Hello everyone, been reading BP and the forums for some time; this is my first post and would really appreciate your opinions & tips. I guess this is more for those who look for some brain exercise as it is a bit complicated case. :)

I'm looking to buy a land which is undivided common property and has 15 different owners (most of whom have equal share of the ownership and owning their part for approximately 20 years). I'm one of the owners (by inheritance).

I would want to gain ownership over the entire land then divide it to two and sell them separately as building sites for building family houses or small condo-buildings. I believe that solving the issues I will be describing would do good to all co-owners as they could finally sell their parts and see some money from their property after just paying property tax and some maintenance costs year after year.

There are some tricky parts in the buying procedure, one of which is a part that has obligations on it. I call this "problematic part". The owner of this part has debts on this property and on another 13 of her properties bundled together in the bank's claim. It is not a typical foreclosure situation as the bank's claim is not coming from mortgage debt. She, the debtor also argues the rightness of the bank's claim, but so far lost all court cases she started. (Therefore she also has debt to the Tax Authority for the legal cost of the cases...) She is a retired lady and (I was told she) suffers from depression because of this whole case.

Because of all this it was really difficult to get in contact with her and finally I only managed to be in contact with her through one of her close friends. The other owners have not managed to reach her (nor her friend) although they would all want to sell their parts as well which is pretty impossible in the current situation.

The owner of this "problematic part" also would want to sell but of course she can't do so in the current situation.

I was talking to the bank's debt enforcer (pardon my English, I might be not always using the proper terms) and was told that they already got an evaluation of the worth of this property because soon it will be put to auction. (Something the debtor and her friend were not telling me...) They have evaluated the property at 720k (in my local currency) and will go on auction for 50% of this so at 360k. The debt enforcer also told me that auctions on this sort of properties are usually unsuccessful - so they are not expecting to have it sold on the first auction.

There is another difficult part among the other parts where I would need to buy the part directly from the local municipality and they evaluated the value of the entire property and calculated the price of the part from the ownership ratio. That way the value came out to 2.25M. (so more than 3-times the value the debt enforcer's evaluation is showing) (Yet, some of the co-owners hope to get even more than this for their part...)

So one of my options is to wait for the auction where I can possibly buy the "problematic part" quite cheap, but where I can possibly end up in a bidding war with one of the other co-owners. I have no idea if any of them is following what's happening with the "problematic part" or if they have any knowledge of the whole story. Most probably they don't have any information and also the debt enforcer is not required to inform the co-owners of the auction (and at the local Land Register they told me that they usually don't inform co-owners).

The other option is that I can ask for a document from the debt enforcer on which I can give a buying offer for the "problematic part". The debtor has to approve this document and then the debt enforcer has to contact all the other parties which have a claim on this part of the property. If they all agree to the sale and the offered price than it is possible to buy out the property from the debt (and so there will be left the other 13 properties in the claim).

So, after all, the question is what would you do in this situation? Would you wait for the auction which might be risky and also means that the other co-owners might get a knowledge of me resolving the problematic situation and thereby making it much more likely to be able to have the entire land sold > which would mean that they would want to sell their parts for a higher price to me. Or would you give an offer to the debtor and the debt enforcer and try to attain the "problematic part" before the auction? And if so how much would you offer as purchase price (to the debt enforcer) and how much would you offer to the debtor/owner of the "problematic part" to make her agree to this type of sale?

Also, how would you handle the other co-owners - most of whom are very mistrustful and would prefer to have them all gathered together and have offered and agreed to the same sales price and not to make agreements with me one-by-one. Also most of them can't gasp that the value of their part is in the 720k ballpark and not the 2,25M ballpark as it would be if the land would not be divided between 15 owners.

So far I only have a pre-purchase contract with one of the co-owners (also at the price of 720k). Offers of similar price to other co-owners have been falling through so far, mostly because of the mistrust issues. Some of them turned me down right before the agreed upon appointment with the lawyer that was made to sign the contract. (Most of the owners are well above 60 y.o., so this is actually understandable in a way - but doesn't make my job easier.)

Also: how do I prevent having the last one or two co-owners selling their parts to me asking some astronomical price? (Knowing that I have to buy from them at pretty much any price to be able to do anything with the land.) Many of the co-owners told me that they would want to be the last one I make a deal with, so they would like to talk to me after I made an agreement with all the others...

Thanks a ton in advance for your insights and tips!

Best regards,

Istvan

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What strategy you'd recommend - buying undivided common property

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