# Multi-Owner Home Situation, Title Question



## rusty_shackleford (May 18, 2012)

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## rusty_shackleford (May 18, 2012)

Sorry just realized i may have posted this to the wrong spot.. mods please move to Real Estate if necessary. Thanks


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## nobleea (Oct 11, 2013)

Yes, he probably does as without his name on title you may not have been able to purchase it. Who was on title? Three people, or five?

In the interest of keeping a healthy family, I would pay him out. I don't know if he has to pay capital gains taxes, i would assume so since not his primary residence.


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## rusty_shackleford (May 18, 2012)

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## rikk (May 28, 2012)

As far as I know, the uncle, being 1/3 owner by title, could sell his share to anyone, at any time ... I would consult a lawyer to confirm, find a way forward ...


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## rusty_shackleford (May 18, 2012)

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## marina628 (Dec 14, 2010)

Tell him you will gladly give him his share of equity as soon as he makes his past due mortgage payments.


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## marina628 (Dec 14, 2010)

A 1/3 owner cannot force the sell of the property and if he did try to sell his 1/3 the other two would have first rights to this .I went through this issue 14 years ago personally and this is my reason for previous post about having him pay his share of mortgage payments .A lawyer was involved and it was sort and sweet pay up your years of missed mortgages and you get 1/3 of the net proceeds ,in our case the 3rd owner would have owed us $20,000 and made zero on home.It was a bad investment after 9 years it sold for only $27,000 over purchase price ,when you factor in fees to sell we lost on it ...


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## rikk (May 28, 2012)

marina628 said:


> A 1/3 owner ... if he did try to sell his 1/3 the other two would have first rights to this.


OT: Hi ... I took an interest in this subject a while back ... my understanding of your post, a 1/3 owner could at anytime offer the 2/3 owners first rights on the 1/3 share, and if they declined, then the 1/3 owner could offer for sale the 1/3 share to anyone.


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## OhGreatGuru (May 24, 2009)

I guess I don't understand how or why the uncle got on the title. His original interest in the property was paid out; his continuing interest was only as a co-guarantor of the mortgage. The rest of you are now prepared to relieve him of that liability. You may need a lawyer. 

_We did not draft up any paperwork to specify who owns what._ But surely you have some record of the original buyout agreement?


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## MoreMiles (Apr 20, 2011)

How much are we talking about? It would not be worth it to destroy a family relationship for less than $100,000 in my opinion. It may just be me but in some cultures, it's not unusual to provide financial assistance to an uncle becuase he is at the level of your dad. So some cultures would respect an uncle like a father. I think for some thing like family relationship, money cannot replace it. So why feel bad if he gets more?

The other way to look at this that it would be a ugly legal fight becuase you guys did not have a notorized agreement. So a lawyer may charge $50,000 at the end of all these so is it worth it?


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## blin10 (Jun 27, 2011)

MoreMiles said:


> It would not be worth it to destroy a family relationship for less than $100,000 in my opinion.


In my opinion damage already has been done, and if it was me I would never forget what he did... there would be no way to go back to how things were before


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## MoreMiles (Apr 20, 2011)

blin10 said:


> In my opinion damage already has been done, and if it was me I would never forget what he did... there would be no way to go back to how things were before


I don't think the damage has been fully done yet. Can you imagine those people suing each other and trying to get other family members to choose side? The entire extended family would be affected.


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## sags (May 15, 2010)

I view this entirely different than some I guess.

The uncle co-signed the loan, and without him risking his good credit on a default or loss in value to the home, there would be no profit for anyone to split.

I would imagine the mortgage lender would require the co-signor would be on the title to the property, and that makes him a legal owner of the home.

From the uncle's perspective, he is a landlord renting out to tenants who pay the mortgage and all maintenance costs. 

If the mortgage went into default, who was going to reimburse the uncle ? If the house was worth less than the mortgage, who would reimburse the uncle ?

Using someone's credit rating to make money, should come with a risk premium and often does.

People who can't qualify for a mortgage are high risk borrowers. 

The uncle was guaranteeing high risk borrowers, and I think it is perfectly reasonable for him to expect to share in the profits that his guarantee generated.

It is quite likely that those who couldn't qualify for a mortgage, were paying a much more favorable rate of interest due to the uncle's guarantee, than they would had they borrowed from a subprime mortgage lender.

The uncle may have in fact saved the other owners a lot of money in interest charges.

For all that he has done for the other owners............he doesn't deserve a share in the profit ?


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## rusty_shackleford (May 18, 2012)

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## OhGreatGuru (May 24, 2009)

I have to disagree with SAGS. Cosigning a mortgage doesn't (or shouldn't) convey ownership. Yes, there was some value to the Uncle's contribution to sharing the risk, but not to the extent of 1/3 ownership of any capital gains for no financial contribution. I agree with OP's last comment. It sounds like Uncle knew perfectly well what advantage he was hoping to get out of this "favour" he did. As I understand the post, there is in fact no cash to be had - the house is not being sold. Uncle is trying to claim 1/3 of an imaginary profit on a "Deemed disposition" as his price for taking his name off the title.


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## MoreMiles (Apr 20, 2011)

The easiest but unpredictable way to solve this is for your grandma (if she is still alive) or your grandparent's sibling to act as an elder arbitrator, call a family meeting to have 5 children sit down at a table to solve this. If no elder is available, the oldest sibling can act as the group leader to call for an arbitration meeting. I am pretty sure your other uncles and aunts will not let their sibling double dip and get away. And your uncle may not want to risk his relationship with all his brother and sister but then again he may not care.

If he does not care, this is almost like a divorce situation. The family members will not be able to discuss rationally among themselves and all family asset discussion will then be very adversarial and done through the legal system. This is similar to a divorcing spouse wanting more than his/her usual share... it may be unfair but the claimant does not care.

The problem is, you guys did not have any written or witness verbal agreement... So it's like a couple without a pre-nup... guess what, it will be very difficult battle to fight. For example, can you even prove that he was already paid out? Was their a release of future claim signed? Maybe your uncle will claim that initial payment was only a dividend.

Please keep us updated what the lawyer says... it would be a good lesson for everyone about joint ownership / mortgage with family members. I wish you the best of luck.


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## sags (May 15, 2010)

Would the uncle have signed a document that assigned him all the risk and none of the upside ?

Evidently not.............as he now wants his share of the upside.


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## rusty_shackleford (May 18, 2012)

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## sags (May 15, 2010)

Sorry I can't agree with your premise, but there are lots of people on the forum who do apparently.


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## rusty_shackleford (May 18, 2012)

sags said:


> Sorry I can't agree with your premise, but there are lots of people on the forum who do apparently.


Hey no worries, good to hear all sides.


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## sags (May 15, 2010)

I can't claim to always be right or wrong...........but I do both with equal conviction........


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