Legal Question in Real Estate Law in Maryland
I own a house with a friend and he wants to sell it. I'd rather wait for the market to turn before we sell. So, I don't want to sell now, but it sounds like he's in a bad financial situation and wants out ASAP (fyi - I still live in the house, he does not). Will he have to file an Action for Partition if I refuse to sell now? What are the costs on both ends if this happens and isn't this a lengthy process?
He would also be happy for me to buy him out - since he's strapped for cash and I assume filing the Partition Action isn't cheap, would it be better for him to give me a lower offer just to settle the issue? My point is I'm happy with the current situation and I don't want to lose anything from his wanting to sell - I'd like to gain if possible. Also, if I think he wants too much for his share and we cannot reach an agreement, what must he/I do then? Thanks
1 Answer from Attorneys
Hello. I am a Maryland barred attorney and practice in this area.
Yes, the co-owner can file a suit for partition (actually a suit for sale in lieu of partition) to force a sale. The length of time varies county to county. Generally, a lawsuit will increase the costs for both of you. The filing party will need to pay a modest filing fee besides any attorney fees. However, both parties will bear responsibility for other costs of sale. Even if you do represent yourself to eliminate attorney fees, there will be trustee fees (the trustee takes charge of selling the property) in addition to real estate broker and/or auction commissions and any applicable transfer / recordation taxes.
Buying out the other owners share may make sense and often costs less though one cannot precisely determine the cost savings without knowing more details. It may be helpful to get attorney insight at this stage and even run the figures for a few possible scenarios. If you do reach agreement, an attorney can help draw up a buy/sell agreement and assist with any deed preparation. If there is a mortgage on the property, you will usually need to involve your lender.
Note that you will need to ensure that liens are resolved and want to make sure the deed is properly prepared. If you cannot reach agreement, this will most likely wind up in litigation. While the above is not legal advice, I do hope it helps give you a general idea of what to expect.