Bequeathed house dispute, auction or buy out other party.

I can see now after the 3 recent appraisals my offer was low, but he wont respond, state what he wants. Im not goin to keep increasing my offer just to get a response from him. hes got to step up and say something... my mind is a mess...
I'm a little confused by the vitriol and accusations of "greed" being dished towards the brother.

I wonder how the responses on this thread would've panned out if we'd had the following OP...

"Dad left his house to me and my brother. I'm not interested in the house but my brother wants to buy out my share. He's presented me with an embarrassingly low offer - I don't know whether he thinks he can pull the wool over my eyes because he knows more about property than I do or whether it was an honest mistake.

I just want it to go to auction so I can get a fair market value, whereas my brother seems keen on negotiating a price between us. I don't have confidence that I'll get a fair price in a closed negotiation with my brother. Am I within my rights to request it is put to auction?"
Raphael, I can understand your emotional connection, but the brother has a legitimate right to protect his interest. In light of a low offer (whether intentionally low or otherwise), he's adopting a perfectly reasonable position IMHO.

There's no obligation on him to negotiate with you or to present you a price that he'd be happy with - in fact, both of those things may be working against his best interests of getting a fair market price for his share of the property.
 
Piston, yes there is an outside influence whispering in his ear.

When he stares at me blankly, and wont respond, I can see that he doesnt know what to say, as shes not there to tell him what to do. I could start a whole new thread on her. :eek:
 
Seen it many times.
I would'nt rule out "external" influences either.
Spouses have a habit of ear chewing in these circumstances as well.
I also agree on the significance of the "totem pole" to most people.

You've obviously been down this track as well.


I was going to mention that, but thought better of it, as I am that "outlaw", instead of the inner purple circle of the "in-laws" in our situation.


I cannot explain how frustrating it is, when confronted with a property split up arrangement that is so simple to solve when it is the subject that you deal with every day of your life, and you are forced - via the totem pole - to be dictated by people who have not a jot of experience and no clue what they are doing....but think they do.


Unfortunately for us, we are the youngest couple but one, and because my wife is a lady, is gentle and a "rescuer or peace-maker", she firmly sits right down at the very bottom of her family's sibling totem pole. That pecking order has been established and cemented for some 40 years....it ain't gonna change.


What doesn't help is that the elder siblings who sit up the top of the totem pole have absolutely no clue or experience with property dealings, the law, financing or anything to do with estate planning. It's comical for me on the outer to watch them fumble and flounder whilst holding onto their usual seat of power and more importantly "setting the agenda", when they have no clue what they are doing.


The stumbling block they are constantly facing is deciding what mechanism to use to value the assets that they all agree on.


Where they are going wrong is trying to work out / assume the numbers first, wait for a sworn valuation to come in and then with no evidence say "That's rubbish - I don't agree" then decide on a mechanism that suits them the best and gives them the higher figure in the split up.....rather than treating it like a standard Tendering process, whereby the mechanism and process is all upfront and agreed, and the very last thing you do is open up the valuations, EOIs, Offers to Purchase etc and let the numbers go through the agreed process, eg average of 3.


As they refuse to agree the mechanism upfront, they have wasted about 7K on valuations thus far and are likely to waste a whole bunch more as they want to see the numbers before accepting them. Preconceived - but ill informed numbers in their heads based on no factual evidence are ruling the show.


Anyway, it's tearing this family up. For the first time in 40 years, the lady down the bottom of the totem pole is finally standing up and being counted.....because of her experience and knowledge in the property field....and I can assure you that the siblings at the top of the totem pole do not like it one little bit, and have already accused her of "tearing the family apart" for wisely going against their already pre-determined agenda.
 
Bro would go to him when he needed money. dad bailed him out 2 or 3 times that i know of.

For your sake I hope you don't end up in court as the only winners will be the lawyers.

If you do happen to end up in court I believe that the fact that you bother has previously financially gained will be taken into account so it is in your interest to determine the extent of the financial assistance.

Similarly, as another poster has mentioned, the court can also decide against you on a 'need' basis - you have plenty of assets brother has none etc. and adjust the 50:50 your brothers way (another reward for not doing anything his whole live)

I would suggest that for expediencies sake you agree to put the property to auction and buy the other half then.

