Need your perspective: Joint ownership of cottage w/siblings

[ourbabygirl]

So I'll try to keep this as quick as I can. :)

My siblings and I were 'given' a little lake cabin from our parents... it's really not worth much and it's in pretty bad shape, needing major yard work done and new windows, along with other maintenance issues. So now that we all have our own families and homes, we all have differing financial situations and desires for what to do with the place. Up until a year or two ago, my parents were still paying the taxes on it (which have gone up dramatically, and are now more money than our steep taxes in our suburb). We kids don't even use the place, so it made more sense that they would keep being in charge of it. Then they decided they wanted us to start taking control- paying taxes, cleaning up the lakeshore and yard, mowing, cleaning the inside, etc. Well, I never wanted to be part of the deal to begin with, and definitely don't have time or money to deal with it now that I'm a SAHM with one kid and another on the way. We're happy with our home (which has a huge yard and lots to take care of as it is), and we don't have the time, money, or desire to go to this cabin which is more than an hour away, and to pay and work to maintain it.
Problem is that I want to get out of it, but the real estate market is really bad right now, and the lakeshore is in bad enough shape that it will require a lot of time and work to get it up to speed to sell (one SIL says it will take 2-3 years, maybe, partly because the water level is so low).

I want to get out of this whole situation because
1. We don't have the money to keep paying taxes on it each year, and to schlep up there to clean the inside and grounds throughout the year, plus to fix what needs fixing and replace what needs replacing;
2. We're happy with our home and don't have the need for a cabin, nor the time to use it;
3. I don't want to be involved in a situation like this with my siblings and their spouses since one couple is really cheap and will do anything they can to avoid spending money on it, and the other couple has more money but they're very flighty and forgetful.

How do I get out of this without coming off like a total jerk? I mentioned to them last year that I didn't want to be a part of it anymore, but I don't know how to get out of it without 'screwing them over.' They would have to buy me out of it, and I'm sure they don't have the money for that. Otherwise we would all need to agree to sell the place, but not everyone is willing to do that (though I am).

I don't mean to sound ungrateful, but it's just a big can of worms and I need to know how to get out of this gracefully.

Thanks for any suggestions and advice you can give! :bowdown:

[o_mom]

Do you want or need the money right now? Are you willing to just walk away?

I would consult a real estate attorney about the options such as just deeding it over to them, selling your share to them over time, giving them a time line to sell or buy you out in, say, 5 years and you take a reduced portion at the sale in exchange for not having to pay taxes, etc. during that time. Let the attn. know that you want to be fair, but at the same time you don't want the burden any longer. They can let you know the legal and tax implications of the various scenerios as well.

[hillview]

Can you offer to donate it to them or to a local something?
/hillary

[sste]

What you are saying is that its a liability. Maybe offer to sell it for $1 to your siblings? Or is it rentable? Could you rent it out and use that income to pay the taxes?

[wellyes]

What you are saying is that its a liability. Maybe offer to sell it for $1 to your siblings? Or is it rentable? Could you rent it out and use that income to pay the taxes?

That's exactly what I was thinking. Offer to walk away and forsake any eventual profits from sale or use of the land. If your sibs won't accept that, suggest renting. If they won't accept THAT -- not sure what else to say. This is a tough one!

[tarahsolazy]

I'd just walk away, and lose whatever theoretical financial interest you have in this thing. Sounds like a money pit. And, what is the likelihood that you will ALL want to sell at the same time, and then ALL contribute equally to the investment to get the thing ready to sell? Indeed, can you even be assured that you'll eventually get back any money you put towards improvements and taxes?

This wasn't a gift, its a burden. You're not losing money, you're just losing the potential to make a little bit after a ton of hassle in the future. Give it to your siblings.

[JTsMom]

I'd just walk away, and lose whatever theoretical financial interest you have in this thing. Sounds like a money pit. And, what is the likelihood that you will ALL want to sell at the same time, and then ALL contribute equally to the investment to get the thing ready to sell? Indeed, can you even be assured that you'll eventually get back any money you put towards improvements and taxes?

