Ask a real estate pro: I want to rent out inherited property, but sibling wants to sell. Now what?
Q: My sister and I inherited our father’s townhouse when he recently passed away. We get along OK, but not great. I think it would be a good idea to rent it out, but she is still not sure and may want to sell it instead. Do you have any advice on how to proceed? — Robert
A: You have several paths ahead of you. The best options involve you working together with your sister.
You can decide to cooperate to sell the property, or she may agree to rent it out. In either case, sit down together and work out a game plan.
If you are going to sell it, agree on the significant terms in advance. Decide who will take the lead with the real estate agent and deal with prospective buyers. Discuss how you will deal with expenses when selling the property, such as ongoing association dues and necessary repairs. The townhome will likely need to be spiffed up to get the best price, so decide who will work on that, too.
If you decide to keep and rent the property, you should agree to many of the same issues. Talking through the plan is a great start, but it is best to write things down. A lawyer can help you prepare a “joint-ownership agreement” and help you agree on how you will deal with owning a home together.
Besides dealing with the tenant and making repairs, try to work through the money issues like how rent will be collected and shared and how much to hold in reserve for maintenance. You should also discuss what will happen if one of you does not want to be a landlord anymore.
If more than one person owns real estate, any owner can force its sale even if the other owner wants to keep it. The easiest way to deal with this would be to buy your sister’s half from her. If necessary, you should be able to get a mortgage to buy her out.
If you cannot do this, cooperating with the process is likely in your best interest.
Push comes to shove, she can force the property’s sale by filing a “partition” lawsuit, causing legal expenses to eat up some of the proceeds.
Board-certified real estate lawyer Gary Singer writes about industry legal matters and the housing market. To ask him a question, email him at gary@garysingerlaw.com, or go to SunSentinel.com/askpro.