How to calculate the financial adjustments when one co-owner is buying out the other co-owner?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
How to calculate the financial adjustments when one co-owner is buying out the other co-owner?
Both names are on deed as equal owners of condo bought 15 months ago. We have broken up and all my personal property will be removed by the end of the month (about 3 weeks from now), which is when we verbally agreed my responsibility for bills and fees will end. The other party thinks that all he owes me is what I put in to the purchase price less half the fees and bills from the time of purchase through the end of this month. He has paid all bills less $2800 that I gave him to be applied to bill I think he owes me the market price of the condo as of today, less half of the bills
and fees minus $2800. Also, if he buys me out, how long does he have to pay me? There is no mortgage on the property.
Asked on March 11, 2019 under Real Estate Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
1) What you are entitled to is half the equity (which if there is no mortgage, etc., is half the sale price) less adjustments for who paid more of the property's carrying costs (e.g. the bills); therefore, you, not he are correct. If he is buying you out and you are not selling the home and dividing the proceeds, you would use the fair market value, but you and he will have to agree as to what that is, since there is no single FMV for real estate--it varies with market conditions, with how motivated buyers and sellers are, etc. You can use comps as guidance, but ultimately must mutually agree.
As a half owner, you are entitled to half the profit, not merely the return of you investment. Since he paid more than you, a court (where this to go before a court) would almost certainly credit him for the expenss he paid and you did not, viewing him as having an "equitable" (or fairness-based) right to more of the proceeds for this reason (or possibly finding that there was effectively an agreement between you that in exchange for him paying more, he'd get more). So again, your view of things is legally correct.
2) However, if you and he cannot mutually agree to the division of the money, you will end up in litigation, which takes time and costs money. As a practical matter, to avoid that, you may wish to meet somewhere in the middle with him. It is worth giving up some proceeds to avoid litigation.
3) The law does not specify how long he'd have to pay you; this will be whatever you and he agree to. Whatever time line you come up with, make sure it (and the purchase price!) are in the agreement.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.