Family Money Home Renovation: Brother Fails to Pull His Fair Share in Home Renovation

Q: I entered into a contract with my brother to renovate a house. The agreement was that we would be reimbursed for what we paid to renovate the home and then split the profit equally.

The house was a disaster. I put in all the money, and hired and paid for all the contractors. My brother did nothing. The house will be worth so much more now due to my investment in time, labor and money.

Family Money Home Renovation: Should my brother get 50% of the profits?

Is he still entitled to that 50 percent of the profits? To me, it feels like he didn’t enter into this agreement in good faith and is not entitled to half the profits. I don’t know what to do or if there is anything I can do.

Even family members need partnership agreements when starting on a home renovation project

A: The operative words in your question are that you entered into a contract with your brother. We’re hoping the contract is in writing and spells out what each person’s obligations were in renovating the house.

It may be hard to prove whether your brother signed the contract in good faith. But the contract terms could help determine whether you can break the contract or change the arrangement.

A real estate attorney can help draft home renovation contracts when family money is in play

Did you have an attorney draft the contract for you? Or, did you and your brother get together and draft it yourselves? If you had an attorney draft it, the document should spell out what each of you needed to do and what would happen if one or the other failed to perform under the contract.

But let’s back up: you seem surprised by the way your brother has behaved. Presumably, you’ve known your brother your whole life. You must know how he behaves and could have guessed how he would handle this type of situation. Still, you decided to move forward with him. So, is his behavior out of character? Did something happen in his life to cause that? Can you forgive him for screwing up?

Family Money Home Renovation Projects Are Challenging

Mixing family, money and home renovation projects can be challenging. If you focus only on the money, you risk losing your family. And, that’s quite a high price to pay. So, the first thing you should do is sit down with your brother and express your frustration with how he managed his part of the arrangement. Try to clear the air. Listen to his explanation of why he didn’t get more actively involved in the renovation. Maybe you’ll feel better, and the two of you will smooth the path going forward. If he agrees that he didn’t put in an equal share of time or money, ask him how he thinks that should affect the division of the profits. Perhaps you’ll both agree that he should be entitled to less.

Or, not. Perhaps you’ll hear that he tried to get involved, but you took the reins, were controlling and made it difficult for him to join you in making decisions. This could be an emotional conversation, and once everyone gets riled up, it may be difficult to come to a happy resolution.

Attorneys can mediate between family members over home renovation money drama

If you don’t get anywhere with a heart-to-heart conversation, then you should talk to the attorney that drafted the contract. The attorney can help you determine what your remedies are for your brother’s failure to do anything. That attorney may refer you to a different attorney, particularly if the attorney represented both of you in drafting the agreement. Your original attorney would have a conflict in giving you any advice that would go against your brother’s best interests.

If you drafted the contract yourselves, then you’ll need to find an attorney with experience in partnership issues. If your brother is open to it, you might be able to work with a mediator, which should be a less expensive and potentially better experience than suing your brother in court.

Family money drama – try to talk first, sue later

Still, if you go to court or work with a mediator, you might not win a larger share of the profits even if you did all of the work. It depends on what your contract says. And, regardless of the final decision, you’ll spend money and time getting there.

What you should get, however, is full reimbursement of all the money you spent doing the work. You would subtract those costs, and any costs of sale, from the final sales price. Then, the profit would be divided. So, at least you won’t be out extra cash.

Good luck with this. And, remember, you can always earn more money. But, it’s tougher to replace family.

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©2023 by Ilyce Glink and Samuel J. Tamkin. Distributed by Tribune Content Agency.