As Salam O Alaikum!
Our family consisted of parents, TWO sisters & SIX brothers. Over 40 years ago, our father purchased land and initiated construction of a house out of his meager resources. Later on, a house building loan was arranged to complete the ground floor of the house. My father, out of love, registered the property in the name of his eldest son. Being a joint family, the other sons who were employed at the time contributed to run household and repayment of loan. They also later on contributed to build another floor to the house. The complete house has constantly been in use of the eldest brother & his wife & offspring after his marriage while the other siblings occasionally occupied parts of it on & off.
My parents dies one after another a long time ago and the children, that is me, my brothers and sisters, out of love for eldest brother and as a matter of sila-e-rehmi didn't even think about inheritance. None of my father's children claimed the house to be their exclusive property as the surviving ones still maintain that it was for their parents & siblings that they contributed towards building the house.
My eldest brother passed away recently and is survived by TWO ADULT SONS & TWO DAUGHTERS. One son and one daughter still live in this house.
We still maintain that the house was in fact an implied gift to my parents though no legal documents were prepared.
Please advise under Islamic law as to how inheritance be divided, keeping in view that all the other siblings have children as well.

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.

The father registering the house in the name of his eldest son should not be taken into account and the house does not become, by this, the property of that son even if this was written in official papers and the whole world witnessed it. That is because if the father wanted by this registration to gift the house to his eldest son, then this is an injustice in gifting because he had gifted one of his sons and did not gift the others. Therefore, this is an invalid gift that is Islamically rejected either during the life of the father or after his death according to the correct opinion of the jurists .  However, if by this registration the father wanted that the house will be for his son after his death –i.e. after the death of the father –then this is a will for an heir and it is forbidden as the Prophet said: “Allaah has given each one his right and there is no will for an heir.” [Ahmad, At-Tirmithi, Abu Daawood, An-Nasaa’i and Ibn Maajah]

This will can only be effective if all the heirs agree to it. In case the heirs disagree to it, then the house is the right of all the heirs of the father and they should divide it legally amongst them.

As regards the contribution of the children to the expenses of the house, then if this means that all of them contributed in building it and in paying the debts that accumulated due to building it, then there are two cases:

1-    If they did so as a donation from them and a help to their father, and not on the basis of being partners in the ownership of the house, then this is a gift from them and they do not become partners in the ownership of the house, and the house should be divided legally (as an inheritance).

2-    If they did so but not with the intention of donation, but with the intention of being partners in the ownership of the house, then whoever contributed on the basis of being a partner in the house, he becomes a partner in it according to his contribution. If someone contributed half of the house, he gets half of the house, and whoever contributed with a third of the house, he gets a third of the house and so forth. In which case, the heirs divide only the share of the father in the house, whereas the share of the sons who contributed to the house becomes their own property and it is not included in the inheritance. After they die, it becomes an inheritance of their heirs.

It should be noted that the matter of inheritance is very complex an issue, so a mere Fatwa which is an answer issued according to the question is not enough. Rather, the matter should be taken to an Islamic court to look into the case, or it should be presented orally (in person) to the scholars in case there are no Islamic courts. It might be that there is an heir who would not be known except after investigation, and there might also be a will, debts, or other dues that are not known to the heirs. It is known that these rights come in priority over the right of the heirs. Therefore, the inheritance should not be divided without resorting to an Islamic court, if any, in order to fulfil the interests of the dead and the live people.

Allaah Knows best.