Question

We are trying to sort out our inheritance from our mother and fathers house, which was owned by both (50/50). My father has passed away. We are looking to split the house share between myself, my mother and 4 sisters. Recently had a full house renovation, from a 3 bedroom house with a loft room, 2 bathrooms, kitchen extension and standard cellar. After the renovation the house is now a 5 bedroom house, 3 bathrooms, dormer extension, rear and side extension, and a large room in the cellar. The money spent on the renovation; My father had £100,000 that we intended to use for the renovation. We have used that £100,000 in the house renovation as intended. The total cost of renovation was around £250,000. We used the £100,000 we intended to use for the renovation, and the rest (£150,000) I have contributed myself. When my father passed away in 2017, the value of the house d £450-470k. Total money spent in the house was around £250k. Currently I have had the house valued at £700-750k. Inshallah my intention is to stay in this house with my mother and my family. I have some questions to ask if you can please guide me: 1. Do we split the shares based on the value of the house price when my Father passed away or today’s value? 2. What would be the best way for us to distribute everyone’s share of the house? 3. How would it work with the money I have spent in the house renovation? 4. If I was looking to buy my sisters shares, and we put a time frame to pay them is that allowed? 5. Can I also buy mothers share off her, if she is willing to sell it to me? JZK

Answer

Before answering your specific questions, we would like to highlight some key points regarding the distribution of inheritance.

When your father passed away his share of the house should have been distributed amongst his heirs. Hence, his 50% share of the house will now be distributed amongst the family members mentioned including your mother. Your mother will also retain ownership of her original 50% share of the house.

You mentioned that your father had kept £100,000 aside for the renovation of the house. If the renovation took place after your father passed away then that would mean that the £100,000 which he had left no longer belonged to him. Rather, his inheritors would all have a share in that £100,000 according to their share of inheritance. It would not be permissible to use this cash to renovate the house unless all inheritors agreed to this.

Now coming to your questions:

1. All inheritors will have a share in the house according to their share of inheritance. Hence, if the value of the house increases over time the value of their share will also increase. The market value if the property at the time of distribution will be taken into consideration not the value at the time of your father passing away.

2. The shares of the house could be distributed in one of the following manners:

a. If the family members wish, they can all retain their percentage share of the house. If you are going to be living in the house then the remaining family members could either allow you to live in their share of the house for free or they could charge some rent according to their share.

b. Inheritors can sell their share of the house to you. In this case each inheritor must agree a price at which they will sell the house to you. Inheritors do not have to agree on the same price, rather, any price which is mutually agreed between yourself and the inheritor would suffice.

c. The entire house could be sold and the cash can be distributed.

d. Inheritors may choose to take some other asset in place of their share in the house. For example, if the share of one inheritor in the house is worth £100,000, and there is also £100,000 of cash, they may choose to take the cash and in consideration their share of the house will be distributed amongst the remaining inheritors according to their share of inheritance.

3. This would depend on your agreement with your family. If the renovation was done after your father passed away then you were essentially renovating the assets of the inheritors. If there was an understanding that the inheritors will pay you back then it will be treated like a loan and each inheritor will owe you according to their share of inheritance.

If there was no such agreement then this would be considered a charitable act on your behalf and other inheritors cannot be liable for this amount. If you are going to purchase the house from inheritors you could factor this into the purchase price and therefore request a reduced price. It would then be up to the inheritors if they agree.

4. Yes this would be permissible. The price must be fixed and cannot increase if you do not meet the deadline.

5. Yes, if she agrees to sell her share.

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel