What Happens When One Sibling is Living in an Inherited Property and Refuses to Sell?

Having a loved one pass away is a distressing experience. But when there are complications related to money or assets following the death, it makes the situation even more challenging.

A common scenario is when one sibling wants to live in an inherited property while the other siblings want to sell the house, leading to a clash. You may be wondering:

• What’s the next step if a sibling or family member refuses to sell?
• Can siblings force a sale?
• What is your legal status when you inherit a house?

We’ll cover these topics and more to give you answers about how to navigate this complex situation.

What to Do if a Sibling Won’t Sell an Inherited Property

If you have a sibling living in an inherited property rent free and you want to sell, the first step should always be to try and communicate with your family member to see if you can all get on the same page.

Of course, this is often easier said than done.

If you’re struggling, you don’t have to go straight to court to force the sale (and face extra fees). Instead, you can pursue mediation. In this case, a neutral third party will oversee discussions between everyone involved to help you reach an agreement.

This isn’t legally binding (unless all parties involved decide to sign a court order), which makes it more affordable and less stressful whilst also minimising the risk of your sibling withdrawing from the sale.

Court Order for Sale

If your sibling won’t cooperate and you can’t come to a mutual agreement, there are ways to try to secure a sale using the law.

Sometimes starting a legal process with a solicitor and sending a letter is enough to push someone to agree to sell the property.

Otherwise, this process will eventually lead to a court order for sale. However, there’s no guarantee that your attempt to force a sale will be successful. Courts will weigh up the situation as outlined by the Trusts of Land and Appointment of Trustees Act 1996.

It will consider:

• The will of the deceased and any intentions they outlined
• Use of the property
• The occupants of the property and any needs they have
• Interests of all the siblings and any creditor involved

If the inherited property is being used as a family home and the sibling lives with children under 18, the court will ensure they have another house to move to if there is a forced sale.

Legal Fees and Other Drawbacks

But a word of warning.

Many people don’t like to pursue a court order for sale unless they have a very compelling reason to do so. It can damage family relationships and be emotionally difficult on all the siblings.

Also, there are significant legal fees involved.

If you’re unsure which avenue to go down, you could reach out to a solicitor for advice.

Jointly Inherited Property: The Law

When it comes to the legal side of inheriting property, the first place to look is the will.

In the best-case scenario, this document contains instructions outlining the deceased’s wishes regarding ownership and residency of their house.

If there are no specific instructions, those who inherit the house are free to do as they wish – although that may be easier said than done.

The next thing to check is whether the siblings (or whoever else is inheriting the property) are joint tenants or tenants in common. This affects how to divide inherited property.

If the will doesn’t contain any information, defer to the Land Registry’s Property Search Service. You’ll just need to enter the address and pay £3 to download the title register.

Specifically, Section B of the Proprietorship Register will confirm the property is owned by tenants in common if it contains phrasing about a “sole proprietor.”

Joint Tenants

Joint tenants are essentially co owners, meaning that all siblings own the property collectively. Therefore, they must come to a joint decision about what to do with the house, and proceeds of a sale will be divided equally between everyone.

Joint tenants all need to provide written consent for a sale to proceed, and if one joint tenant dies, property ownership passes on to the other joint tenants through the right of survivorship.

However, if one sibling refuses to sell or there’s a disagreement, it’s possible to apply to change the ownership structure to tenants in common instead. This is called severance of joint tenancy, and it doesn’t require the property owner’s consent.

Tenants in Common

In the case of tenants in common, each tenant owns a specific percentage of the house (e.g., 50% or 60%). Usually, all siblings have the same share, but this isn’t always the case – especially when there are step or half-siblings.

Each individual can decide to sell their own share, whether to other siblings or a third party. However, in reality, it’s highly unlikely that a private buyer would be interested in purchasing a share of a house and being a tenant in common with strangers.

If everyone agrees to sell the home, tenants each receive the percentage corresponding to their share after a sale.

Alternatives to Selling the Inherited Property (When Your Sibling Refuses to)

Fortunately, trying to force the sale isn’t the only option for siblings wondering what to do about a relative living in their inherited property.

We’ve listed some alternatives below.

How to Sell House When Siblings Inherit

If you do want to go ahead with selling an inherited property, you’re probably wondering exactly how the process works.

Ultimately, it’s very similar to selling any other house. Most people will turn to an estate agent to help secure a sale.

As touched on previously, it’s essential that siblings agree on the property’s market value. To do this, you can hire an independent valuer.

After the process is finished, you simply complete the relevant documents and send them to the Land Registry (a solicitor will help you). This will officially change the property’s registered owner.

Once the sale is complete, all siblings will receive their share of the value in their bank accounts.

Bear in mind that if the value of a share is more than £125,000, you may owe stamp duty.

Alternatives to Estate Agents

For those who want to consider alternatives to estate agents, there are other options. Some people choose a home buying service or an auction house instead to reduce fees and secure a quick sale.

The decision may depend on factors such as how well-maintained the house is and whether it’s the type of property and in a location that ensures a straightforward sale, as well as how quickly you need to sell.

Residence Nil Rate Band

As if the information already wasn’t complex enough, there’s also the Residence Nil Rate Band (RNRB) to consider.

The RNRB is a tax-free allowance when siblings inherit their parents’ house. While inheritance tax charges 40% on estates over £325,000, the RNRB is an additional allowance of £175,000 that specifically applies to people who own their property and leave it to “lineal descendants” in the will.

It’s a fairly complex tax with nuanced rules. For instance, if the child does not directly inherit something, they will not be eligible.

There’s a taper after £2 million, and after £2.35 million, there’s no longer any relief.

Can a Sibling Force the Sale? A Summary

Selling an inherited house is rarely a simple process, and it’s worse if one sibling wishes to live in the house while one or more siblings want to sell. However, there are a few options to pursue, such as mediation. It’s also possible to force the sale through court proceedings in extreme situations.

Once you’re ready to sell your inherited home, consider an alternative to estate agents such as property auctions and house buyers. Services like Property Solvers help you to sell your house fast by removing third parties, allowing you to move on with your life.