This wasn't a gift, its a burden. You're not losing money, you're just losing the potential to make a little bit after a ton of hassle in the future. Give it to your siblings.
:yeahthat: This is kind of what I'm thinking too. It doesn't sound like it's worth a ton anyway, so unless they'll buy you out at any price, I think I'd walk.

[ourbabygirl]

Thanks, Everyone.
Renting it out is a pretty good idea, but then we have the hassles of finding someone to rent it and keeping it in good shape and being landlords and everything (from an hour away and with kids; not easy or fun!). But it is a possibility to make some money from it. We should have been renting it out all along, as we almost never use it.
When I say it's not worth much, it's probably assessed at around $250-275K (they originally bought it for $80 or $90, I think, about 17 years ago). It's only a 2 bedroom, so quite a bit smaller than the other homes around it, which people do live at year round. But who knows what it would actually go for in this market or how long it would sit for sale. And you're right; I would be fine trying to sell it now but my siblings wouldn't. I guess the main thing is that they would probably want to keep it (one brother commented to someone that it might be the only way he can afford a cabin/ something on a lake), but I have no desire to keep it and use it, even if its value appreciates quite a bit in 10 or 20 years, which I think was what my parents were thinking (in addition to getting away paying less in taxes since it's in our names). Of course, this was back when the housing boom was big and things were appreciating a ton.

It sounds selfish, but I really don't want to just give up my portion of it because my siblings haven't put any more money or time into it than we have. And since we have just my husband's income now that I'm staying home (my siblings and their spouses all work full time), I don't want to walk away from money we *could* make or at least retain from it.
It's a good idea to talk to an attorney, though, for an impartial professional opinion, if nothing else.

Thanks for your help! If you have any more ideas, please send 'em my way! :thumbsup:

[kijip]

If it is in a vacation spot, could you get a leasing agent who specializes in vacation rentals? Most of the people I know who own this sort of thing plan out the 2 weeks they will be using it and then have an agency handle by the week rentals the rest of the season. Maybe this would generate enough to pay for upkeep and taxes? Then you could retain your stake in it for later?

[niccig]

It sounds selfish, but I really don't want to just give up my portion of it because my siblings haven't put any more money or time into it than we have. And since we have just my husband's income now that I'm staying home (my siblings and their spouses all work full time), I don't want to walk away from money we *could* make or at least retain from it.
It's a good idea to talk to an attorney, though, for an impartial professional opinion, if nothing else.

Thanks for your help! If you have any more ideas, please send 'em my way! :thumbsup:

I see the options of
1. you walk away, and yes you give up an potential earnings.
2. a sibling or both siblings buy you out

If neither of those happen, you're stuck in this arrangement. Do you have a formal agreement of how the cabin is to be managed. Eg. maybe there's a bank account for the cabin and everyone puts in a set amount that will cover property taxes + some repairs - over time the amount for repairs might be enough for big repairs like replace windows. Is there an agreement for how much time each family must spend on maintenance?

A family member has a house in Mexico that is split with 2 other couples. They have an agreement drawn up and signed specifying the responsibilities of each party. How do you decide what is to be done. Eg. 2 of you agree to replace windows this year and it will be x amount each, but the 3rd sibling refuses and won't pay the money - how do you resolve these disputes? It might be worth investigating something similar to make the management easier for everyone.

I think your parents saw this as a place for all the families to spend time, and didn't think through how it would be managed with 3 families all wanting to do something different. I hope you can work it out.

ETA. Have you sat down and discussed this with your sibling and asked if they want to keep the cabin? You say they "probably" want to keep it. Have you asked each of them if they do. I'm imagining a meeting when you all discuss the cabin and what to do with it long term. Maybe they are equally frustrated with having it.

[babystuffbuff]

I have seen family vacation property ownership situations go both ways. My family has a cottage near a lake in the midwest. It is technically owned by my grandfather and his sister (it was their parents' house) but they have six grown children between them who all work together to make sure the taxes are paid, the lawn is mowed, things are taken care of. There's no written agreement or anything, people just......help each other. The whole family uses it for vacations, sometimes all together and sometimes in smaller groups. I have wonderful memories of being there as a child with my cousins, just like my mom does.

