Disclaimer: This is general information only and is not legal advice. I am not a lawyer. For advice about your specific situation, consult a licensed Hawaii attorney.
Detailed answer — How to buy out co-owners’ interests in Hawaii
If you want to keep real property that your father owned and purchase your siblings’ ownership shares instead of selling the property, follow these practical steps. The process and options below reflect how property ownership transfers and disputes commonly work in Hawaii. For statutory text and state resources, see the Hawaii Revised Statutes and the Hawaii Judiciary self-help pages listed at the end.
1) Confirm who actually owns the property
- Obtain a title report or perform a public-record search to learn the current owners and whether the property is held as joint tenants, tenants in common, in a trust, or as part of a probate estate. In Hawaii, deeds and recorded documents are available through the state recording systems (see Bureau of Conveyances link below).
- If your father has died, determine whether the property already passed by a deed, trust, or by probate. If it is in probate, the personal representative handles distributions under Hawaii probate rules.
2) Determine each person’s legal interest and market value
- If owners hold the property as tenants in common (the most common arrangement among siblings), each owner has a divisible share that can be sold or transferred.
- Hire a licensed appraiser to get a current fair market value for the whole property. Calculate each owner’s share (for example, a one-third share of an appraised $600,000 property equals $200,000).
3) Negotiate a buyout agreement
- Approach siblings with a written offer based on the appraisal. Offer terms: cash at closing, seller-financing, instalments, or exchanging consideration (e.g., taking the property subject to mortgage in exchange for cash).
- Consider mediation or a neutral facilitator if emotions complicate the negotiation.
4) Document the transfer and close properly
- Use a written purchase and sale agreement that states price, who pays closing costs, how liens/mortgages are handled, and the closing date. A closing typically includes a deed transferring the seller’s interest to you (quitclaim or warranty deed depending on the situation).
- Record the deed at the state office that handles conveyances so title reflects the new ownership. In Hawaii, most fee simple deeds are recorded with the Bureau of Conveyances (or the Land Court for registered titles).
5) Funding the buyout
- Options include a new mortgage or HELOC in your name, seller financing (you sign a promissory note to the siblings), using cash, or bringing in an outside investor. Lenders will review the property and your credit before approving financing.
6) If siblings refuse to sell — partition actions and alternatives
- If negotiations fail, any co-owner can ask the court to partition the property. In Hawaii courts, a partition action can result in a division of the land (partition in kind) or an order to sell the property and divide proceeds. Court-ordered sales often reduce net value because of costs and delays.
- Because partition actions can be costly and unpredictable, courts and attorneys often encourage settlement or mediation first.
7) Tax and other consequences
- Buying out family members may have income tax and capital gains consequences for the sellers; you should consult a tax professional. Sellers might realize gain based on their tax basis, and the buyer establishes a new basis for future gain or loss calculations.
- Consider how mortgages, liens, homestead claims, or creditor issues affect the transaction.
8) When to involve professionals
- Hire or consult with a Hawaii real estate attorney before signing agreements or recording deeds. Use a title company, escrow agent, or closing attorney to handle closing paperwork, payoffs, and recording.
- Use a licensed appraiser for valuation and a tax advisor for tax effects.
For procedural and statutory guidance, review Hawaii state resources. The Hawaii Revised Statutes and the Hawaii Judiciary self-help pages explain probate, conveyancing, and civil actions (including partition). Recording rules and the appropriate office for recording deeds are managed by the Bureau of Conveyances.
Helpful links:
- Hawaii Revised Statutes (searchable): https://www.capitol.hawaii.gov/hrscurrent/
- Hawaii Judiciary — Probate and self-help information: https://www.courts.state.hi.us/self-help/probate
- Hawaii Judiciary — Civil self-help information (general procedures): https://www.courts.state.hi.us/self-help/civil
- Hawaii Department of Commerce & Consumer Affairs — Bureau of Conveyances: https://cca.hawaii.gov/boc/
Helpful Hints
- Get a title report early so you know all owners, liens, and encumbrances.
- Order a professional appraisal before making an offer — emotional values rarely determine fair purchase price.
- Put every agreement in writing. Oral deals lead to disputes later.
- Consider mediation if relationships are strained. Mediated buyouts cost less than court litigation.
- Have a plan for financing before committing to a buyout—siblings will expect a reliable closing timeline.
- Ask sellers about their tax basis and consult a tax advisor for likely taxes from the sale.
- Consult a Hawaii-licensed attorney to draft or review the purchase agreement and closing documents and to explain specific statutory rules that apply to your situation.