When Co-Ownership Goes Bad

It is not uncommon for two unmarried people to purchase real estate jointly – whether as a “couple” planning to marry (or not) or, as “roommates” splitting costs, or as co-investors.  What are their options if there is a “falling out” between the co-owners and they no longer wish to own property together.


Most investor co-owners take title to property as “tenants in common”, meaning that each owns half (or other agreed percentage) of the property and each can leave their share of the property to their heirs.  Some co-owners take title to the property as “joint tenants with right of survivorship”, meaning that if one dies, the other gets the entire property (heirs don’t inherit).  This type of arrangement is common between couples who are not married; when times are good, they each want the other to have the property upon the death of one.


When things between co-owners go bad, there are three general options to consider:

  • The co-owners can “tough it out” and continue to own the property together, share expenses fairly and treat the property as a joint investment.  Obviously this requires cooperation and some give and take.  In most cases this will not be possible because of the potential hard feelings between the co-owners.
  • The co-owners can agree to list the property for sale with a Realtor, continuing to share the expenses of ownership until the property is sold and splitting the net proceeds after all debts and liens are paid at closing.  This option requires some degree of cooperation since the co-owners must agree on a listing price and cooperate in the sale.
  • The final option for co-owners is judicial partition.  This involves one of the co-owners� filing a petition with the court to have the property partitioned.  This generally does not mean that the court will physically divide the property; rather, the court will appoint a receiver to have the property listed for sale at a judicially-approved price (usually based upon appraisals); and once the property is sold, the proceeds of the sale will be divided by the court equitably between the co-owners.

In an ideal world, the best option is usually for co-owners to try to agree on a listing price, hiring a Realtor to sell the property for them, and dividing the proceeds of sale equitably between them.  As observed above, this can only work when the parties still have the ability to work together toward a common goal.  In many cases acrimony prevents this, leaving judicial partition as the only realistic option.  The main drawback to judicial partition is the cost, since it involves attorney fees, court hearings, and the expenses of paying the receiver and appraisers.  It is also a time-consuming process.

Feel free to contact us if you face a situation where co-ownership has turned sour.


– Kevin Palmer

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