My wife and brother-in-law recently inherited their parents house in IL. They are 50/50 beneficiaries of the Trust that the home transferred to upon their mother's passing.
BIL want's to move into the house, but does not currently have the means for a down payment, nor the credit to get a loan. My wife does not need a lump sum payment at this time, so is willing to rent her half of the home back to her brother.
She is well aware that entering any type of arrangement like this with family is risking a complete separation of any relationship should things go bad, but she want's to consider it still. She would rather retain ownership of 50% instead of selling to him with owner financing.
What are some possible ways to structure the rent, taxes, etc so that it is fair to both parties. His family and him would be living there so would be responsible for all utilities and general upkeep. I imagine they would split any capital improvements.
Advised my wife that whatever they agree on needs to be written up in a formal contract through a lawyer, but looking at the different scenarios that would make sense for this agreement. What recourse would/could their be if he failed to make rent payments, given that he is 50% owner.
Thanks in advance.
