Dear MarketWatch,
My mother recently passed away. My brother had been living with and caring for her for a couple of years and was the one to find her after she died.
Her will states that the house is to be shared equally between all her children, but also that my brother who has been living there gets to stay for 12 months, rent-free, so long as he pays the bills that go along with the house. That includes insurance, taxes and utilities.
My brother plans to move out of state in about seven years, and is suggesting we hold off selling until that time as he believes the house will be worth more by then. While we weren’t thrilled about waiting, we decided moving twice could be a pain. When it was suggested that he will have to start paying some sort of rent when the 12 months is up, he was not happy. He feels that — given he’s paying all the bills — that should be enough as the property taxes are very high in New York.
We’re not looking to rip him off, but at the same time we’ve all got mortgages or rent and bills to pay as well, and don’t feel he’s entitled to continue to live rent-free beyond his 12 months. Additionally, he claims that if he has to buy the home or move out at the 12 month mark, that he is entitled to an additional 6 months, rent-free of course, to find another place to live. We don’t want to be jerks, but this feels a bit entitled. What are our rights?
Sincerely,
Looking for Help in Long Island
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Jacob Passy at [email protected].
Dear Looking,
I’m so sorry for your family’s loss, and that you all have been dealing with the stressful fallout that often comes when a parent dies. It’s noble that your brother offered to help out your mother during the last couple years, and I’m sure his support made things much easier for you and your siblings. And I can scarcely imagine how tough it was for him to go through her passing as he did.
That, however, does not excuse his behavior in negotiating her home and its eventual sale. It was very kind of your mother to have the foresight to include a provision in her will that he be allowed to remain in the house for another year. I’m sure her intention is that he would use those months to find another living arrangement. Instead, it does seem as though he wants to coast along not having to pay his fair share.
Had your mom intended for him to be able to live in the home indefinitely, she would have said so — and presumably divided the rest of her assets accordingly. But she didn’t. I think it’s kind of you and your siblings to be understanding enough to allow him to continue living longer in the home than your mother asked, but he should pay rent in return.
His assumption that the home will increase in value over the next seven years is just that — an assumption. Indeed, most economists don’t expect home prices to fall in the next year, but seven years is a long time and guessing where home prices will go over that span of time would be a fool’s errand.
At a local level, prices can have more volatility. Case in point: Earlier in the pandemic it looked as though home prices would fall in vacation markets because of the initial travel slowdown, but then many families began buying second homes as retreats in the era of remote working. Yes, this example is a best-case scenario, at least for anyone who owned a vacation home. Nevertheless, it shows that home prices are hard to predict.
“The stock market typically sees a higher return, compared with home-price appreciation.”
Plus, as you pointed out, the rest of you have bills to pay — including property taxes, if you all are homeowners. The proceeds from selling the home could pay off major debts or at least make cash flow less of a concern. If you invested the money earned from the home’s sale, chances are that it would see a higher return in the stock market than it would have earned via home-price appreciation.
Your path forward might depend on who was named the executor or administrator of your late mother’s estate, and what the court decides is the best course. For that reason, if you can’t come to an agreement with your brother about paying rent, you may need to retain legal counsel.
In New York, executors can face a Catch-22 when attempting to get a beneficiary of an estate to move out of a home, according to the Law Offices of Albert Goodwin, because both the landlord-tenant court and the surrogate’s court that handles probate issues may decide the matter is out of their jurisdiction.
A lawyer might recommend pursuing a partition proceeding. If the trial court grants the proceeding, “the court will appoint a receiver who will sell the property at auction. Once the receiver sells the property, takes his cut and gives the rest of the money to the estate, the executor will be able to distribute the money to beneficiaries of the estate,” the law firm noted in a blog post, warning that such a process can be costly and time-consuming.
Hopefully all of this information will provide you more leverage in negotiating with your brother, and your family can put this matter to rest. There may be hurt feelings, but I hope that in time you all can recognize what a wonderful gift your mother left you and cherish it.
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