Detailed Answer
In Alabama, co-owners of inherited real estate can often avoid a formal partition action by negotiating an agreement among themselves. Under Ala. Code §6-6-2 (2023), any co-owner has the right to seek partition, but they also have the freedom to carve out their own resolution. Common paths include:
- Buy-out: One sibling purchases the others’ interests at a mutually agreed fair market value. This preserves the property intact under single ownership.
- Voluntary sale: Co-owners agree to sell the property on the open market and split proceeds according to their respective shares.
- Co-ownership agreement: Siblings execute a written agreement outlining rights and responsibilities—price, timing for sale, use and maintenance, or leasing arrangements.
- Family trust or LLC: Transferring the property into a trust or limited liability company can streamline decision-making and distribute rental income if you keep the property.
To formalize any agreement, put it in writing, have all parties sign, and record any deed transfers at the county courthouse. If negotiations falter, any co-owner may file a partition action in the Circuit Court under Ala. Code §6-6-20 (2023), which permits either partition in kind (dividing the land physically) or partition by sale. A court-appointed commissioner will value the property and oversee the division or sale, with sale proceeds distributed per ownership percentages. A forced partition can be time-consuming, public, and expensive, so a negotiated resolution often saves money and preserves family relationships.
Statute References:
• Persons entitled to partition: Ala. Code §6-6-2
• Partition by sale: Ala. Code §6-6-20
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Helpful Hints
- Obtain a professional appraisal to anchor buy-out discussions in an objective valuation.
- Use a neutral mediator or real estate attorney to facilitate fair negotiations.
- Document all offers, counteroffers, and final agreements in writing and record deeds promptly.
- Discuss potential tax consequences—capital gains, basis adjustment, gift taxes—with a CPA.
- Consider forming an LLC or family trust for ongoing management if you choose to co-own long term.