Buying a home with a family member can cause problems down the line. 

If you’re buying a home with family doesn’t always work. If you’re buying with family members you can lose the value of your investment and the relationship with your family at the same time.

Is it a good idea to buy a house with multiple people?

Q: I bought a house with a friend in 2012. Recently, He sold his 50 percent interest to my sister, making her my new partner in the property.

I allowed her to be the only one on the deed. Now she is “evicting” me and claiming we had an “oral lease agreement” and that is why it is not on paper. I have lived in this home for many years now and still have receipts of all the money I have put into the home. How can I prove that I am a co-tenant if there is no written proof and I am not on the deed.

Is it a good idea to buy a house with a sibling?

A: Your situation is complex and difficult to understand completely. So, we’ll make an educated guess as to the issues you’re facing.

Let’s start with this: are you a co-owner of the property or a renter? You can’t be both. When you own a home, you have the right to live in the home. When you don’t own the home or any interest in the home, but still live there, you might be a tenant, renter, or occupant of the home.

So, having established that you can’t be a renter and an owner simultaneously, we wonder if you are still on the property’s title. You purchased the home with a friend in 2012, and at that time we’re sure your name was listed on title along with your friend’s name. You and your friend likely were co-owners of the home.

What percentage of the property does each person own?

We’re going to assume you were equal owners. When your friend sold his interest in the home to your sister, she would have received the 50 percent of the property he owned. You would have still owned 50 percent of the property.

The odd part of your email is that you state you are “not on the deed.” You could only “not be on the deed” if you never owned the home at all or you somehow went along with your friend and conveyed your share of the home to your sister at the same time he did. We’d hope you’d know if you did that.

Can you buy a home with your friend?

Of course, if you purchased the home with your friend, you would be on that deed from 2012 but you would not be on your friend’s deed when he transferred his 50 percent interest to your sister. You’ll have to determine whether you ever were on the title to the home and if you ever intentionally or unintentionally conveyed your ownership interest in the home to your sister or someone else.

How do you do that? Dig out any documentation relating to your original purchase in 2012. You can look up the website in your county or municipality that handles the recording or filing of real estate documents. Using the online tools for that website, you might be able to view (and even print) the documents in question. If they’re too complicated or difficult for you to figure out, you’ll need to hire a real estate attorney to review your situation. You might also go down to that governmental office and see if the clerk in the office can offer assistance in locating these documents.

Once you have the documents, you or your attorney can verify if you were, and are still, an owner of the property. Assuming you are an owner, the next question is how you and your sister will share the ownership of the property.

Buying a home with family: who uses the property 

In other words, what did you and your sister agree to as it relates to your use of the property?

If you’re an owner, you and your sister need to come to an agreement about the use and financial management of the property. While you’ve had possession of the home for a long time, your sister apparently does not believe you should have the use of the home now. You maintain you have the right to continue to use it. If you’re an owner, you should have the right to stay. If you’re a renter, then you may not.

Has she formally started the eviction process? If so, you’ll need to pull together all the paperwork you have and find an attorney who can help you navigate the legal process. If you’re a renter and not an owner, you might still prevail against your sister and keep your occupancy of the home. But, you may have to pay a monthly fee (or rent) to your sister.

Consult with an attorney before buying a home with family

You should consult with an attorney anyway, because the ownership is in question and the case is complex. If you’ve paid maintenance costs, real estate taxes, insurance bills, repair and replacement expenses over the years, you may be entitled to get some or all of that back, if you are no longer an owner.

Just make sure that the attorney you hire has previous experience in real estate issues like yours.

 

Read more about buying a home with family:

What’s the Best Way to Help a Family Member with a Private Mortgage?

Buying a Duplex With Friends: Primary Residence or Investment Property?

First-time Buyer Homes Out of Reach

Helping a Child Buy a Home

How Do You Split a Home Between Siblings?