing elsewhere. If you want to play the "she owes him for this or that" game, don't forget the value of the housing he enjoyed that the sister did not.

You also have failed to mention any agreement or conversation regarding each parties investment at the inception of the purchase. What, if any, agreement was there?

 

[annie988898]

There is no conversation between them and my uncle assumed that he is entitled to the whole house since he pays everything except the $11K initial down payment. The sister also occupies a bedroom with all her stuff. My uncle, his wife and his two children had to live in the other one bedroom the entire time. My uncle has no problem paying her 4.7% of the sales proceeds to her as she contributed 4.7% of the original purchase price, but $100K is almost 5 times the reasonable amount. Can you tell me how the court will handle this? and what is the reasonable amount the sister should get? Thanks!!!

 

[justalayman]

well, if you want to be fair, try this:

she loaned him $11,000 20 years ago. If you consider that as a loan with a 10% rate of interest compounded annually, the total amount owed is $74,002.50. I would see that as a reasonable payment. Offering anything else would be an unfair treatment of the sister as she could have invested the money rather than loaning it to the brother and earned at least that much.

 

[annie988898]

If that is the case, the house should be worth $1.6 million. That is why a lot of people realize that renting is a better option than owning. After spending lots of money on a house, many people wish their properties can stay above water.