Legal Question in Real Estate Law in California
how do we start the buy-out process of a joint-tenant owned townhome?
3 Answers from Attorneys
I am not sure what you mean. Are you buying a townhouse that has a tenant in it? Are there joint owners? How is the process any different then a normal purchase?
Assuming you own a townhome with another person, and you want to buy that person's interest, you need to talk to them and ask them if they would be interested in your proposal. If your co-tenant (the other owner) refuses to discuss the matter, or refuses to sell you their interest, your only other option is to file a partition action in which you ask the court to determine your repective interests, sell the property to a third party, then split the net proceeds of the sale between you and the other owner.
A negotiated deal is much to prefer, and a good starting point would be to obtain a credible current appraisal, or at least a broker's market-value estimate, of the property's current market value. Use someone both parties agree upon.
Short of a negotiated transaction, there are two possibilities. One is to bring a court action for "partition," as described in a previous answer. A lot of times, merely filing and serving a suit asking for partition will cause a reluctant co-owner to bargain in good faith for an out-of-court settlement.
Finally, a kind of halfway step that is very easy is to sever the joint tenancy and turn it into a tenancy in common. This removes the right of survivorship, which is possibly a good idea if the co-owners don't want to, in effect, make the other co-owner their heir. Sometimes this step involves guessing who is more likely to die first. Civil Code section 683.2 discusses how joint tenancies may be severed (and thus turned into tenancies in common).