Shared Property : appraisal value / forced sale

[GJT]

Background

- The property (a cabin on an island in New Hampshire, accessible only by boat) has been in the family for 80 years.
- The deed currently has 2 sisters listed as joint owners of the property.
- One sister died in Arizona in Fall, 2003.
- There had been an understanding (written in the will) that the living sister would be able to purchase the deceased sister’s half at a fair and reasonable amount.
- For approximately 25 years, the property has been used solely by the family of the living sister. The family of the deceased sister has lived too far away to make visiting convenient. They made one visit in Summer, 1987, and did not stay at the cabin.
- The living sister has paid all taxes, maintenance and upkeep of the property, and the building of a fixed boat dock.
- The property was assessed by the living sister in Summer, 2003 at a value of $235K.
- The property was assessed by the family of the deceased sister in Summer, 2003 at a value of $245K.
- In Summer, 2004, the living sister calculated a payment amount of $80K that would be “fair and reasonable” that would give sole ownership of the property to her. This is the most that the living sister can afford to pay. The amount was calculated based upon the appraisal amount ($240K – avg. of both appraisals) divided in 2, less the amount paid in taxes, maintenance, improvement, etc. This payment was not tendered to the family of the deceased sister.
- The property was reassessed by the family of the deceased sister in Fall, 2004 at a value of $345K. They have now asked for half of this amount, which is more than the living sister can afford to pay.


Questions

- Does the family of the deceased sister lose any rights to the property for not having visited or paid towards maintenance, improvements and taxes in approximately 25 years ?
- Can a court force the sale of the property, and divide the proceeds ? If a buyer is found, would the living sister have to pay half of the buyer’s offer to keep possession of the property ? Would she have that option ? The family of the living sister does not want to lose the property. Does the living sister get a “first right of refusal” to buy, and at what amount, i.e., the buyer’s offer price, or the appraisal price ?
- Under which state’s jurisdiction does legality fall ? The state where the property is, or the state where the will is based ? The will was probated in NH.
- Is there a statute of limitation in terms of the costs that the living sister has paid, i.e., if costs are to be claimed against the appraisal price, can all costs, or costs just for a certain period of time be claimed ?
- Who makes the final determination as to the value of the property ?

Thanks very much for any advice that you can offer.

Gordon.

[elklaw]

If money was tendered and the check was cashed, then it was accepted. That should be the end of it. If that is not enough and the check was not cashed or was returned and a counteroffer offered, I advise that you get legal counsel and the living sister and her family file for a deed reflecting sole ownership based on adverse possession with the money paid just being given out of fairness to family and do not worry about the other side of the family since they said nothing for 25 years. The adverse possession period is 20 years and they did know of this property right but did nothing regarding it for 25 years.
FYI
New Hampshire: In New Hampshire, the period of adverse use must be at least twenty (20) years. New Hampshire C. 508, §2.

[Marketeer]

I strongly disagree. It just doesn't work that way. Adverse possession is, by definition, a claim to land owned by someone else. The living sister cannot claim adverse possession on property of which she is a co-owner. The sisters likely should have resolved this while both were still alive, especially in view of the fact that the living sister was paying all of the expenses while the deceased sister retained half ownership.

If the family of the deceased sister, presumably as part of settling her estate, feels that it has a claim to half the value of the property, then I'm assuming the property was held as tenants in common and each sister was free to will her share to whomever she pleased. But, one think you want to do is check to see exactly how the property was titled. If, by any chance, it was titled as joint tenants with the right of survivorship then it passed directly to the living sister outside of probate. That seems to be unlikely in view of the language in the deceased sister's will and the fact that the family, on behalf of the estate, is pressing for resolution of the issue.

It appears that the family of the deceased sister has inherited her share and, since they have no desire to use it, wants to cash out the value of that share. The family of the deceased sister can ask the courts for a partition sale on the property if the family cannot come to some agreement. The courts would order the property to be sold. The living sister can bid for it at fair market value at that point. She does not get a right of first refusal. It goes to the highest bidder. Fair market value is what's going to determine the price if the family cannot come to an agreement. You might try going to mediation first, with a court-approved mediator, to see if you can't come to some resolution.

This will all need to be decided in New Hampshire because that's where the property is located. I'd suggest getting a good real estate lawyer there. You're going to need one.