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Roger, Lawyer
Category: Real Estate Law
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Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Brother A & Brother B are tenants in common on a small property;

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Brother A & Brother B are tenants in common on a small property; only Brother A could qualify to be on the loan; Brother B wants to sell his interest in the property to Brother A; over the past few years, Brother A has put $100K into the property (monthly mortgage, PITI, maintenance fees, etc); Brother B put in roughly $25K for the downpayment. Question: can either Brother (tenants in common, only Brother A is on the loan) file suit to force the sale of the property ? If so, could any qualified buyer, INCLUDING Brother A, buy the property at Fair Market Value ? Finally, we would assume that the Court would consider all expenses paid by each Brother to equitably divide any profit remaining after the property was sold, etc - correct ??
Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question. I'll be glad to assist.

1. YES, either owner can file a partition lawsuit to force the sale of the property. The other owner cannot stop the partition action and the property will be sold.

2. YES. With a partition lawsuit, the court will order that the property be appraised, and once that occurs, the judge will give the owners the opportunity to buy out the other. If there are no takers, then the property would be put up for sale via auction, with a realtor, etc.

3. IT DEPENDS. If there's an agreement between the owners that says the expenses will be added to each owner's basis in the property and that the expenses paid will be paid back from the proceeds of the sale of the property, then YES, the parties would be repaid. However, if there's no written agreement stating that each party is entitled to what he/she paid in over the period of the ownership, then there's no guarantee. Instead, the judge would have to decide this. But usually, any payment volunteered during the ownership doesn't entitle the person to being reimbursed.
Customer: replied 3 years ago.

OK, got it on 1 & 2 above...


As to 3, and just to be sure, since Brother A was the only one could qualify to be on the mortgage (Bother B is simply a guarantor), and the only one with income, Brother A made all monthly payments, etc on the property ($100K to date); as mentioned above, Brother B put up $25K for the downpayment and has not paid any of the ongoing payments toward the property since the original purchase was made, but both Brothers are tenants in common, so regardless of the expenses paid by Brother A, in the absence of any other agreement, if the property sold today, and there was $100K in equity, BOTH Brothers could receive $50K (expenses are NOT considered) ??

That's right. IF there's no written agreement that provides a specific basis structure, then it is very possible and likely that the court would find that the equity be equally distributed.
Customer: replied 3 years ago.

Brother A was absolutely certain that all his monthly payments would be considered in the final distribution, since this is NOT the case, would it be advantageous for Brother A to file the partition suit and simply move the Court to allow him to "purchase" the property ? If so, and Brother A is already the only one on the mortgage, how does Brother A actually "purchase" the property - especially as he is the only Brother on the mortgage ?

IF this were the agreement of both brothers, and both will acknowledge the agreement, then the distribution could go that way. HOWEVER, if the other brother denies this deal, then the best option may be to try and buy the other one out without going through a partition - - it would be better to do it out of court. This is so because through the partition suit, the brother would have to buy out the other one for the fair value of his interest.
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