Detailed Answer
When co-owners cannot agree on a buyout price, Washington law provides multiple paths to resolve the dispute without prolonged conflict.
1. Negotiation and Alternative Dispute Resolution
Co-owners often start with informal talks, mediation, or arbitration. A neutral mediator can guide parties to a compromise. An arbitrator can issue a binding price decision after reviewing market data.
- Use a neutral real estate appraiser to establish market value.
- Agree on a binding arbitration clause in your co-ownership agreement.
- Leverage mediation services offered by local bar associations.
2. Agreed Buy-Sell Agreement
A pre-existing buy-sell agreement can set a clear valuation formula (e.g., fixed price, appraisal-based, or formula tied to earnings). This reduces uncertainty if disagreements arise.
3. Court-Ordered Partition Action
If negotiations fail, either co-owner can file a partition action under RCW 7.52.010 et seq. RCW 7.52.010 allows a court to:
- Order partition in kind, physically dividing the property if practicable.
- Order partition by sale, selling the property and dividing proceeds.
The court may appoint commissioners to appraise fair market value. See RCW 7.52.020.
4. Court-Supervised Sale and Distribution
When partition in kind is not feasible, the court will sell the property. Notice and auction procedures must comply with RCW 7.52.200. Proceeds divide according to ownership interests.
5. Court-Ordered Buyout
After appraisal, a court may allow one co-owner to purchase the other’s share at the appraised value, avoiding sale to third parties.
Disclaimer
This article is for educational purposes and does not constitute legal advice. Consult a licensed attorney in Washington to discuss your specific situation.
Helpful Hints
- Draft a buy-sell agreement when forming co-ownership.
- Obtain a neutral appraisal early to set realistic expectations.
- Weigh the costs and time of partition actions before filing.
- Consider mediation to preserve relationships and control outcomes.
- Understand tax and liability implications of sale or buyout.
- Consult an attorney to navigate court procedures and statutes.