The loss of a loved one and the distribution of their estate is always challenging. When multiple people inherit a piece of real estate and become joint owners as a result, it can become even more complex. You and the other owners may not agree on how best to use the property. One of you may live some distance away and be unable to regularly access the property for upkeep, repairs or management. One owner may not even want to own the property, preferring instead to sell their share and move forward to other ventures.
What can people do when they become a joint owner of an inherited property and want to change this complex situation?
1. Have one heir buy out the others
If one of the co-owners of the property wants to maintain ownership and has enough capital to buy out the others’ share of ownership, that buyout may be an ideal solution. This solution often depends on the availability of funds for that buyout, proper valuation of the property and negotiations to reach a fair agreement.
2. Sell the property and divide the proceeds
In cases where all co-owners agree that they want to move on to new opportunities, selling the property and dividing the proceeds among them may be the best solution.
While this may seem relatively straightforward, it can be important to consider the current real estate market when determining whether to sell the property you own. If real estate properties spend a significant time on the market, for example, you and the other co-owners of the property may face the challenges of managing your property while waiting for a buyer.
3. Consider a partition action
When the co-owners of a property cannot come to an agreement about the future of their real estate holdings, they may want to divide the property though a partition action. This allows some of the co-owners to keep their portion of the property while others can sell their portion.
This solution works for some properties that can easily be divided, but others—such as a single, large commercial building—may not be good candidates for partition.
Determining the best course of action can be challenging when you share ownership of real estate property with others. As a result, it may be beneficial to discuss your property and the challenges you face with a legal professional who can guide you through your options.