Detailed Answer
Disclaimer: This article is for educational purposes only and does not constitute legal advice. If you face a dispute over a co-owner buyout price, consult a qualified attorney in Texas.
1. Voluntary Agreement
Co-owners often start by negotiating a buyout price. You can:
- Hire a certified appraiser to value the property.
- Split the cost of an appraisal and agree to accept its fair market value.
- Use mediation or collaborative negotiation to bridge valuation gaps.
2. Partition Suit in Texas
If voluntary talks fail, any co-owner can file a partition suit under Texas Property Code Chapter 23 (Section 23.002). The court evaluates whether to:
- Partition in Kind: Physically divide the property among owners when practical.
- Partition by Sale: Order a public or private sale and divide the proceeds.
3. Court-Ordered Partition Process
Once you file, the court will:
- Appoint three commissioners to survey and divide or value the asset (Section 23.011).
- Hold hearings if any party objects to the commissioners’ report.
- Issue a judgment for partition in kind or a sale order (Section 23.021).
- Approve sale terms, oversee marketing and bidder qualifications, and confirm sale results.
4. Sale Proceeds and Equalization
After a partition sale, the court applies the net proceeds to liens and expenses, then distributes the balance according to each co-owner’s ownership share. If one owner paid more for improvements or taxes, they may seek an offset under Section 23.002.
Helpful Hints
- Document every negotiation and appraisal to show good-faith efforts.
- Consider mediation before filing suit; courts often encourage alternative dispute resolution.
- Review your deed or operating agreement for buyout provisions or valuation formulas.
- Keep clear records of expenses (taxes, insurance, improvements) to claim proper credit in court.
- Be aware that court costs and attorney fees may reduce your net proceeds.