DH's family has a cottage on the ocean on the east coast. It's owned by my mother-in-law and her brother. To be kind, it's a total disaster. The house is divided into two 'halves' (not for the purposes of split ownership, it happened a long time ago for reasons I'm not sure of). My mother-in-law's side of the family has always sort of used the back half and her brother's side uses the front half. As our family (MIL's side) has gotten bigger and we have more little ones we've kind of outgrown the back of the house - but MIL's brother won't let us use 'his' side too so we can all fit, even for a week in the summer. So rather than deal with the drama, DH's family has been renting a different house the past few years (at a huge expense because they think money grows on tress.....but that's another post) and the place they actually OWN sits empty.

All that to say, if you're not happy with the situation, get out. It doesn't sound like it is worth the drama and stress. Things are tight financially here, too, and I'm trying to teach DH's family that we get to spend our money how WE want to, not how they want us to. If something isn't worth the expense, like this year's McMansion rental by the sea, we don't participate.

Sorry this was so long. Good luck to you - family situations can be so hard. :(

[kransden]

I have looked at this several ways. The first thing you need to find out is how much it is really worth. Get a local real estate agent to tell you.

Then you all can try to sell it, but it doesn't sound like that is a popular idea.

If they could, have them 'buy you out'. Normally you would get 33% of the profit. Say the house is saleable at 200,000. With fees etc. lets say there is a 180,000 net profit. Your net would be 60,000. If you agreed to a 10% hit on that, which would be fair since you want out NOW, that reduces it down to 54,000. that would be 27,000 each. That is still a chunk of change even on a 5 year note ~$450.00 a month. I bet the siblings won't go for it.

You could have them exclude you now from everything, and when it is sold you get - say 20% of the profits. Get that drawn up legally. I bet they won't go for that either, and who knows when it will get sold.

You can walk away, but that is a lot of money just to lose.

I would hire a management company to take care of leasing, cleaning etc. They should generate enough income to pay themselves and the taxes or close to it. If they can't, then it really is an albatross and it should be sold.

It sucks having to be entangled with family.

[Sillygirl]

Our family owns a cottage - it's currently held by my dad's generation. It's going to be really difficult when it comes to my generation as taxes will be quite high and my cousins all have a wide range of incomes. Anyway, when my grandmother gave it to her children, they hired a lawyer to draw up a formal cottage agreement. They're commonly done around here (lots of vacation homes passed down through families.) It lays out tax liabilities, what happens when people don't agree, triggers for sale, etc. I think it would be worth it to see if one can be drawn up now, so your siblings can plan ahead for tax liability and your lack of interest.

[TwinFoxes]

From what I understand, there's no such thing as a verbal agreement in real estate. Things have to be in writing. So maybe your mom and dad had something drawn up that you haven't seen? I think you should find out, and it might give you a place to start, and also if there is something already in writing, you'll have to take that into consideration when/if you want to have a new written agreement. Ugh, good luck, this sounds like a real burden disguised as a gift.

[wellyes]

If you're no willing to walk away, I think your only choice is to draw up an agreement and accept paying the taxes and fees associated with ownership. The only way to profit later from an investment is to accept the risks and expenses.

[blisstwins]

I am in a similar situation and need to voice an unpopular opinion. If you are given a gift with certain expectations, that you will care of the property, etc, and you don't then I don't see how you are entitled to the same benefit ($) as siblings who do invest their energy or money.

My father left us a house I co-own with my brother. We split the costs more of less, but I check on it weekly, manage the bills, have done all the cleaning of my father's stuff--everything. It is a dramatic burden and it infuriates me that my brother, who does nothing, gets to act as if his ownership is the same as mine. My work has value.

I think if you want out you should take a significant $ hit. Offer your sibs 1/2of your share or some other kind of compensation at the time of sale in exhange for your not having to actively contribute time or money now. This is not money your earned so it feels very different to me in terms of fairness.

In the short term, I would absolutely be looking to rent this property.

[o_mom]

I am in a similar situation and need to voice an unpopular opinion. If you are given a gift with certain expectations, that you will care of the property, etc, and you don't then I don't see how you are entitled to the same benefit ($) as siblings who do invest their energy or money.



