Selling a percentage of a triplex? (tenants, conversion, appraiser, agents)

[C555]

Hello,

I am going to try and make a very long story as short as possible in hopes that someone will have had a similar experience, or have heard of someone in a predicament like this, as nobody I have talked to thus far has any clue what I could do.

When my grandfather passed, he outright owned a triplex unit. In his will, he designated each unit to a separate person. My aunt received one unit, my uncle another, and myself a third. Unfortunately, due to unforeseen consequences, the will was deemed invalid. Ultimately, all that was left was a quit claim.

In the deed, it was designated that the triplex was split up by percentages rather than individual units. There is a 40%/30%/30% split of the whole now, though we have simply taken up residence in our individual units as they were originally handed out.

I'm no longer interested in living in my unit though, and am looking to sell it. This is where I've hit a gigantic snag. No one seems to be able to tell me how I might go about selling my unit since I technically own a percentage of the entire building, instead of a defined unit.

The triplex itself is in all 3 names, but for homestead purposes, was only defined as one taxable property. There of course are 3 definable buildings, with each sharing a common wall and a large lot for parking, but as it stands now, in the eyes of the city, it's listed as a single property with 3 owners.

My questions are:

1. What are my options when it comes to selling?

2. Would I have to convert the triplex from one building in to 3 definable properties before I could think of selling?

3. Would it be possible to have myself and the other 2 owners sign a contract saying that the unit is my 30% share, and have it hold up legally? This would be primarily so I could sell my 30% under the understanding that it would be thought of as a unit, and the potential buyer could not come back and claim they owned a different 30%.

4. Where would be the best place to start? I've talked to a few real estate agents, a couple of people from a title company, surveyors, appraisers and more, but none seem to have a credible answer. Just a bunch of "uhhh, well you probably could tryyyy..". I don't mind these answers as they give me leads, but none of them seem to have any experience in this situation which is why I'm hoping someone here might.

Hopefully I wrote this in the right section, if not..I apologize.

Any help would be appreciated, any questions will be answered to the best of my knowledge.

Thanks in advance.

[faabala]

Seek the advice of a Real estate attorney.

I doubt there is any way to sell your interest. It is one property no matter how many buildings are on it.

You would have to subdivide the lot in a manner agreeable to all parties or convince them to sell.

Maybe the best bet is to just rent your unit and keep the profit.

Who is paying the property tax?

[C555]

Currently, the taxes are divided in to thirds and paid evenly by all 3 owners.

[DMenscha]

Ditto on the attorney advice. You probably have title as tenants in common. As such you could sell your interest, but you would have to find someone who is OK with being a TIC with your relatives.

[Lacerta]

Agreed. You probably can figure out a way to legally sell your share, but it won't be simple. Expect to not get anywhere near market value for it, since someone would have to get a great deal in order to have a reason to jump through the necessary hoops. Definitely get a lawyer involved.

It may not be possible to turn the triplex into three separately owned properties. At least in my area, the building codes are different for a triplex than for townhouses. I don't think my city would approve a lot split for something like this. But a real estate lawyer might be able to help you figure something out.

Honestly, I think your best bet would be to convince your aunt and uncle to sell their shares too, and then sell the whole building and split the proceeds.

[C555]

Unfortunately my Aunt is hellbent on living there until she dies. She has no interest in selling so we're locked in with her.

I'll do what I can in order to hire an attorney, however money is an issue due to having to leave work in order to care for a family member full time. The few attorneys I've talked to don't really care to discuss anything until I'm willing to lay down a sizable check for their time, which is why I was drawn to forums for additional info.

I hate to bother anyone with another question, and I'm not asking for exact laws/precedence, but would it hypothetically be possible to sell my percentages with a contract which dictated that my percentage was represented fully by the particular unit?

I don't want them to be able to come back and say "Well, I own 30% so I want that apartment there!" down the line. Would it be possible that they, while owning the percentage, are contractually only owners of a particular piece of the whole? This of course is relying on the fact that I find someone who is willing to participate on this to begin with, and the other parties sign off..just not sure if that's even legally plausible.

Thanks again for the input.

[Okey Dokie]

Originally Posted by C555

Unfortunately my Aunt is hellbent on living there until she dies. She has no interest in selling so we're locked in with her.

Just curious - what is going to happen when Aunt dies? Is she going to leave her third to you and Uncle? Or to her two or three kids (or whatever). Sounds like this is always going to be a less-than-optimal situation.

Can Aunt and Uncle buy your third out?

[Lacerta]

Disclaimer: I am neither an attorney or a real estate agent, so take my advice as layman opinion only.

A possibility would be to sell the entire building to an investor with a written agreement that your aunt can rent that unit at a given rate for as long as she wants or until she dies, whichever comes first (that way she can't pass the rights to children or anything). Again, you would need an attorney to do this correctly. A deed restriction (or something similar) on the property might be necessary to make sure that if the investor sells, the new owner would have to comply as well.

Honestly, if you can't buy them out and they can't buy you out, this is never going to be an easy deal.

There of course are 3 definable buildings

I missed this part in your original post. If the unit was actually built to townhouse code, you might be able to talk the city into a lot split and then you could sell your unit individually. It would be worth at least a call to explain your situation and ask the question. You may not get anywhere with them, but it doesn't hurt to ask.

If by "3 definable buildings" you actually just mean "3 definable dwellings", that is completely different, and you would likely be wasting your time to try.

Several times you said it was being treated as one lot "in the eyes of the city" or "for homestead purposes". Were the three dwellings ever on separate lots (like townhouses) or has it always been just one lot (like a plex)? If it was on separate lots at some point in the past, the process to turn it back into three lots again would likely be much simpler.


Actually, I just had another thought. Anyone know what the process would be to set up a condo association and convert this plex to condos? Is that even doable? That might be a possibility. In a condo, everyone owns a share of the ground and building, but owns the inside of their unit individually, which is kind of what you need here. It wouldn't be simple either, and would still require an attorney, but might actually be achievable.

[DMenscha]

I meant to suggest making a condo conversion in my first post. If the building has common walls it would be doable (but expensive) in CA.