Title on home owners insurance when 4 siblings own the house.

[adjusterjack]

It sounds like it has the potential to be a can of worms if there were ever a claim.

It's already a can of worms.

I want insurance. How important is all of this?

Very important. If somebody sues you personally for something that happens at the house and the insurance company says "No coverage for you" you are up the creek, big time.

I can't answer any of your "why" questions.

The situation between you and your brother is dysfunctional and your options are limited to bad and worse.

1 - Find yourself an independent agent and buy yourself a policy. If you don't care what happens to the property just buy a liability policy in your own name for your own protection against lawsuits.

2 - Force the sale of the property through a partition action. You'll need a lawyer. You'll pay a lot. Your legal costs may exceed whatever your share of the proceeds will be.

3 - Quitclaim your share of the property to your siblings and walk away from the property and them. They are already lost to you.

 

[HRZ]

THere are two other issues :

1. An empty house may actually violate your insurance coverage ..and leave you stranded if anything happens.

2. Odds are if you own a share of the place you are legally entitled to go make use of it ....check the point and put your iron pants one.

 

[HRZ]

Partition actions may be costly in terms of a low price when the smoke clears Local,practices may vary ...you probably get the legal,bill. Ask about

IN the meantime as owner, why not simply make use of the property...sure to fire up others!! You may have unilateral right to just go do it!

 

[Reseeker]

“2 - Force the sale of the property through a partition action. You'll need a lawyer. You'll pay a lot. Your legal costs may exceed whatever your share of the proceeds will be”.

Thanks Jack,
“Force the sale of the property through a partition action”.
My share of the house is worth about $175,000 (total about $700,000). Based on this, do you think it would be worth it? Do you know if I would be responsible for all the costs? Or would it be shared with other owners at all? How much would you guess it would cost? Do you know how long it would take? Are the costs fixed (like appraisal, court fees)? Or can they vary a lot?

 

[Reseeker]

“IN the meantime as owner, why not simply make use of the property...sure to fire up others!! You may have unilateral right to just go do it!”

Thanks HRZ,
The Grant Deed says “tenants in common”. So, I think we all do have the right to use all of the space. The house is being used like a garage—not by me, I don’t need storage or space. If I don’t do the partition for sale (or possibly convince them to buy me out), it is possible that we might transition to renting the house out. None of us have ever been landlords, so I don’t know how that will go. The value of property is going up in this area, so if we rent it, that might make me want to hang on a little longer & see if it is worth it—based on the rental income and property appreciation.

 

[Zigner]

Unfortunately, since it seems that the four siblings cannot avoid bickering about this, your situation likely calls for an attorney.

 

[LdiJ]

We currently have a residential insurance policy that is going to convert to a Landlord policy when it expires. I was told by the agent that it can be only in one person’s name unless we have a partnership—then the policy can be in the name of the partnership. Is this “one name” standard? I don’t think we all will agree to a partnership. What effect does “one name” as the named insured (with the other 3 as “additional insured”) have on the other owners who are listed on the policy as “additional insured”. What rights do they give up? I was told that the one NAMED insured “owns” the policy, is responsible for seeing that the premium is paid, makes decisions on the policy. All 4 owners have always paid 1/4 of the bill.
This “one owner” has been a huge problem with the current residential insurance policy. I have been told that the policy should have been rewritten when the 4 siblings inherited the house, but it wasn’t. I believe that the existing policy has been like an ongoing conversation with my brother (who was the executor) & the agent & that my brother was able to add endorsements at will (that is how he restricted my right to hire people to work on the house & maintain workers compensation insurance). Since we are all equal owners, I am saying that this is “undue influence” & have convinced the insurance company to rewrite the policy, since my brother removed the propane tank so the house has no heat or hot water & is being used like a garage. The relationship between people is not good at this point (except the relationship between the agent & my brother).
So, I called the agency (above the local level) & was told that once we agree to the terms of the policy, we can have it written into the policy that there are no provisions for changes going forward unless we all agree. This seems like it would work to protect the rights of the people who are listed as additional insured. I’m wondering what your thoughts on this might be.
If we can’t agree on a partnership, is there anything more I can do other than get my attorney to review it before it is finalized, do what I can to see that my interests are represented & request that there be no provisions for changes going forward unless we all agree to it?
Should I look at other insurance agencies? Or are these limitations on titling the policy (one name as named with others as additional OR partnership) standard? Can I honestly be treated fairly at this point considering the cozy relationship my brother has with this agent?