Unfortunately, I feel that this could still not be final for exactly the story as per Dazz's post.

The parties will not be happy as it didn't reach the expected price and refuse to sign the contract or what happens if it gets passed in etc, so many possibilities even in an auction situation.

Cheers
 
Similarly, as another poster has mentioned, the court can also decide against you on a 'need' basis - you have plenty of assets brother has none etc. and adjust the 50:50 your brothers way (another reward for not doing anything his whole live)

Cheers
This will only be a possibility if the will is challenged - which is not occuring here (yet?). Family Provision Act.

This matter, as Raphael has indicated, has nothing to do with the estate. Just think of it as a dispute between two people who each own half a property and cannot come to an agreement on how to sell. Neither one can force the other, hence the Supreme Court action.
 
In a casse of joint ownership as you and your brotherw ill have after the trustees transfer the property either owner can apply to the court for an order to appoint trustees to sell: Section 66G conveyancing Act

66G Statutory trusts for sale or partition of property held in co-ownership

(1) Where any property (other than chattels) is held in co-ownership the court may, on the application of any one or more of the co-owners, appoint trustees of the property and vest the same in such trustees, subject to incumbrances affecting the entirety, but free from incumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition.
(1A) Subject to this section, on the death of a co-owner, any proceedings by or against the co-owner under subsection (1) (whether instituted before or after the commencement of this subsection) survive against or for the benefit of the estate of the deceased co-owner despite, in the case of a joint tenancy, the rule of survivorship.
(2) Where the entirety of the property is vested in trustees or personal representatives, those trustees or personal representatives shall, unless the court otherwise determines, be appointed trustees on either of such statutory trusts, but subject, in the case of personal representatives, to their rights and powers for the purposes of administration.
(3)
(a) Where the entirety of the property is vested at law in co-owners the court may appoint a trust corporation either alone or with one or two individuals (whether or not being co-owners), or two or more individuals, not exceeding four (whether or not including one or more of the co-owners), to be trustees of the property on either of such statutory trusts.
(b) On such appointment the property shall, subject to the provisions of section 78 of the Trustee Act 1925 , vest in the trustees.
(4) If, on an application for the appointment of trustees on the statutory trust for sale, any of the co-owners satisfies the court that partition of the property would be more beneficial for the co-owners interested to the extent of upwards of a moiety in value than sale, the court may, with the consent of the incumbrancers of the entirety (if any), appoint trustees of the property on the statutory trust for partition, or as to part of the property on the statutory trust for sale, and as to part on the statutory trust for partition, but a purchaser shall not be concerned to see or inquire whether any such consent as aforesaid has been given.
 
I would suggest that for expediencies sake you agree to put the property to auction and buy the other half then.
I agree with HA, but would also suggest you could have someone else bid for you, such that if you are successful, your brother need never know you are the new owner.

NB: With your brother's mindset, purchasing his half is a no-win situation. For example, he will feel like he has been sold short at the time of sale which will only be magnified in a few years time when the value of the property increases.
 
Raphael

IMHO your best chance of getting a win-win out of the current lose-lose situation is to persuade your brother to the following:

- put the property into a familty trust owned 50-50 by you and him where all income, cost and CG are shared 50-50.
- if your brother needs to draw cash out of it, say 10%, a valuation (or better, an average of 2 or 3 valuations) is done and he gets 10% of the valuation in cash, financed by you through a mortgage on the property. The ownership of the trust then becomes 40-60 (you have 60%).
- repeat the above every time he needs to withdraw cash up to a max of 50% at which time the property is yours.

I think the above is the fairest solution to both of you and can be presented as such in an impassionate way by a third party such as a mutual friend, cool-headed relative, lawyer, etc.. It preserves the interests of both of you now and in the future. It is transparent with regards to market change and can be legally enforced. It can be transferred later to your children.

Compared to litigation, I think it's very cost effective. And best of all you may be able to keep your relationship in working condition.

You need to have the practicalities of the above checked by a lawyer/accountant before proceeding. Best of luck.

