Disclaimer: This article is for informational purposes only and does not constitute legal advice. For guidance on your specific situation, consult a qualified attorney in Kansas.
Detailed Answer
When two or more co-owners of real property in Kansas cannot agree on a fair buyout price, they may pursue informal or court-based solutions. Below is an overview of the most common approaches under Kansas law.
1. Negotiation and Valuation
Co-owners often start by hiring a professional appraiser to establish a market value. Once both sides have a written appraisal, they can negotiate a buyout price based on that figure. If parties still disagree on who pays for the appraisal or which appraiser to use, mediation can help bridge the gap.
2. Mediation and Arbitration
Mediation lets a neutral facilitator help co-owners reach a settlement. Arbitration goes a step further: co-owners agree to let an arbitrator set the buyout price after hearing evidence. Both options can be faster and less expensive than litigation.
3. Partition Action in Court
If informal methods fail, any co-owner may file a partition action in Kansas district court under the Partition of Lands Act (K.S.A. 60-1201 et seq.).
- Partition in Kind: The court divides the property physically among co-owners if it can be done fairly without materially reducing value (K.S.A. 60-1201).
- Partition by Sale: If dividing the land isn’t practical, the court orders a public sale. Net proceeds are distributed among co-owners according to their ownership interests (K.S.A. 60-1208).
In a partition sale, the court appoints a commissioner who advertises and conducts the sale. After closing, the commissioner files a report for the court’s approval, and the clerk disburses funds to co-owners.
4. Buyout Formula Clauses
Some co-ownership agreements include a formula to calculate buyout prices (e.g., a multiple of net rental income or a percentage of recent appraised value). These clauses can reduce disputes if properly drafted.
Helpful Hints
- Get a written appraisal from a licensed Kansas appraiser to establish a clear market value.
- Consider mediation or arbitration clauses in co-ownership agreements to avoid court delays.
- Gather financial records—tax returns, rental statements—to support your valuation position.
- Be aware that a court-ordered sale may take several months and involve commissioner fees.
- Consult an attorney early to draft or review buyout clauses and plan for potential disputes.