Long story short, my siblings and I inherited a house that is currently tenant occupied however the tenants refuse to release the rent check...

Question

Long story short, my siblings and I inherited a house that is currently tenant occupied however the tenants refuse to release the rent checks to us because the co-owners cannot agree on a property manager. The tenants meanwhile are giving their rent checks to their attorney and asking him to hold onto the checks until we can finally reach an agreement - which will never happen. Meanwhile I am the one who is paying all the bills on that property and I am the one who the tenants turn to when they have questions or need repairs done, also which I arrange and pay for. My question is: Can their attorney hold on to those checks (6 months already) and is there some way for us to demand that he reimburse me for my expenses?

Answer

First question: Did the house pass by will or under the terms of a trust? If it were by will, I assume there is or was a probate proceeding in which the judge may have, or may be asked to, make an appropriate order for management of the property. If the house passed under the terms of a trust, then the questions are whether the trust says anything about management of the property and, more likely, who the successor trustee(s) is/are.

Next question involves the longer-term ownership of this house. It sounds as though there is little possibility of amicable co-ownership. If so, one or more of the siblings may be able to force its sale and distribution of the net proceeds by filing an action for partition. In a partition suit, the older practice used to be to divide the property by physical lot-split between the warring co-owners, but with urbanization and subdivision laws, that is seldom possible, so nowadays the court will order the sale of the property and division of the net proceeds.

In your case, the judge would also presumably order the division of the funds held by the tenants' attorney, and would consider your evidence on claims for reimbursement for all payments of expenses you've made in excess of your fair share. (The tenants would be named as co-defendants in the partition in order to bring them under the court's jurisdiction).

Your choices here may be governed by factors such as whether the house is "free and clear," "under water," or somewhere in between as far as debt-to-equity, and whether you or the other siblings has emotional attachment to the property, e.g., it was your childhood home. Your decision may also be guided by whether there is much future hope of cooperation. Co-ownership of a rental property is very much like being in a partnership business (although legally it usually isn't), and if you can't get along, disposing of the property via a partition suit may be the best choice.

Please feel free to contact me via e-mail or phone; I am a short distance from 94928 and would be happy to provide some further advice, without cost or obligation.