How to Make a Buyout Offer to Co-Owners in an Arizona Partition Case

Quick overview: If you share ownership of real property and one of the owners has filed (or threatens to file) a partition action, you can often avoid a forced public sale by making a formal buyout offer to the other co‑owners. In Arizona, partition actions are governed by the Arizona Revised Statutes and court procedures. This article explains the practical steps to prepare, present, and document a buyout offer so a court can approve it or so the co‑owners can accept it without further litigation.

Disclaimer

This article is educational and not legal advice. For advice about your specific situation, consult a licensed Arizona attorney.

Detailed answer — step‑by‑step guide under Arizona law

1. Understand the basic legal background

Arizona law allows co‑owners to seek partition of real property when they cannot agree on use or disposition. The court will try to divide the property “in kind” if reasonably practicable and will order a sale only if division in kind is impractical or inequitable. For an overview of partition actions in Arizona, see Arizona Revised Statutes (Title 12) and related provisions on civil actions: https://www.azleg.gov/arsDetail/?title=12. The statute framework means courts favor fair, settled resolutions such as buyouts when they are feasible.

2. Get a reliable market value

Before you make an offer, obtain a current, written, licensed-appraiser market valuation of the property. Use a licensed appraiser who will produce a report you can submit to co‑owners and the court if necessary. An appraisal removes ambiguity about value and strengthens any court filing that requests approval of a private buyout.

3. Calculate your buyout price

Decide whether your offer will purchase the other owners’ entire interest or a specific share. Typical calculations:

Start with the appraised fair market value.
Subtract outstanding liens, mortgages, unpaid taxes, and ordinary selling costs (if the sale were to occur).
Divide the net equity by ownership shares (or as ownership documents specify).
Consider offering a premium (e.g., a percentage above your co‑owners’ pro rata share) to encourage acceptance.

4. Collect supporting documents

Prepare a packet to support your offer. Include:

Certified appraisal.
Preliminary title report or title commitment showing liens and recorded interests.
Proof of funds or a current mortgage preapproval letter showing you can close.
A draft purchase agreement or buy‑out agreement describing price, closing date, escrow instructions, and who pays what costs.
Draft of the proposed deed or conveyance and any releases/cooperation language.

5. Make a clear written offer to the co‑owners

Deliver a written offer that includes:

Buyout price and how you computed it (attach appraisal and title info).
Deadline for acceptance.
Terms and contingencies (financing contingency, inspection, payoff of liens, closing date, allocation of closing costs and realty transfer taxes).
Proposed escrow instructions and suggested escrow holder or title company.
A request that the seller sign a form release of claims (so co‑owners cannot reopen the partition later over matters covered by the release).

6. File a notice or motion in the partition case if litigation already exists

If a partition lawsuit is pending, file a short notice and a proposed order with the court stating that you have made a formal buyout offer and requesting:

That the court accept the buyout as an alternative to sale (if the co‑owners accept and the court finds it fair).
That the court continue or stay sale proceedings while the offer is pending, if appropriate.
That the court appoint a hearing or set deadlines for objection and approval if the parties ask for judicial approval of the buyout.

Attach your offer packet (appraisal, proof of funds, proposed purchase agreement) to the filing. Serve all parties with the filing in accordance with Arizona Rules of Civil Procedure.

7. If parties resist, move for court approval of a negotiated buyout

If co‑owners dispute fairness, you can ask the court to review the appraisal and the proposed deal. The court will look for good faith, fair price, and clear title transfer. Be prepared to show:

The appraisal and market analysis.
Evidence of funds and ability to close.
A proposed distribution of proceeds (who gets what after liens and costs).

8. Address liens, mortgages, and third‑party interests

You cannot obtain marketable title without resolving recorded liens or mortgage payoffs. If lenders have a lien, the buyer must either assume the mortgage (with lender approval) or pay it off at closing. Include cooperation language in the offer so co‑owners agree to sign payoff documentation and releases.

9. Use escrow, title insurance, and releases

Close through a neutral escrow or title company. Require a title insurance policy in the buyer’s name and obtain signed releases from selling co‑owners. If the court grants approval, submit the court order to escrow so the deed will be recorded clear of partition claims.

10. Consider mediation or settlement conferences

Courts encourage settlement. If co‑owners hesitate, propose mediation or a settlement conference. Arizona courts and many local jurisdictions provide settlement resources for civil cases; use them to avoid uncertain public sales.

Practical templates and sample language

Below is a short, plain sample of items to include in the written offer. Adapt with attorney help before sending.

Offer to Purchase (sample items):
- Buyer: [Your name]
- Sellers: [Co-owner names]
- Property: [Legal description / address]
- Offer price: $[amount] (computed as $[appraised FMV] less payoffs of $[amount] divided by shares)
- Proof of funds: attached bank statement / loan preapproval
- Closing: within [30] days of acceptance
- Conditions: Seller(s) must sign deed, cooperate with lien payoffs, and provide releases; buyout approved by the court if case pending
- Expiration: Offer expires at [time/date]
- Escrow: [Title/Escrow company]

When the court will prefer a sale

If division in kind is the only fair solution (for example, physically divisible property where splitting makes sense), the court may prefer division. But if a buyout produces a fair price and a clean title transfer, courts often accept it as an equitable alternative. You can cite the partition statutes to your motion and attach the appraisal showing reasonableness; see Arizona Revised Statutes Title 12 for the statutory framework: https://www.azleg.gov/arsDetail/?title=12.

Helpful hints

Get a licensed appraisal early — courts respect objective valuations.
Collect a recent preliminary title report to identify liens or easements.
Show proof of funds or mortgage preapproval before the seller accepts.
Offer a reasonable premium if you want a quick acceptance.
Include a deadline for acceptance and state how you’ll treat unpaid taxes and liens.
Use neutral escrow and insist on title insurance for the buyer.
If the partition case is pending, file a short notice or motion so the judge knows a settlement is in progress and can pause sale steps.
If the co‑owners refuse a fair deal, be ready to litigate; judges will compare the offer to the appraisal and may favor a sale only if the buyout is inadequate.
Consider hiring an attorney experienced in Arizona real property and partition law to prepare filings and negotiate effectively.
Check tax consequences — buyouts can have capital gains or gift tax implications; consult a tax professional.

Resources

Arizona Revised Statutes (Title 12 — Courts and Civil Procedure): https://www.azleg.gov/arsDetail/?title=12
Arizona Judicial Branch — self‑service and court resources: https://www.azcourts.gov/selfservice
Arizona Department of Revenue (for tax questions): https://azdor.gov/

Final note: A carefully documented buyout offer improves the chance the co‑owners will accept and the court will approve the transfer. If you are in a pending partition action, act quickly to preserve options and to ask the court to stay any sale while you negotiate. For personalized advice and to draft the court filings and purchase agreement properly, consult a licensed Arizona attorney.