Truong
 
having seen this type of situation again and again (either thru death or divorce) where all parties think they are the hard done by ones, all i can suggest is put the property to auction. sell the damn thing to a 3rd party, take your cash and invest elsewhere.

i know it was your father's home - but in reality you need to keep emotions out of it.

how would you feel if you found out after an auction that your brother had a "dummy" bidder there driving up the price, knowing full well that you were prepared to pay anything to get the property. how would your brother feel if there were no other bidders and your "dummy bidder" bought the property after a low vendor bid.

dazz is spot on - we have totom poles on both hubby's and my family. i won't say what order they go in, but there are definately favoured adult children who get more assistance than others, or who can do no wrong.

no ear whispering spouses as fortunately the worst of these were both dispensed of - but time will tell.
 
having seen this type of situation again and again (either thru death or divorce) where all parties think they are the hard done by ones, all i can suggest is put the property to auction. sell the damn thing to a 3rd party, take your cash and invest elsewhere.
Tend to agree with the above. It's a shame as your father wanted it retained in the family, but offloading the place will ease the tensions on relationships. There will also be no possibility of ill feelings if you were to buy your bro out only to see the place rise in value with a surge in prices following.
 
It can be transferred later to your children.

.....and the wheel will once again turn another cycle.....


If this type of conflict happens over a 700K house, can you imagine the shenanigans over a big estate. Being mostly property investors on this forum, I wonder how much very detailed thought the investors have given to this subject.


The ol' "I'll just keep them all and the kids can share it when I go" doesn't quite cut the mustard.....as has been noted many many times.


The testamentary trust, which control all of the assets from beyond the grave, along with dodging a bunch of CGT and income tax later down the track, is looking a pretty good option. Removes all of the "how much do I get" questions and gets the Govt and lawyers out of your face. Everyone gets diddly squat.
 
The testamentary trust, which control all of the assets from beyond the grave, along with dodging a bunch of CGT and income tax later down the track, is looking a pretty good option. Removes all of the "how much do I get" questions and gets the Govt and lawyers out of your face. Everyone gets diddly squat.
This. I have a testamentary trust set up and am currently trying to get my stepdad to set one up as well. Unfortunately, it's falling on deaf ears at the moment. But I'll keep trying, nothing like a good challenge!
 
Okay you've sparked my curiousity. How so guys?? Would really like to hear more about this.

Not trying to disagree, I am genuinely interested to know how this comes into play?? In the words of Pauline Hanson, please explain...

P.S. Having been in a similar situation to Raphael (I was in his shoes; I was forced into an auction) I'd be very interested to know how this pans out. Hopefully he will keep us all posted on the outcome.

Best of luck with it all Raphael. :)
Dazz's subsequent post offers a good view and much more detailed then my suggestion: If you don't think you have power, then even if you do possess it in reality it counts for naught. Hence my suggestion of auction- put it in neutral hands and if a party wants to retain the asset they can bid for it. No arguments as to the value of the asset then.
 
.

The testamentary trust, which control all of the assets from beyond the grave, along with dodging a bunch of CGT and income tax later down the track, is looking a pretty good option. Removes all of the "how much do I get" questions and gets the Govt and lawyers out of your face. Everyone gets diddly squat.
But who will be the trustee and under what terms?
 
I agree that a testamentary trust, properly thought out and set up, can lessen some issues, but can also bring up other issues. It also doesn't mean a will cannot be contested or that those looked after by that trust are happy with their lot.

Even having worked out all (?) issues, it seems there are others that can arise.

Bad blood in a family will always be there, no matter how you try to sort things out.

If your brother is not happy for you to buy him out with a mutually agreeable sale price, then sell it at auction. If you bid and get it, that is good. If not, let it go. Much as it was your father's wish that it be kept, do you think he would want to drive a bigger wedge between his two sons?

We have kept a lot of things that Mum had, but simply had to get rid of a lot of things that were important enough to her that she kept them. I know a house is different, but the principal is the same. "Things" or "houses" do not represent the relationship you had with your dad. Selling the house, if that is the only way your brother can move forward, will be upsetting, but the emotional fallout may not be worth fighting for it. Perhaps it would have been better that your dad not ask you to hold onto the house.

I think if your dad knew the turmoil this issue was causing you, he would say "let it go son".

Is it worth the angst? Have a good talk to your dad (I know, I know, he is not here any more, but you can still have a little private talk to him) and tell him this is what you need to do for the sake of salvaging the relationship. As you say, you could do all this, only to have your own children sell it up as soon as they get it.

