Detailed Answer
When two or more people co-own real estate in North Dakota and cannot agree on a buyout price, they have several paths to resolve the dispute. The goal is to divide ownership or proceeds fairly. Typically, you start with informal methods and move to court only if necessary.
1. Out-of-Court Resolutions
- Negotiation: Co-owners can meet, exchange valuations, and propose buyout figures. A neutral third party can facilitate.
- Mediation: A mediator helps parties communicate and craft a buy-sell agreement. Mediation stays private and can cut costs.
- Arbitration: Co-owners agree in advance to accept an arbitrator’s valuation of the property. This process moves faster than litigation but still produces a binding result.
- Appraisal: Hire a certified appraiser. Each party may obtain its own appraisal or agree on a joint appraisal to set fair market value.
2. Court-Ordered Partition Action
If out-of-court options fail, North Dakota law allows a partition action under NDCC §32-18-01. Any co-owner can file suit in district court to force a division or sale of the property.
Under NDCC §32-18-01, the court reviews ownership interests and can:
- Partition in Kind: Physically divide the land. The court awards each owner a portion that matches their share.
- Partition by Sale: Order a public auction or private sale. After paying costs and liens, the court distributes net proceeds among owners by their ownership percentages.
Courts consider practical factors before dividing land. If a physical division reduces value or proves impractical, the court usually orders a sale. Co-owners can request a specific sale method (public auction vs. sealed bids), but the court has final discretion.
Timeline and Costs: A partition suit can take several months. It involves filing fees, service costs, possible appraisal fees, and legal expenses. Weigh these costs against the potential benefits of judicial enforcement.
3. Post-Partition Options
- After a court‐ordered sale, request distributions promptly. The clerk issues checks or wire transfers per the court’s order.
- If one co-owner wishes to remain and others are bought out, negotiate a private buyout using sale proceeds.
- Keep records of all transactions, appraisals, and court orders to avoid future disputes.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Helpful Hints
- Gather at least two independent appraisals to understand market value.
- Include a buy-sell clause in any future co-ownership agreement.
- Document all offers and negotiations in writing.
- Consider mediation early to save time and money.
- Research NDCC §32-18-01 beforehand to know your rights in a partition action.