Q I jointly own a buy-to-let property with my sister. The mortgage is paid off and our mother has been managing the let for us for free. As I live far from the property, and have noticed some issues with the management in the past, I think the fairest thing to do is get a property manager. Not only does my sister flatly refuse to agree to this, she is also insisting I buy out her share, which I don’t want to do, and is refusing to seek new tenants for the vacant property until I do this.
Meanwhile, she wants a 25% fee for her to manage it, even though I don’t want her to do it. I have said that if she doesn’t want to co-own any more I am happy to put the property on the market, but she refuses to do so.
I want to know what my rights are in terms of property management and taking on tenants. Is a forced sale my only option? I would prefer not to do this at present as the market is so bad. KB
A I can see you might not want to pay your sister 25% of the rental income to manage your property. That’s substantially more than the 10% typically charged by a letting agent to cover the cost of marketing the property, finding and vetting a suitable tenant, obtaining references and preparing a tenancy agreement and inventory. Even the cost of a full management service, which as well as the above includes credit checks, collecting the rent, paying bills, property inspections and organising maintenance, starts at 15%.
However, it’s not clear why you’re not prepared to let your sister manage the property at all. You say your mother has been doing the job until now, so if you had issues with past management it’s not relevant to your sister taking on the task.
I’m also having difficulty getting my head round your sister’s apparent position. If she wants you to buy her out, why isn’t she prepared to sell the house on the open market given that the end result – getting cash for her share of the property – is the same?
Whatever the answer, at the moment you are both cutting your noses off to spite your faces. Although you are not having to pay a mortgage, the fact you have no tenants means the property isn’t making you any money. Unfortunately, you can’t engage a letting agent without your sister’s agreement, so unless the two of you can come to some sort of compromise it looks as though forcing a sale is your only option.