Detailed Answer
This answer explains how someone in Michigan can make a formal offer to buy out co-owners while a partition action is pending, and how to try to resolve the dispute before a court orders a sale. This is an educational overview only and not legal advice.
1. Understand the legal context
In Michigan, a partition action lets a co-owner ask a court to divide jointly owned real property or to order its sale if division in kind is impracticable. The partition statutes govern the procedure for starting and resolving these actions. See Michigan Compiled Laws on partition (MCL 600.3201 et seq.) for statutory background: MCL 600.3201.
2. Timing: act quickly and in writing
You can make a buyout offer at any time — before filing, after the action begins, or even after the court sets a sale. A written, signed offer is essential. If the court has scheduled a sale, notify the court and the parties in writing of your written settlement offer and request a short stay to allow settlement discussions or mediation.
3. Steps to prepare a credible buyout offer
- Confirm ownership shares and legal title. Check the deed, any recorded agreements (co-ownership agreements, right-of-first-refusal clauses), and whether the tenancy is as joint tenants, tenants in common, or held through an entity.
- Get a current market value. Order a professional appraisal or at least a broker price opinion so your offer reflects real market value. Estimate each co-owner’s share based on ownership percentages.
- Review encumbrances and costs. Identify mortgages, liens, taxes, assessments, and anticipated closing costs. Your offer should state who pays these items or show the net payoff treatment.
- Decide offer structure. Options include a lump-sum cash buyout, seller financing, installment payments with security, or buying only the property and assuming mortgage(s). Be clear about down payment, payment schedule, interest, and default remedies.
- Draft a clear written offer. Include: property description, buyer and seller names, precise purchase price and how it was calculated, allocation among co-owners, deposit amount and escrow agent, closing date, contingencies (title, inspection, financing), who pays liens/taxes, form of deed to be delivered, and remedies for default. Consider adding a confidentiality clause and whether the offer expires.
- Attach supporting documentation. Attach the appraisal, proof of funds (if a cash offer), draft escrow instructions, and a proposed settlement agreement and dismissal or stipulation form for the court.
4. Presenting the offer to co-owners and the court
Send the offer by a traceable method (email with read receipt plus certified mail or process server where appropriate). If a partition suit is already filed, serve copies on the parties’ counsel and file a notice on the court docket that a settlement offer has been made and whether you ask the judge to stay any sale or other proceedings while parties try to settle.
5. If co-owners accept
Have a settlement agreement prepared that includes the buyout terms and a provision for dismissal or entry of a consent order resolving the partition claim. File the stipulation or consent judgment with the court and present it to the judge. The court will usually approve a voluntary settlement that resolves the dispute and may dismiss the case if terms are met.
6. If co-owners refuse
If they reject the offer, you can:
- Make a better (higher) offer, if feasible.
- File a motion asking the court to approve a buyout plan you propose (sometimes courts will approve an internal sale among co-owners under agreed terms).
- Participate in court-ordered mediation or settlement conferences.
- Prepare to bid at any judicial sale or sheriff’s sale that the court orders; sometimes a post-judgment sale gives you a chance to purchase the property through the sale process.
7. Closing mechanics and documents
When parties agree, work with a title company or closing attorney. Expected documents include:
- Settlement agreement and mutual releases.
- Deed (quitclaim or warranty depending on negotiation).
- Affidavits required by title company (no-year-of-occupancy affidavits, etc.).
- Escrow instructions showing disbursement to co-owners and lien payoffs.
- Recorded deed and updated title insurance (if purchased).
8. Consider tax, mortgage, and liability consequences
A buyout can create taxable gains or losses and can affect mortgage liability if loans are assumed. Consult a tax advisor about capital gains and a lender about releasing co-signers or assuming a mortgage.
9. When to get a Michigan attorney involved
Talk with a Michigan real estate or civil litigator before making the offer if the partition case is already filed, there are mortgages or liens, or the ownership interests are disputed. An attorney can draft settlement language, prepare a stipulation to dismiss, advise on court filings, and ensure the deal will close cleanly and be enforceable.
Statutory reference
For the statutory framework on partition actions, see Michigan Compiled Laws, MCL 600.3201 et seq.
Important disclaimer
This information is for educational purposes only. It does not create an attorney-client relationship and is not legal advice. For advice about your specific situation, consult a Michigan attorney.
Helpful Hints
- Get a professional appraisal before making an offer — accurate value reduces disputes.
- Confirm each co-owner’s legal ownership percentage by checking deeds and recorded documents.
- Put every term in writing and set a firm expiration date for the offer.
- Include proof of funds with a cash offer; lenders want to see a preapproval letter for financed offers.
- Propose a joint stipulation for the court to approve dismissal or a consent order to avoid further litigation.
- Ask the court for a short stay if a sale is scheduled so parties can negotiate in good faith or attend mediation.
- Consider mediation early—judges often encourage settlement and may order mediation.
- Check for co-ownership agreements or recorded restrictions that could limit a buyout or transfer.
- Plan for liens, unpaid taxes, and mortgage payoffs — the net distribution matters more than gross price.
- Keep communications professional and document all offers and responses.