I do not see how you can avoid a partnership if you are going to be renting out a property owned by all of you. It would be a tax nightmare, otherwise.

 

[Reseeker]

“It would be a tax nightmare, otherwise”.
Thanks LdiJ. That is a great argument for partnership. I never thought of those consequences.

 

[HRZ]

If you own it , so,why not rent it out....you may need to split profits with other three owners.....but rock thier boat ?

 

[Reseeker]

A "Named Insured" can be one or more people and/or entities. When the "Named Insured" on the dec page says et al there is generally an endorsement form attached to the policy that lists all of the "Named Insureds."
Thankyou Jack, I have been given a “sample policy”. I was told by the agent that any endorsements are like my brothers bank account and that I have no access to them. But I know that the other 3 siblings are listed as “additional insureds”. What is the difference between named and additional named? Can who’s name appears on any check be changed by my brother by endorsement to only include himself? One person at the insurance agency told me the any check for a claim would be written in all 4 names. But her boss, later told me it would only be written in the named insured (without the 3additional insured names on the check). Is it possible that my brother could change this by endorsement to his name only? Now that the policy is going to be converted to a Landlord policy when the residential policy expires, my main concern going forward is to ensure my interests are met in the new policy. How can I understand all this, when the agent seems to be only representing my brother? Is partnership the only answer? Also, I recently learned from LdiJ that anything other than partnership would be a tax nightmare.

“Does the insurance policy list your trust as a "Named Insured"? Of course, you have no way of knowing that.”
Jack, I have been added as a trustee of my Revokable living trust, but I was told that they don’t insure trusts. I now understand that I need to add my successor trustee (my child) as an “additional insured” to the policy so that in the event of my death or incapacity, my child is on the policy as an additional insured. The insurance company has stated that the policy should have been rewritten when the siblings inherited the house & they are going to rewrite the Residential Policy to a Landlord Policy when the current term expires. So, I believe i can correct it at that time to name my child as an additional insured in the event that I am no longer able to be trustee of my living trust.

 

[Reseeker]

If you own it , so,why not rent it out....you may need to split profits with other three owners.....but rock thier boat ?

HRZ, we are in the process of getting the policy rewritten to a Landlord policy. Right now, I am trying to understand how the new policy should be written in order for their not to be any undue influence favoring my brother. In the existing policy, an endorsement is there restricting my right to maintain workers compensation for anyone that I hire to work on the house. I want to avoid this, or any other favoritism in the new policy. I read a partnership is the only way.

 

[HRZ]

Have you tried to rent it out ? WHy not ?

 

[Reseeker]

If you own it , so,why not rent it out....you may need to split profits with other three owners.....but rock thier boat ?

HRZ, that is the plan for the future—to rent it out. The residential policy will be converted to a Landlord policy at the end of the term. I was of the understanding that we all need to agree in order to rent. But the insurance company has said they think the policy should convert to a Landlord policy & they want someone living in it. So, I believe they are all going to go along with it.

 

[Reseeker]

It's already a can of worms.
The situation between you and your brother is dysfunctional and your options are limited to bad and worse.

2 - Force the sale of the property through a partition action. You'll need a lawyer. You'll pay a lot. Your legal costs may exceed whatever your share of the proceeds will be.

3 - Quitclaim your share of the property to your siblings and walk away from the property and them. They are already lost to you.

Hi Jack, do you have any idea how much a partition action might cost? My share is worth $175,000-$200,000. So that is too much money for me to quitclaim away. I agree, it is very dysfunctional.

 

[HRZ]

check with your personal lawyer...I am NOT of the understanding it requires agreement among owners. to rent it out ...btw sitting empty for years will take forever to make up economic loss ...not to mention uninsurability risk of empty place ...and as a distant problem, the paper loss deductibility for income tax purposes may be up for debate with IRS if it's not in service Somebody rates an F at Economics....yes, I've held property waiting for an upturn in market ...but in hindsight my conservative stock market picks did better and cash out of real state would have been better ...