Legal Question in Real Estate Law in Connecticut

Re: Property Co-owners

Hello,

Technically, either party can force a partition sale through the court. This can be a costly and time-consuming issue. Realistically, most people in your situation handle it by having the sibling who wants to keep the property buy out the other sibling's share of the equity.

(I am assuming here that you are the sibling who lives on the property and does not wish to sell.)

You should try to reach agreement with your sibling on the amount of equity he/she has in the property. Equity is the difference between what the property is worth and what is owed to the mortgage lender, if any. For example, if the property is worth $200k, and you owe the bank $100k, you have the remaining $100k in equity; so each sibling would have $50k in equity. Once you agree on a price, if you have the cash on hand, you would simply pay off your sibling and have the sibling sign a quitclaim deed, transfering any interest he/she has in the property to you. You should also have your sibling sign a contract stating that in consideration for the quitclaim deed, you are giving him/her $x amount, and that he/she no longer has any interest in the property and has been paid in full.

If you do not have that cash readily available (and most people don't), you can try to refinance the property and get that amount of cash out to buy out your sibling. Your existing mortgage lender is a good person to start with, in case you have any existing prepayment penalties or such. You can use this money to buy out your sibling; and then follow the steps outlined above.

If you and your sibling cannot agree on a price, you will be forced to fight this out in court. In either case, I strongly advise talking to a real estate attorney about the situation and having the attorney draft all the documents you will need for the transfer. If the documents are drafted incorrectly, you could end up revisiting this issue later, for example when you want to sell, and spending a lot more money to fix it then.

Hope that helps!

Diana