Stop me if you’ve heard this one before:
“Last year I bought a house with my boyfriend. We broke up and now he refuses to pay the mortgage or sign the house over to me. Since I am paying the mortgage I can make him get out, right?”
Or maybe you’ve heard this one…
“Mom died several years ago. She left her house in Gloucester to me and my brother. My brother lives in the house rent-free; he doesn’t even pay the real estate taxes! I could really use the money right now. Can I make him sell the house? Can I at least sell my share?”
There are hundreds of variations for these stories, but they all ultimately come down to the same two facts:
1. There are multiple owners of a piece of real estate – either voluntarily (as in a purchase) or involuntarily (as in an inheritance); and
2. The owners simply cannot agree on what to do with the property.
Sadly (but typically), it is only after this disaster has occurred that one of the owners calls a real estate lawyer (usually in exasperation) to find out how to get out of this mess.
When first presented with any of these scenarios there are a few pertinent facts that need to be uncovered to determine the options available to the owners:
1. Was the property purchased or inherited?
2. How many owners are there?
3. Are the owners: alive and over 18 years of age? Married? Competent?
4. Is there a mortgage on the property?
5. And (perhaps, most importantly), what is the desired outcome?
Depending on the facts uncovered, some possible options for the owners include:
1. Divide the Property in Kind. In this day and age of condominiums, townhouses and subdivisions (oh my!), cutting the property into equal parts and dividing it among the owners is typically not a viable (or even desirable) option.
2. Buy Out the Other Owners. One or more of the owners can buy out the interests of the other owners if they are all willing (and more importantly, able) to do so. If all of the owners are agreeable, the owner buying out the other interest(s) will usually need to obtain a mortgage to have available the funds necessary for the buyout. Talking with a knowledgeable mortgage lender will typically reveal both “purchase” and “refinance” opportunities.
3. Alas, if neither of the above options is feasible, then the owners might just be in a perfect position to have a lawsuit filed with the Circuit Court (in the jurisdiction wherein the property lies) asking the Court to order the property sold and the proceeds equitably divided among the owners.
To this point we have limited the discussion to some of the options available to owners for “post-disaster relief,” but now let us consider the best possible “pre-disaster” advice:
For the Multiple Ownership PURCHASE Scenario: Consult a real estate lawyer BEFORE purchasing real estate – especially if you are purchasing that property with anyone that is NOT your spouse. This recommendation rings true not only for a boyfriend/girlfriend (or fiance/fiancee – sorry folks, this still means “not married” in Virginia), but also cousins, brothers, mothers, and life-long friends too.
For the Multiple Ownership INHERITANCE Scenario: Again, consult a real estate lawyer at your earliest (reasonable) opportunity after learning of the inheritance to determine what rights and obligations are yours. By the way, keep in mind that a properly executed Last Will and Testament can also go a long way in keeping peace in the family.
Whatever the circumstances, seek proper legal advice from a local real estate attorney BEFORE taking the leap into home ownership to avoid the many legal disasters that could otherwise result.