How to Put Property Under Contract in Unusual Probate Situation?

[Burt L.]

I have been working with a couple who own a duplex with the father/father in law who died 18 years ago and it was never probated. 20 years ago the husband and father in law bought the duplex as tenants in common with each owning half. 2 years later the father in law died, having two daughters and no other heirs. Thus half of the deceased fathers half of the property would go to each of the daughters, leaving the married couple with 75% ownership, and the other sister with 25%.

After having a trusted attorney research the situation, I learned that since three years have passed that its too late to probate the property (there was no probate at all) but that an abbreviated process called a "Petition for Heirship" is undertaken. In this process the sister/wife who lives in the property with the husband files petition with the probate court (not a formal probate) sends letters to each of the heirs stating in this case that each will receive 25% ownership and if there is objection then a formal hearing is held. If no objection then the court enters an order that each sister receive 25% ownership and sends the order to the recorders office, which changes ownership in  the records. This all sounds quite streamlined, unless there is objection.

I would like to put the property under contract, and have offered to pay the legal costs which are about $1,500 if no objection from the other sister who lives out of state. Unfortunately, I cant put the part of the property that the out of state sister owns under contract, as she's not on title yet, and has proven to be contentious with the resident couple, but she has stated that she agrees she will ultimately own 25% of the duplex. /

Its been suggested I put in the contract that "Closing will be 30 days after Court/Attorney approval".

This is fine, but I don't have agreement from the final 25% ownership of the property. My concern is that after the process is completed, the price wanted for the property will immediately increase dramatically if I don't have agreement beforehand. Its seems that I can only enter into agreement to purchase 75% of the property, unless I enter into agreement with the contentious sister now, who the married couple want to leave out of this and just want her to sign off on the court petition without further involvement or being notified of anything else now.

How can I put  myself in the best position to obtain the final 25% ? The price I put in the contract will be for entire purchase amount, which the other sibling will receive a prorated 25% of. I may have to increase her compensation for the final 25%, but the 75% ownership purchase price will be locked in. I need to have some language about the final 25% in the contract but wont have the signature of the other, non-resident sister.

This is an odd one, as there is no Personal Representative that can legally bind the other sister. The property is very poor condition in a good area and worth rehabbing.

[Chris Mason]

Hi Burt,

My question to my lawyer, in your shoes, would be if we can write in the contract "SellerName1, SellerName2, and any additional persons with a minority ownership interest who might yet be identified by a court" as the seller. I have absolutely no idea if this would fly and I've never seen that.

[Burt L.]

I will certainly inquire about how I can write a contract with "an additional minority interest who might yet be identified by a court".

Otherwise, I have to negotiate separately with the sister after the probate court has ordered the title percentages be "corrected" to where they probably should have been 18 years ago if a timely probate had been filed. Although the siblings have strong, long-lived differences - at that point they will both benefit from a higher price for the property after the legal work has been done and the sister could hold out for a ridiculous price and I cant do much with 75% the interest in the property. A partition action essentially requires it be sold on the courthouse steps to the highest bidder.

My experience is that the longer a property goes without being under a fully binding contract, the more the price keeps going up. I will be thanked for my help, but will hear'" we still  need to get more for the property" after the title/probate  matter has been cleared and the sister is not bound to the initial contract with the other 75% ownership.