What legal options do I have if a co-owner refuses a buyout for an inherited property?
Detailed Answer
When you inherit real estate with one or more co-owners in North Carolina, you hold the property as tenants in common. Each co-owner owns an undivided interest in the whole property. If one owner offers to purchase the shares of the other owners and a co-owner refuses, state law provides clear paths to protect your interest.
1. Obtain a Professional Appraisal
Start by hiring a licensed appraiser to determine the fair market value of the property. An independent appraisal sets an objective price. You can use this figure to support your buyout offer and to show the court you acted in good faith.
2. Attempt Mediation
Before heading to court, consider mediation. A neutral mediator can help you and the unwilling co-owner explore options such as installment payments, refinancing, or selling to a third party. Mediation often saves time and legal fees.
3. File a Partition Action
If negotiations and mediation fail, you can file a partition action in Superior Court under North Carolina General Statute § 46-4. In a partition action, you ask the court to:
• Divide the property into separate parcels (partition in kind), if practical.
• Order the sale of the property and divide the proceeds (partition by sale) when a physical division isn’t feasible.
The court appoints a commissioner to oversee appraisal, sale, and distribution of proceeds according to each owner’s share. You must serve the co-owner with the summons and complaint to start the process. After hearing evidence, the court issues orders to complete the sale or division.
4. Consider Tax Implications
A court-ordered sale can trigger capital gains tax based on the difference between the property’s basis and its sale price. Consult a qualified tax professional early to estimate any potential liabilities and plan accordingly.
Steps to Take When a Co-Owner Refuses a Buyout
- Hire a licensed appraiser to establish the property’s fair market value.
- Send a formal, written buyout offer at or near the appraised value.
- Explore mediation or other alternative dispute resolution methods.
- File a partition action under N.C.G.S. § 46-4 if discussions break down.
- Understand court procedures: preparing the petition, serving co-owners, attending hearings, and following the commissioner’s sale orders.
- Review potential tax consequences with a tax advisor before proceeding.
- Consult an attorney experienced in probate administration to guide you through each step.
Facing a co-owner who refuses a buyout can feel overwhelming. North Carolina law provides strong mechanisms to end co-ownership and protect your rights. Pierce Law Group’s attorneys handle probate administration and partition actions every day. Let us guide you through appraisal, negotiation, mediation, or court proceedings. Contact us by email or call (919) 341-7055 to discuss your situation and plan your next steps.
