Disclaimer: I am not a lawyer. This article provides general information about Delaware law and steps people commonly take when buying out co-owners of real property. It is not legal advice. For help tailored to your situation, consult a licensed Delaware attorney.
Detailed Answer
If you want to keep a home that you currently co-own with siblings, the usual path is to buy their ownership interests or, if they refuse, pursue a court partition. Below are clear, practical steps and the legal concepts you need to understand under Delaware law.
1. Confirm who owns the property and how
Start by getting a copy of the recorded deed. That deed shows the owners’ names and usually lists whether ownership is as joint tenants (often with right of survivorship) or tenants in common. Tenants in common each hold a divisible share and can sell or transfer their share. Joint tenants often have survivorship rights that affect what happens if an owner dies.
Where to look: obtain a copy of the deed from the county recorder of deeds for the county where the property sits, or request a title report from a title company. You can also review Delaware title and property law at the Delaware Code: Del. Code Title 25 (Property), and general civil procedure/practice at: Del. Code Title 10 (Courts & Judicial Procedure).
2. Order a title search and identify encumbrances
Have a title company or real estate attorney run a title search to find mortgages, liens, easements, or unresolved claims. The outstanding mortgage balance and liens affect how much you must pay to clear the co-owners’ economic interests.
3. Get a current market value (appraisal)
Hire a licensed appraiser or use a broker price opinion to determine fair market value. This gives a neutral number to base any buyout on. Example calculation: if the home appraises at $300,000 and you and two siblings each own 1/3, each sibling’s one-third interest is roughly $100,000 (subject to mortgage allocation and closing costs).
4. Calculate each owner’s net share
To determine the cash amount required to buy out siblings, subtract the portion of any secured debt allocable to their interests and consider closing costs and potential tax consequences. A simple starting formula is:
Buyout amount = (Your sibling’s ownership percentage) × (Market value) − (Sibling’s share of mortgage/liens)
5. Discuss options with your siblings
Talk early about whether they want cash, a promissory note, or other consideration. A voluntary agreement is faster, cheaper, and preserves family relationships. Put offers in writing. Consider using a mediator if negotiations stall.
6. Decide how to fund the buyout
Common methods:
- Refinance the existing mortgage in your name alone and use proceeds to pay siblings.
- Get a new mortgage or home-equity loan to pay siblings.
- Pay cash from savings.
- Offer a structured payment (promissory note) secured by the property—this requires precise documentation and will likely need a mortgage or deed of trust and should be drafted by a lawyer.
7. Draft a written buyout agreement and deed transfer
Put the terms in a written purchase agreement: price, closing date, how taxes and closing costs are split, what happens to existing mortgage, and representations (e.g., no additional encumbrances). At closing, have your siblings sign a deed transferring their share to you (commonly a warranty deed or quitclaim deed depending on negotiations). Use an escrow or title company to handle funds and recordation.
8. Close and record the deed
Close with a title company or attorney. Once the deed is signed and notarized, record it at the county recorder so the ownership change becomes part of the public record. If you refinance, notify the mortgage servicer and confirm the mortgage is reissued in your name only.
9. Pay applicable taxes and follow recording rules
There may be transfer or recording taxes and documentary fees when ownership changes. The county recorder or a title company can provide exact amounts and filing instructions. For statutory guidance on property conveyance and recording generally, see Del. Code Title 25.
10. If a sibling refuses to sell: partition action
If voluntary buyout is impossible, Delaware law allows a co-owner to file a partition action to force a division or sale of the property. Partition is an equitable remedy: a court can physically divide land (rare for a house) or order a sale and split proceeds among owners. Such suits are typically filed in Delaware Superior Court or other proper civil court. Review Delaware court procedures and consider hiring an attorney because partition litigation can be costly and unpredictable. For court practice and the relevant procedural framework, see Del. Code Title 10 and the Delaware Courts information at courts.delaware.gov.
Additional legal concepts to know
- Tenancy in common: each owner has a divisible share—best suited for buyouts.
- Joint tenancy with right of survivorship: if a co-owner dies, their interest may pass automatically to surviving joint tenants, which changes buyout options.
- Quiet title: if ownership is unclear or someone claims an interest, you may need a quiet title action to clear the record.
- Tax consequences: a buyout can have capital gains and gift-tax implications. Consult a tax advisor for specifics.
Helpful Hints
- Start with simple, open conversations — many buyouts succeed without litigation.
- Use a neutral appraiser so everyone trusts the valuation.
- Have a written agreement even for family deals to prevent misunderstandings later.
- Work with a Delaware-licensed real estate attorney or a title company for deed language, escrow, and recording procedures.
- If refinancing, get preapproval first so you understand how much you can borrow alone.
- Keep records of all offers, communications, and payments in case any dispute leads to court.
- If a sibling lives in the home, consider how buyout timing affects their occupancy rights—put occupancy rules in writing if needed.
- Budget for closing costs, recording fees, and possible transfer taxes; your title company will estimate these.
- If talks break down, consult an attorney before filing a partition action — court costs can exceed the value of a co-owner’s share.
- Because procedures vary by county, use local county recorder and court resources or a Delaware attorney to ensure compliance with local recording and filing rules.
If you want, I can outline a sample buyout offer letter, a checklist of documents to collect, or a list of questions to ask a Delaware real estate attorney or title company.