How to Sell a Co-owned Property

There are many situations that might mean that a property is co-owned. Perhaps a family member has died and left in their will a property to all their children. Maybe friends from college or university have all put money into a property to buy it and to live there for a few more years. It is also possible that a newly married couple wants to buy a property but can not afford it so they get money from their parents and family.  People from different cultures and communities might buy a communal home, allowing for multiple families to live there, especially if they are coming from overseas to the US or the UK.  A sports club, or a community group, might buy a property as their main office, combined living quarters. A Sorority might have a home as their main place of living.  In all these situations, the property has multiple owners, which can cause problems if a mortgage is required, or if the property needs to be sold.  Problems like who benefits, who signs, how are the profits shared and what if one or more members of the group do not want to sell it?  How to get around these problems? 

Having a co-owned property when all co-owners agree on what to do with the property is the simplest arrangement. Whilst it is fairly unusual for co-owners to differ on whether a property should be kept or sold, it can happen, and it can be a huge problem when it does. It is obviously assumed that co-ownership of property is a problem if the owners cannot agree on a sale price, or even on the decision to sell. It is possible to use several tactics to coerce a sale in this situation.

In addition to the normal stresses associated with selling a home, obtaining a court order to allow the sale to go through adds an extra layer of difficulty. In the event of a divorce when the former spouses are unable to come to terms over the sale of the property or if mortgage payments cannot be made, legal intervention may be necessary. For the greater good of the neighbourhood, properties may be sold in exceptional situations.

So, what should be done?

To put it simply, in the end, if one of the parties wishes to sell the property, it must be sold. An obvious solution is for one side to simply buy out the other. Except if otherwise agreed upon, the paying party must compensate the co-owner at market value for their ownership interest. A Solicitor will be required to carry out the deal to guarantee that the property is legally transferred and any mortgage issues are resolved.

If the court determines that you have a strong justification to sell a co-owned property, you may be able to get a court order forcing the sale of the property. This is known as a partition action. Since the court cannot simply cut a home in half, it may order the proprietors to sell the property regardless of their objections. The profit or loss from the sale is shared to the owners in proportion of their ownership. However, the laws can alter in the case of a married couple, and if there are assets tied up in the home

In any case, selling when one person does not want to, is always a problem and if it can not be worked out amicably, legal support is needed.  Start with good communication between all parties and take it from there.

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