Whether you want to keep the property or want your co-owner to pay you for your share, a buyout is often the cleanest way to end a co-ownership dispute. Here is how buyouts work, how the price is set, and what happens when one falls apart.
A co-owner buyout happens in one of two ways. The co-owners agree on a price and sign a deed, or a court supervises the buyout as part of a partition action. Most buyouts start as negotiations and end in court only when one co-owner refuses to talk, cannot get financing, or will not agree on a price.
Either way, the same questions come up. Who has the right to buy? What is the property worth? Who gets credit for the mortgage payments, taxes, and repairs? And how does the buyer pay for it when the departing co-owner is still on the loan? The guides below answer each of those questions.
Buying Out a Co-Owner by Agreement
The fastest buyout is a voluntary one. The co-owners agree on a price, the buyer pays off or refinances the loan, and the departing co-owner signs a deed. The risks are in the details: an agreement written without a lawyer can leave the seller on the mortgage or the buyer without a clear deadline to close.
- Can I Remove My Co-Owner From Title?
- Can a Partition Action Be Avoided Through Negotiation?
- Should I Use an Escrow for My Co-Owner Buyout?
- The Hidden Dangers of Do-It-Yourself Co-Ownership Settlement Agreements
- What Happens When a Co-Owner Refuses to Communicate About a Sale or Buyout?
Buyouts Inside a Partition Action
When talks fail, a partition action gives the buyout structure. Under the Partition of Real Property Act, which governs partition actions filed on or after January 1, 2023 for property held as tenants in common, the court first sets the property’s fair market value. If a co-owner then asks for a partition by sale, the co-owners who did not ask for a sale may buy out those who did at the court’s value. Filing a partition action alone does not trigger that right; the request for a sale does. Property held in joint tenancy has no statutory buyout, though the co-owners can still agree to a partition by appraisal.
- Can a Co-Owner Buy the Property in the Partition Action?
- My Co-Owner Asked for Partition by Sale. Can I Buy Out My Co-Owner?
- Can My Co-Owner Buy Me Out If I File for Partition?
- Partition by Appraisal in California
Setting the Buyout Price
The buyout price starts with the property’s value, but it rarely ends there. Under Code of Civil Procedure section 874.316, the court usually appoints a neutral appraiser, and any co-owner can object to the appraisal. Then come the credits: a co-owner who paid more than their share of the mortgage, property taxes, or improvements is generally repaid before the remaining equity is split.
- Appraisals of Fair Market Value Under the Partition of Real Property Act
- Partition Offsets and Accounting in California
- How Can I Calculate My Share in a Partition?
- I Paid the Mortgage. Can I Get It Back in a Partition?
Paying for the Buyout and Handling the Mortgage
Most buyouts succeed or fail on financing. The buying co-owner usually has to refinance, and the departing co-owner usually wants off the loan. Higher interest rates, lender approval for a loan assumption, and transfer taxes can all change what a buyout really costs.
- Can Your Co-Owner Buy You Out if You Are on the Mortgage?
- Mortgage Assumptions in Partition Actions
- How to Remove a Co-Owner From a Mortgage
- Should I Stay on the Mortgage of a Co-Owned House?
- Rising Interest Rates on Co-Owner Buyouts in a Partition
- Taxes Every California Real Estate Owner Should Understand
Buyouts in Common Co-Ownership Situations
Who the co-owners are shapes the buyout. Siblings who inherited a house often want one heir to keep it. Former couples usually need a clean break from the mortgage. Parents who helped a child buy a home want their money back without forcing a sale.
- Inherited Property Partition Attorney in California
- Can I Keep One Property and Sell the Other in a Partition?
- How Do I Get My Ex-Boyfriend Off the Deed in California?
- I Paid the Down Payment and Mortgage. Does My Ex Get Half?
- I Helped Fund My Child’s House and I’m on Title. What Are My Options?
- What If the Co-Owner of My House Is in Prison?
When the Buyout Falls Apart
You cannot force a co-owner to buy your share. If your co-owner will not commit to a price or cannot close, the answer is the same one California law has always given co-owners: the absolute right to partition. If no one completes a buyout, Code of Civil Procedure section 874.318 directs the court to divide the property if it can be fairly divided, and otherwise to order it sold, with the proceeds split after each co-owner’s credits.
- Can You Force a Co-Owner to Buy Your Share?
- Can a Holdout Get a Better Deal in a California Partition Case?
- Buying and Selling Fractional Interests in Real Estate
- How Are Proceeds Divided After a Partition Sale?
- How to File a Partition Action in California
Buyout Statutes Under the Partition of Real Property Act
- Code of Civil Procedure section 874.311: when the Partition of Real Property Act applies
- Code of Civil Procedure section 874.313: how the Act relates to the other partition statutes
- Code of Civil Procedure section 874.316: how the court sets fair market value
- Code of Civil Procedure section 874.317: the co-owner buyout
- Code of Civil Procedure section 874.318: what happens if no one buys
See every section in our California partition statutes library.
Talk to a Partition Attorney About Your Buyout
With over 650 partition actions handled, Talkov Law helps co-owners on both sides of a buyout get a fair price and a clean exit. Call (877) PARTITION (727-8484) or reach us online.
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