Confused - need advice
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URL: https://www.ohbaby.co.nz/forum/forum_posts.asp?TID=24213
Printed Date: 14 October 2025 at 11:49am
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Topic: Confused - need advice
Posted By: pikelets
Subject: Confused - need advice
Date Posted: 01 February 2009 at 6:47pm
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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  ------------- http://lilypie.com"> 
 3 Angels - Dec10 / Mar11 / Dec11
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Replies:
Posted By: fire_engine
Date Posted: 01 February 2009 at 7:04pm
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I'd split it 75:25 as that is how the property will be split. ------------- Mum to two wee boys |
Posted By: nictoddie
Date Posted: 01 February 2009 at 7:05pm
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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?? ------------- 
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Posted By: pikelets
Date Posted: 01 February 2009 at 7:08pm
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We have spoken to the bank but we would need 20% equity in the property as banks are only lending 80% now.
Sadly we do not have 20% equity. ------------- http://lilypie.com">
3 Angels - Dec10 / Mar11 / Dec11
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Posted By: mummy_becks
Date Posted: 01 February 2009 at 7:10pm
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I agree 75:25 as that is how you have the house split. ------------- I was a puree feeder, forward facing, cot sleeping, pram pushing kind of Mum... and my kids survived! |
Posted By: jjands
Date Posted: 01 February 2009 at 7:32pm
| Na he gets 25% coz thats his share. Or he could rent out downstairs and collect the full rent :) good luck |
Posted By: blondy
Date Posted: 01 February 2009 at 7:37pm
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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! -------------  
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Posted By: pikelets
Date Posted: 01 February 2009 at 7:58pm
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Lawyers are expensive so trying to avoid that if at all possible.
blondy I dont quite understand what you mean. Are you thinking of rent to own? ------------- http://lilypie.com">
3 Angels - Dec10 / Mar11 / Dec11
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Posted By: myfullhouse
Date Posted: 01 February 2009 at 8:27pm
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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. ------------- Lindsey 
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Posted By: clover
Date Posted: 02 February 2009 at 8:42am
There are still providers lending on less than 20%, just shop around. |
Star wrote:Posted By: mrshouse
Date Posted: 02 February 2009 at 9:14am
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you now own (or will own) 75% of the house.so he should only get 25% of any profit made from the house..... ------------- http://www.baby-gaga.com/"> 
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Posted By: blondy
Date Posted: 02 February 2009 at 9:30am
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lol i didn't make much sense! i was meaning if you were trying to buy a 1/4 share from him, using only rent money, then it might be better to fix a value and pay that all off, then subsequent rent would be at a 75:25% ratio.
otherwise (if you were just giving him 25% of the rent money without any other payment), it's like you're saying you own 75% of the house but your BIL wouldn't have been given a 1/4 payment, so in theory would still own 50%. sorry, not making much sense again! i was just thinking that if you didn't set a value on the 1/4 share, you could be paying him a portion of the rent forever (not counting the 25% he should receive long-term), rather than paying off the value of the 1/4 share. if you were to buy him out of the 1/4 share first, then any rent should be split 75:25. -------------
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Posted By: weegee
Date Posted: 02 February 2009 at 9:37am
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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!) ------------- 
Mum to JJ, 4 July 2008 & Addie, 28 July 2010 |
Posted By: lilfatty
Date Posted: 02 February 2009 at 11:17am
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I would have thought he would get 50% .. as he owns the bottom and you own the top ..
So if you buy half of the bottom part then he owns half of it, so therefore gets 50% of the rent. ------------- Mummy to Issy (3) and Elias (18 months) I did it .. 41 kgs gone! From flab to fab in under a year  http://www.femininefitness.co.nz/category/blog - LFs weight blog
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Posted By: busymum
Date Posted: 02 February 2009 at 8:14pm
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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. -------------  |
Posted By: pikelets
Date Posted: 02 February 2009 at 9:04pm
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Man it took me awhile to get my head around.........linzy and lilfatty are right. Pretty much he would get half the rent as we are buying half of his share.
Bummer really as 75% of the rent would be much better for us of course
We have a property agreement which we will get altered. Thanks ladies for your replies. It was a real brainteaser! lol  ------------- http://lilypie.com">
3 Angels - Dec10 / Mar11 / Dec11
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