Many of the properties that I sell in Los Angeles are on behalf of family ownership groups. It may or may not surprise you that more than half of those family ownership groups are at odds with one another, many times because of their joint real estate ownership – some of them to the point where they no longer even speak.
Most of the time, we are dealing with brothers and sisters who inherited properties from their parents. While they may share a strong bond and cherish their relationship as siblings, the complexities of joint real estate ownership can create significant challenges, particularly when it comes to communication and introducing spouses into the equation. As a result, many siblings find themselves contemplating the option of selling their shared properties to forge separate paths and avoid entangling their children in the family co-ownership web.
Here are a few things you may consider if you find yourself in this situation:
- Effective Communication is Key To Any Relationship: Communicating effectively within families is essential for any successful endeavor, and joint property ownership is no exception. However, even the best of friends can struggle to communicate effectively when it comes to shared assets. Siblings may have different priorities, financial circumstances, and visions for the property, which can lead to disagreements and misunderstandings. Emotions can run high, and resolving conflicts may require careful negotiation and compromise. If you happen to be the sibling running the show for the property(ies) it is always best to be transparent and up front about the financials (income and expenses) so that no one feels as if they are in the dark.
- Spouses and Their Opinions Will Almost Certainly Play a Role: The entry of spouses into the equation often adds another layer of complexity. While spouses should ideally support their partners’ decisions, differing opinions, personal interests, and financial considerations can muddy the waters. Spouses may feel compelled to advocate for their own interests, potentially straining the sibling relationship and complicating decision-making processes. What was once a straightforward matter among siblings can quickly become more convoluted and challenging.
- Think About the Next Generation: If you own real estate with your siblings and you yourself have children, ask yourself this question: Do you ideally envision your sons or daughters owning this real estate with their aunts or uncles? If the answer is no, you start planning for the future. Many worry about the potential complications their children might face as co-owners of the property. This concern stems from the desire to maintain harmony within the family and avoid any potential conflicts or burdens that could affect the relationships between cousins, nieces, nephews etc.
Many Siblings Part Ways with their Joint Ownership of Real Estate: To alleviate these concerns, many siblings often find themselves leaning towards the idea of divesting interests from their shared properties and going their separate ways. By doing so, they can ensure that their children do not become entangled in the intricacies of joint ownership and potential conflicts that could arise in the future. This choice allows each sibling and their respective families to maintain independence and pursue their own paths without the added complications that come with co-ownership.
It is worth noting that not all families choose to sell their jointly owned properties. Some families successfully navigate the challenges and maintain harmonious relationships while managing shared assets. These families prioritize open and honest communication, establish clear boundaries and responsibilities, and actively seek to find common ground. Professional guidance from mediators or attorneys specializing in family property matters can also prove invaluable in resolving conflicts and ensuring a fair and satisfactory outcome for everyone involved.
While joint property ownership amongst siblings can no doubt present unique challenges within a family dynamic, with effective communication, clear boundaries, and professional guidance, many are able to navigate these challenges and maintain successful joint ownership.