Detailed Answer — How a co-owner can receive monetary compensation rather than physical property

If two or more people own real property together in Alabama and one co-owner prefers money instead of a physical portion of the property, that co-owner has several options to obtain monetary compensation. Alabama law recognizes both voluntary and court-ordered resolutions. The common pathways are (1) a voluntary buyout agreement among owners, and (2) a judicial partition by sale (or partition in kind followed by a sale or buyout). Below are the typical steps, key legal concepts, and practical considerations.

1. Try a voluntary buyout first

A voluntary buyout is the fastest and least costly solution. One co-owner offers to buy the departing co-owner’s share at an agreed price. To succeed:

• Get a written agreement describing the property, the buyout price, payment terms, and any prorations for taxes, liens, or mortgage balances.
• Order a professional appraisal or provide market data so the price is defensible and less likely to be contested later.
• Address how closing costs, outstanding mortgages, and unpaid taxes will be handled.
• Record a new deed after closing to update title (handled by closing attorney or title company).

Voluntary agreements avoid court costs and give parties control over timing, price, and tax consequences. Have any agreement reviewed by an attorney and use a proper real estate closing to protect all parties.

2. Judicial partition if parties cannot agree

If owners cannot agree on a buyout, Alabama law allows one or more co-owners to file a partition action in the appropriate circuit court. A partition action asks the court to divide or sell the property and distribute proceeds among owners.

Key points about partition in Alabama:

• Two basic remedies: partition in kind (physical division) or partition by sale (selling the whole property and dividing proceeds). Courts prefer partition in kind when practicable, but if a fair physical division is impractical or would substantially reduce value, the court may order sale.
• When sale is ordered, the court typically appoints a commissioner or referee to conduct the sale, or the court may direct a private sale under supervision. Net sale proceeds are distributed to owners according to their ownership shares after paying liens, commissions, and costs.
• Any co-owner can ask the court to buy out the other owners’ interests by proposing a cash payment. A court may permit a buyout in lieu of sale if a co-owner demonstrates the ability to pay and the buyout is equitable to other owners.

Because partition is an equitable action, Alabama courts consider fairness, the character of the property, and the impacts on owners. For procedural guidance and to start a partition action, consult the local county circuit court clerk or the Alabama Judicial System at https://judicial.alabama.gov/.

3. Valuation and appraisal

Whether negotiating a buyout or litigating partition, accurate valuation matters. Typical steps:

• Order a licensed real estate appraisal to establish fair market value.
• Account for existing mortgages, liens, and encumbrances; these reduce net proceeds.
• Consider credits for improvements paid by one owner, for waste or damage, and for unequal contributions to taxes or maintenance—these may affect the money each owner receives.

4. Costs, liens, and priority claims

A partition sale proceeds are applied first to satisfy recorded liens (mortgages, tax liens). Sale costs—commission, advertising, attorney fees, and court costs—are deducted before distribution. If one co-owner holds a lien or has contributed more to a mortgage payment or improvements, the court may adjust distributions accordingly.

5. Timing and practical considerations

• Voluntary buyouts can be completed in weeks to a few months, depending on financing and title issues.
• Judicial partition actions can take many months or longer, depending on court schedules, disputes over value, and appeals.
• Co-owners should preserve records of payments, improvements, and expenses related to the property to support claims for credits or reimbursements.

6. How to proceed step-by-step

1. Discuss a voluntary buyout with the co-owners and propose an appraisal-based price.
2. If needed, obtain a certified appraisal and gather records for taxes, mortgages, and improvements.
3. If parties agree, put terms in a written contract and close with a title company or closing attorney.
4. If parties disagree, consult an Alabama real estate attorney about filing a partition action in circuit court. The attorney will explain timing, likely costs, and the chance for a court-ordered sale versus buyout.
5. In court, present valuation evidence and any claims for credits or offsets. You may offer a cash buyout proposal to the court to avoid a public sale.

Relevant legal resources

Find Alabama statutes and code through the Alabama Legislature website: https://www.legislature.state.al.us/. For procedural details and local forms, contact the county circuit court clerk or consult the Alabama Judicial System: https://judicial.alabama.gov/.

Because partition is an equitable remedy handled by Alabama circuit courts, the format of pleadings and practices will follow state civil procedure and local rules. A licensed Alabama attorney can identify the specific statutory provisions, prepare required filings, and protect your rights at every step.

Helpful Hints

• Document everything: keep receipts, mortgage statements, tax payments, and records of repairs or improvements.
• Get an independent appraisal before negotiating; a neutral number reduces disputes.
• If you need cash quickly and a co-owner can buy you out, prioritize a voluntary sale to avoid court delays and fees.
• Understand tax consequences: selling your ownership interest or receiving proceeds in a partition may have capital gains or other tax effects—talk to a tax advisor.
• Consider mediation early—many disputes resolve in mediation with much lower cost and faster outcome than litigation.
• If one co-owner is in possession and excluding others, seek immediate legal advice; possession disputes can affect remedies and timing.
• Always use written agreements and proper real estate closing procedures to update title records after any buyout.