Believe me, we have a LOT of angst coming when my father passes away and the carefully designed wills are actioned. There are SO many things that are going to hit the fan, so I feel for you.
 
is it about the money or the property?
do you think your brother resents the fact the house may become your property? families can be funny things. rather sad there is this conflict but it is more common than some some would believe.
I suspect it may have nothing to do with money, and everything to do with the relationship between the brothers. If Raphael's brother already feels like Raphael is "the successful one", it might be that if Raphael ends up owning this house, it will reinforce in his brother's mind that he's the "loser" of the family, because he couldn't afford to keep his half, or buy out Raphael... ie it was Raphael who was able to make Dad's wish of "keeping the house in the family" become a reality.

As for Dad's wishes, with respect, I think it's silly for people to impose limitations and obligations on their family after they're gone. These statements may be made with the best of intentions, but they so often end up causing enormous angst, and unfortunately, there's no opportunity for the dead person to arise from the grave and say "enough already! If I'd known it'd cause so much trouble I'd never have mentioned it! For heaven's sake, just do what works for all of you and get along!"

Most houses are only special because of the memories that we create when it's our home. Once nobody in the family lives in it anymore, I don't see the point in owning it. Treasure your memories of the experiences that you had in the house, take heaps of photos of how it was when Dad passed, then sell it to strangers so that you don't experience the discomfort of seeing other people re-decorate it and getting rid of those features that were special to you, or letting Dad's garden die, or whatever.

I'm sure that if Dad could see what angst this had caused, he would be releasing you from your promise, Raphael.
 
At least if you sell it you won't run the risk of it being trashed by tenants.

And co-owning it with your brother is never going to work. Seems to me the best thing for your relationship is to have no ongoing financial dealings with him.

Let it go.
 
Excellent advice from both Wylie and Ozperp.

We had the sad task of selling my family home after mum was admitted to a nursing home with advanced Alzheimers Disease. My sister and I took about 6 months to clear all the personal possessions which was a great help for us to "let go" emotionally.

And you know what? After that time and when the house was just about bare it was not difficult to sever our emotional ties, we began to see it as "just a house". The memories of good times were securely locked inside our heads and we did not need the house to remind us.

Yes, we could have chosen to keep it and rent it out, but there are 4 siblings and the vote was clearly to sell. Although had I been an only child I would have kept it, I am now pleased that I won't have the stress of seeing tenants' possessions in my mum's bedroom, or see her cherished gardens slowly neglected as even I would not put the time in to them that she did.

When the time came we sold it without anguish.

Maybe it is time to let go and move on.

BTW, if you do go to auction and you do decide to bid, I would suggest you engage a third party to bid on your behalf so that there is no animosity on the day.
Marg
 
Condolescences to all those who've lost their parents.
I think if there is anomosity, its very hard to come to an agreement, and its not always over the big things. I know a family that took 18 mths to resolve who got a collection of dolls, and it was the boy who was causing the holdup! (I suspect perhaps his wife was the problem!)

So, I would suggest selling and moving on.

Another relative bought out her siblings when her parent died. I dont think there was any animosity at the time, but she certainly ended up the most wealthy of the family, and I think there has been some simmering resentment as they got older and more aware of the differences in wealth.

If it goes to court, everyone will lose out except the lawyers.

I also agree with Marg, that the house changes when its empty, and loses the emotional attachment.

Good luck with it all though.

Pen
 
Im Ok with the emotional memories bit, not much in that house looks like it did when I grew up in it. Dad converted my room into industrial storage not long after i moved out. His second wife then went about re-arranging the place.
Dad left her enough cash (outside of estate) to buy her own home outright, (which she did during the slump last year). and a monthly income for life.
She moved out last week, and is gone. She relocated to another city, and is setup for life. She deserved it, my old man was hard work. dont know how she did over 20 yrs with him.
Dad made sure she got everything except the house, the house had to get passed down the family tree, She was not family. (although that bit is not written in the will). Thats something he made clear to everyone in the family. The Will simply leaves the house to me & bro.

This where Im all stuffed up emotionally. My bro knows how much dad wanted the house stay with me or him, or a MALE grand child, but bro couldnt give a toss, just wants the cash, and the house out of the family.
 
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