Actually, I think that is the popular opinion, judging by the responses. I don't think anyone has said that she should get full share later if she isn't contributing between now and then.

[blisstwins]

You may be right. I am just so super sensitive on this topic. I read that it was a burden more than a gift and my attitude is "then don't take it." Which means no burden (e.g. work) then no benefit (money now or later). Seems simple and fair to me. I am speaking from my own very burned perspective, however, so my own emotions cloud how I read this all.

[ourbabygirl]

Thanks for all the additional responses!
So my whole family spent some time at the cabin this weekend to get it pulled into shape a bit and it was actually fine. I think we all agreed to either hire someone to come and check on the place and mow the yard, etc., or to have us each go there one weekend a month to do the same. We'll probably do the latter since it would be cheaper (other than gas money, etc.). I really should mention to them the idea of renting it out, but I'm not sure if they would go for that, or, more importantly, if my parents would be o.k. with that since they originally bought it. If it were solely OUR place (DH and I bought it or inherited it on our own), we would be all over that!
Anyhow, though I wouldn't have chosen to purchase this place (or any vacation home), I do realize that we need to give it an honest effort over these next few years to get it into better shape and see what the future brings. As of now I'm the only one who wants to get out of it or sell it, but that *may* change over time. My husband mentioned that we can at least go up and try to enjoy it a bit in the meantime, and invite friends to come stay every once in a while. It's tricky because it is such a small place and now that most of our friends have kids, it'll be hard to squeeze in two couples with 1 or more kids each, and only one bathroom.
For now DH and I just need to budget the money each year for taxes, along with whatever else comes with it (paying utilities, etc.) and set aside the time to go up there and keep it maintained. And create a schedule and some sort of expectations with my siblings.

Anyhow, thanks again!

[bostonsmama]

I'm sure you don't know me from Adam, but my sibs and I are in a similar place, only my parents had their kids late, so my baby brother is actually still in college, another lives in Asia on a shoestring income, and my dad gave me a deadline of "having" to turn over the property to us by 2014. Right now it's being managed by a rental company. I get conflicting information about how much it's costing or profitting my dad. On the one hand I've gotten him to replace all the appliances, bedding/mattresses, electronics (TVs, blu-ray), linens and recently a $12,000 decking renovation. But, we've been told it needs a new roof ($7,000), the septic system is almost 27 years old, and it's in hurricane alley. The flood policy, wind & hail ryder, taxes and insurance amount to thousands each year, and frustratingly, any time maintenance is called out to the property (even though it's 1.5 miles from the office), it's a $50 fee. For instance, renters will leave all the windows and doors open, then call and complain that the air conditioner isn't working: $50 for them to close windows. Renters steal & ruin stuff all the time--our Le Cruset pots, fish cleaning knives, take spoons to the beach to dig with, ruined carpet while attempting to dump out a fry-daddy, dripping hot grease on the carpet from the kitchen to front deck. And God only knows why they don't charge renters for this stuff. I've been told it makes them not want to come back--but frankly who's gonna come back after stealing or ruining something? Anyways, just wanted to provide you with my reality as an "owner" who rents, since I am the liason btwn the rental company and my dad (he just signs the checks--I authorize everything).

All I can say is that I feel your frustration. When we were kids, we always said we'd keep the place, but when it's your money--and you don't make what you envisioned you'd make as a child ;) , it's a lot different. I know my baby brother won't have that kind of income for another couple years to buy us out OR pay taxes, insurance, etc, and I can't imagine doing foreign transactions w/ my older brother since he doesn't pay American taxes. It's tricky...and yes, it feels like an unfair burden as we might be the only ones who could afford to do the work. Renting has been profitable in the past for my dad--he said he used to bank $5,000-10,000/year after costs, but in this down economy where so few are traveling and splurging on $1,500/wk rentals, it's not nearly as sweet as it used to be.

[niccig]

Larissa HI, welcome back to the boards :wavey:

[o_mom]

Another big :wavey:to Larissa! You have been missed. :)