What To Do With Slacker 1/8 Interest Owner That Doesn't Want to Sell, But 1/2 Interest Owner Does

Question

This is an abbreviated soap opera: There's a house that I'm interested in purchasing; however, there are five interests in the property: 1/2 interest, 1/8, 1/8, 1/8, and 1/8. The first owner of the home had a debt she couldn't repay so she gave her half interest to the fellow she owed money to while her grandkids owned the remaining interests.

The problem is, one of the grandkids has been causing a stink ever since his ownership. He keeps all of the rents that the house produces and won't share with the other interests. Obviously, the poor 1/2 interest fellow feels especially screwed while he has to pay for the property taxes because he doesn't want to lose his stake.

He wants to sell to me, however, we're not sure how to proceed. The other three interests are willing to be paid off their interests.

What should he do? Any advice is greatly appreciated!

Laura Richards · Answer

Thanks for the mentions  @Matt Devincenzo!

@Eric Fiedler first we need to see the Deed or vesting document. These grandchildren may not even have an active interest. They may just have some sort of interest that kicks in upon the death of someone else. Who knows?! You need to start with figuring out exactly who owns what and how.

Everyone is pointing you in the right direction from a legal perspective, but honestly, I think you  were warmer with your idea of just buying the other guys out - depending on how much the pain the $#! guy is going to want. Again, look and see who owns what and how; then you may be able to buy them out for what you would end up spending on a partition action.

The thing with a partition is just as Bill G mentioned; it's not a guaranteed thing, can be a long process and the parties may not end up with property in the end anyway. Second, you have no ownership in the property so you can't bring this partition action. Who is going to file the case? Certainly not the pain in the $#! collecting rents. Sounds like he has no problem with the current arrangement.  Are the others motivated to sue?

Last thought...you mentioned the 1/2 interest guy is someone the grandmother owed money to. Did he have a lien against the property; like a mortgage and note? Assuming the 1/2 interest wasn't enough to satisfy the loan, you could purchase the note and foreclose.

Either way, you need a real estate attorney to look this property up and tell you exactly who and what you are dealing with.

Mitch Stanley · Answer

It's called - Partition  Action  (  A partition action can be brought to divide the property in individual shares among the owners.)

Good Luck,Mitch S.

Bill Gulley · Answer

I did miss the OP's position, thinking he had the 1/2 interest.

I had a huge mess I've posted about before, a funny story, but I'll spare you. Two unrelated ladies had 1/2 interests in basically 7 adjoining properties/dwellings along a river and one refused to sell. I bought the 1/2 interest and then called my new partner, she said many things like I couldn't do that. Couple days later I got a call from her attorney, she said she had acquired the interests of her client and began rattling her sabers. I suggested we meet and see what we bought. We did, spent a couple hours walking the property, each saying what we like about the properties, 3 minutes out of town along the river and what we might do. After hearing her veiled threats for an hour, we were in the end house looking out the big picture window at the river (like 50 feet away) and she said, "I think I'll move in this house" and I replied "I hope you sleep on the left side of the bed because I sleep on the right!"

Her mouth dropped, looked at me and a moment later said "we have to work this out don't we?" And I said "yes, we do!"

Funny part I left out is that all the ladies involved were gay and I knew it, me moving in with an undivided one half interest cinched the deal!

We split it up, I did a minor subdivision and cleaned up the encroachments with new lot lines and we both netted a property out of the deal. (Mine being the bigger, nicer one with the barn, pasture, professional tennis court and an A Frame, she got a small log cabin. ) All were happy!

So, as has been mentioned, take charge, guide the parties to a conclusion, check carefully at what there is before moving on anything and make it happen if it's even worth the effort. Good luck. :)

Bill Gulley · Answer

Yes, it is a partition suit, just be aware that no one is guaranteed to end up with a property, if you bring the action you can ask to buy the other interests, but the process isn't always a shake n bake. If the parties don't agree to value, it will be appraised, that too can be contested, a second appraisal may be ordered and, usually the average of the two taken as value, The property can be ordered to be sold, auction will usually bring less and cost can be higher than a listing with proceeds paying attorney fees, court cost and the proceeds disbursed. So, talk to your attorney.

As to the tenant, might not be able to just make a demand for rents, the tenant is obligated to that owner named in the lease, it's not the tenant's responsibility to divide up or choose the amounts due the owners. The tenant might cooperate, might not, best to get a court order as to rents, this could be a separate matter or in connection with suit to partition the property. You might get it all done in short order, maybe 45 days and done, might be a year+ depending on many variables, setting court dates between 4 attorneys might be fun, out of town is another issue.  See your attorney :)

Steve Vaughan · Answer

Why the heck is the 1/8 owner getting the rent?  Have the 1/2 owner direct the tenant to pay rent to them immediately.  At least while the legals are being worked out, the rents can help cover the operating costs/taxes.

Karen Margrave · Answer

@Matt Devincenzo

did you want to mention @Laura Richards  Maybe she can weigh in.

Matt Devincenzo · Answer

Call a local RE attorney and ask them about a suit to force sale...I forget the type of suit, but it is do-able. I wouldn't try anything yourself, let the attorney handle it and I would imagine with 87.5% of the ownership wanting to sell it will be a pretty easy case to get resolved.

Edit: I just noticed you're in Orlando, there is a local attorney I use that is also a member here on BP so hopefully she can chime in. Look up Laura Richards here and she can probably give you an idea of what would be required

Account Closed · Answer

There's nothing preventing a partial owner from bidding at the court forced sale.....but likely it would be an inefficient and costly way to gain title.  The cost of the case plus the cost of the courts holding the sale....to gain 1/8 interest.  Really depends on value to know if it's worthwhile.  There might be a adverse possession/quiet title angle if the 7/8s owner has possession and pays the taxes for the required number of years.

My experience is that making offers to owners of partial interests, which I've done several times, makes the players make-up and agree to sell.  They are usually quite offended and disturbed that the value of their "partial interest" does not correspond to their percentage of ownership.

Bob E. · Answer

If @Eric Fiedler  buys 7/8 of the interest in the property can he then bid on the property at auction with 7/8 of the proceeds going back to him and 1/8 to the PITA?

Guy Gimenez · Answer

Not sure about other states, but partition is quite effective in Texas. Of course, you wouldn't be filing the action because you have no interest in the property, it's between the interested parties. To my knowledge, nothing in this world is guaranteed outside of death. The one thing I can assure you is this. You can try to make something happen or your can hope something happens. Never seen anyone gain wealth by hoping my friend.

What To Do With Slacker 1/8 Interest Owner That Doesn't Want to Sell, But 1/2 Interest Owner Does

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