Confused - need advice

Hi ladies,

DH and I own 1/2 share in our house with DH brother. He owns the other half and he has decided to move out as doesn't want to live here anymore.   (Which we are looking forward to as soo hard to live with!).

Anyway, as house prices have dropped if we sell the house now and go our separate ways then we would all lose alot of money the time we take in the loss of what we paid for the house (which is min $25,000) plus real estate fees.

So we thought it would be a good idea to buy another 1/4 from him and rent out out a room to help us pay for it.    (he is downstairs with own bathroom, lounge, bedroom, we all share laundry,kitchen)

Therefore we would own 75% of the house and brother 25%.

Hope I haven't lost you so far   

So what I am confused about is.........if we rent out downstairs:

Do we give him 25% of the rent because he now only owns 25% of the house

or

50% of the rent because we have bought half of his share which will now be rented out.

DH and I have different opinions so wondered what your thoughts are.

Thanks

Sorry not sure but had to comment as there have been views, you may be best to contact a lawyer for advise, Would it not be easier to try and buy his share have you talked to the bank??

I agree 75:25 as that is how you have the house split.

i would have thought that if you came to an agreed value for the extra 1/4 share, then you would pay your BIL all of the rent until that value is paid off?

may be best to talk to a lawyer! in my experience these family situations can get messy!

If you need professional advice then try Citizen's Advise, they weren't able to help me with a legal question but gave me the number for a free legal service.

Are you going to loan the money from the bank to buy the extra 1/4 share? If so then I would think that he would get 1/2 of the rent from downstairs. Currently you own it 50/50 so let's say for arguments sake you own upstairs and he owns downstairs. You are going to buy half of the downstairs off him and rent the whole of the downstairs out. As he still owns half of the downstairs he is entitled to half the rent you get from it. Well that's the way I see it.

 you now own (or will own) 75% of the house.so he should only get 25% of any profit made from the house.....

I was going to say 75:25 too, but Linzy's post makes perfect sense to me too!

But I second getting legal advice - you at least want it in writing somehow that the shares in the property have changed. It might cost you $500 now but if you don't get the legal advice it could cost you tens of thousands down the line. (And the cost of the lawyer should be split between you and the BIL!)

75:25. That way if you don't get tenants in for whatever reason, you cop it. On the other hand, if you rent it out for higher than hoped, you pocket it.