Buying Out Siblings’ Interests in a Co-Owned Home — Step-by-Step Guide (New York)

Quick answer: To keep the home you co-own with siblings in New York, you typically must (1) confirm how title is held, (2) determine each owner’s share and the property’s value, (3) negotiate a buyout price and payment method, (4) document the transfer (deed and settlement), and (5) record the deed and handle tax and mortgage issues. If negotiations fail, you can ask a court to partition or order a sale under New York’s partition statutes. This article explains those steps in plain language and points you to the statutes and resources you’ll likely need.

Disclaimer

This is educational information, not legal advice. I am not a lawyer. For help applying these steps to your situation, consult a licensed New York attorney.

Detailed answer — step-by-step

1. Confirm how the property is titled

Obtain a copy of the deed from the County Clerk’s office or your closing paperwork. Common forms of co-ownership include tenants in common and joint tenants. Siblings are usually tenants in common (each owns an individual share). The form of title affects how ownership transfers occur but does not prevent a buyout.

2. Get a clear statement of ownership and liens

Run a title search (through a title company or attorney) to confirm who holds title, whether there are mortgages, liens, judgments, or easements, and whether any co-owner has restrictions. If a mortgage exists in the names of multiple owners, paying off or refinancing the mortgage will be part of the buyout process.

3. Determine each owner’s ownership share and the fair market value

If the deed states shares, use those. If silent, siblings usually split ownership equally. Order a professional appraisal or use CMA (comparative market analysis) from a real estate agent to set a fair market value. The buyout amount for each sibling equals that sibling’s ownership percentage times the agreed market value, adjusted for outstanding mortgage or liens on the property.

4. Negotiate payment terms

Options include a lump-sum payment, installment payments secured by a promissory note and mortgage (or deed of trust), or refinancing the existing mortgage so the remaining owner assumes full mortgage responsibility. If you plan to pay over time, put the agreement in writing and consider a security interest in the property to protect the seller-sibling.

5. Put the agreement in writing

Document the buyout with a written agreement that states the parties, the property, the agreed price, payment terms, closing date, allocation of closing costs, and any tax or proration details. Typical documents at closing include the deed (quitclaim or bargain and sale deed), a bill of sale for any personal property, and payoff statements for mortgages.

6. Closing, deed transfer, and recording

At closing, the selling siblings sign a deed transferring their interest to you (commonly a quitclaim or bargain & sale deed). After the deed is notarized, record it in the County Clerk’s office where the property sits. Recording gives public notice of the new ownership.

7. Address mortgages and lender requirements

If the property has a mortgage in the names of multiple owners, lenders typically require payoff or refinance before you can remove co-owners. Speak with the mortgage holder early. If you assume the mortgage without lender consent, the lender may exercise remedies (including demanding immediate payment) under the loan documents.

8. Consider taxes and costs

New York State and some localities impose transfer taxes and recording fees on property transfers. See the New York State Department of Taxation and Finance for guidance on real estate transfer taxes: https://www.tax.ny.gov/pit/transfer/property.htm. Also consider capital gains, gift tax, and estate planning consequences; consult a tax professional.

9. If negotiation fails: partition action

If the siblings will not agree to sell their interests to you, New York law allows co-owners to bring a partition action in court to divide or sell the property. Partition can result in a physical division (rare for single-family homes) or a forced sale with proceeds divided among owners. New York’s partition statutes begin with RPAPL §901 (Partition) and related sections; see New York’s Real Property Actions & Proceedings Law: https://www.nysenate.gov/legislation/laws/RPAPL/901. A partition action can be costly and emotionally difficult; it is generally last resort.

Common transaction documents and who prepares them

• Buyout agreement / settlement statement — often prepared by an attorney or settlement agent.
• Deed (quitclaim or bargain & sale) — prepared by an attorney or title company; must be correctly drafted and notarized.
• Promissory note and mortgage (if seller-financing) — drafted by an attorney to secure payments.
• Payoff statements for existing mortgage(s) — obtained from the lender(s).
• Title insurance policy (recommended) — purchased through a title company to protect against title defects.

Helpful Hints

• Start by getting a current deed and a title report. Knowing exactly who owns what prevents later disputes.
• Get a professional appraisal. A neutral number helps when negotiating with siblings.
• Talk to the mortgage lender early. Refinancing is often the only way to remove co-borrowers from the loan.
• Use clear written agreements. Oral promises are hard to enforce in property matters.
• Consider mediation or a neutral attorney to facilitate sibling negotiations before expensive litigation.
• Factor in transfer taxes and closing costs (search, recording, attorney fees, title insurance).
• If you plan seller-financing, secure the loan with a mortgage or similar lien to protect the sibling-seller.
• Keep an eye on gift-tax issues if you pay substantially less than fair market value; consult a tax professional.
• If you fear a forced sale, consult an attorney immediately — partition actions move through court and have strict procedures under New York law (RPAPL Article 9).

When to hire a New York real estate attorney

Hire an attorney if any of the following apply: disputes among co-owners, existing mortgage complications, liens/judgments on title, complex family or estate issues, or if you need help drafting secured seller-financing documents. An attorney reduces legal risk and helps ensure proper recording and tax compliance.

Key New York statutory reference

New York’s partition statutes (Real Property Actions and Proceedings Law, Article 9) are the primary law governing forced division or sale of co-owned property: https://www.nysenate.gov/legislation/laws/RPAPL/901. For state transfer-tax guidance, see the New York State Department of Taxation and Finance: https://www.tax.ny.gov/pit/transfer/property.htm.

Next practical steps

1. Obtain the deed and a recent title report.
2. Order an appraisal to set a fair market value.
3. Talk to the mortgage lender about options.
4. Negotiate a buyout and put the deal in a written agreement.
5. Close, record the deed, and handle tax filings and insurance updates.

If you want, I can list typical documents to bring to a consultation, suggest questions to ask a New York real estate attorney, or provide a sample checklist for a buyout closing.