What Happens if You Want to Sell, But Your Co-Owners Don’t?

Joint property ownership with friends, family, or business associates in South Carolina can have several advantages, including more purchasing power and shared financial responsibility. Complications may arise from this arrangement, though, particularly if one co-owner wishes to sell and the others do not. What happens if you want to sell but your co-owners don’t?

How to Co-Own Property

When it comes to co-owning property, there are many ways this can be done. Some of these include:

• Tenancy in common (TIC). The property can be sold or inherited separately, and each owner has their own stake in it.
• Joint tenancy. Every owner has an equal portion, and in the event of an owner’s death, the remaining co-owners will automatically inherit that owner’s share. This is known as the right of survivorship.
• Tenancy in its totality. It has additional safeguards against individual debtors and gives advantages similar to joint tenancy, but it is only available to married couples.

When it comes to selling your share, your options are influenced by the type of co-ownership. In contrast to a joint tenancy or tenancy by the entirety, you have more freedom to sell your part in a tenancy in common without the other owners’ permission.

What if We Can’t Agree to Sell?

When you decide to sell your interest in the property, the first step is to communicate openly with your co-owners. Talk about your motivations for wanting to sell and hear what they have to say. It is possible that their problems are ones that can be worked out through discussion. You can negotiate with them through:

• Purchase agreement. Create a proposal for your portion of the property from the other co-owners. This lets you back out of the deal while they can keep ownership.
• Transfer to an outsider. With this option, you can suggest selling your share to a third party.
• Divided by consent. You can decide to sell the entire property and split the money evenly. If there has been a large increase in the property’s value, this may be a good option.

Legal Actions for Partition Actions

If all other options fail and you are still unable to come up with a consensus together, you might have to think about taking legal action. A partition action is the most typical legal remedy available to a co-owner who wishes to sell. Partition actions fall into two primary categories:

• Partition in kind. This is when the co-owners’ property is physically divided by the court. This is not ideal for a single-family home, but it is more realistic for larger amounts of land.
• Partition by sale. The property is ordered to be sold by the court, and the revenues are divided among the co-owners in accordance with their respective ownership stakes. This is the more typical result, particularly in the case of residential properties.

Steps in a Partition Action

• Complaint filing. You have to submit a formal complaint detailing your ownership interest in the property and your intention to sell it to the relevant court.
• Co-Owner notice. The other co-owners will be informed by the court of the partition action and given the chance to comment.
• Hearing in court. To review the arguments and evidence presented by each party, the court will schedule a hearing. Whether a division in kind or by sale is appropriate will be decided by the judge.
• Sale of the property. In the event that the court grants a partition by sale, the co-owners will split the earnings from the sale of the property, which will frequently take place at a public auction.

Dispute Resolution Through Alternative Methods

Before resorting to a partition action, it is recommended to examine other conflict resolution procedures like mediation or arbitration. These methods may be more economical and less confrontational.

Mediation can help the co-owners come to a mutually agreeable resolution with a third party who is impartial and assists in mediating the dispute. Arbitration occurs when an impartial third party hears both sides’ arguments before rendering a legally binding judgment on the matter. Both methods can help preserve relationships and provide a quicker resolution compared to a court battle.

Protecting Your Interests

While it is ideal to be able to sell a property without conflict, if you anticipate potential conflicts with co-owners, it’s wise to take preventive measures to protect your interests. You can draft a co-ownership agreement, include a right of first refusal, which gives the co-owners the first chance to buy out a selling owner’s share, and maintain open and honest communication, addressing issues as they come and preventing escalation.

FAQs

Q: What Happens When One Partner Wants to Sell and the Other Doesn’t?

A: When one partner wants to sell a property, and the other doesn’t, negotiation is often the initial step. They can talk about the causes and work toward a compromise. In the event that negotiations are unsuccessful, the selling partner may file a partition action in court, which could lead to a division or sale of the property that is mandated by the court.

Q: What Is the Co-Owner Rule?

A: The co-owner rule governs the co-ownership of property. The usage and sale rights of the property are typically equal for each co-owner. Until a co-ownership agreement or the law specifically states otherwise, co-owners are equally responsible for all costs associated with the property in relation to their ownership shares.

Q: Can You Sell a House Without a Cosigner’s Permission?

A: Selling a home without the permission of every co-owner is generally not permitted. Because each co-owner’s signature is typically required on the relevant documents to transfer the property’s title legally, joint ownership requires the consent of all co-owners to a sale. Legal issues may result from the conditions of a co-ownership agreement being broken.

Q: Can You Remove a Co-Owner?

A: It is difficult to remove a co-owner from a property title and often needs their permission. A settlement agreement, a buyout discussion, the transfer of their interest, or a lawsuit like a partition action are some of the options to remove a co-owner. To ensure that you are compliant with laws and agreements, it is recommended that you seek legal counsel.

Contact Mack & Mack Attorneys Today

If you need assistance in making a sale with a co-owner of a property, Mack & Mack Attorneys can help. Contact us today to get started.