Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When co-owners of property in Hawaii cannot agree on sale logistics or how to share costs, they have several legal pathways under state law.
1. Negotiation and Mediation
First, co-owners should attempt a good-faith negotiation. They can define a timeline, set a minimum sale price, agree on marketing agents and outline which expenses each party will cover. If direct talks stall, parties can engage a neutral mediator. Mediation can resolve disputes over listing fees, commissions, taxes, insurance and maintenance costs without going to court.
2. Written Co-Ownership Agreement
If co-owners anticipate future disagreements, they can draft a written agreement. This document should cover:
- Decision-making rules (e.g., unanimous vs. majority vote)
- Expense allocation for property upkeep
- Sale procedures (e.g., right of first refusal, buy-out formulas)
A clear co-ownership agreement reduces uncertainty and lowers the risk of litigation.
3. Judicial Partition Action
If amicable solutions fail, Hawaii law permits any co-owner to file a partition action in circuit court under Hawaii Revised Statutes §667-21 and §667-22. The court can order:
- Partition in Kind: Physical division of the property if practicable.
- Partition by Sale: Court-supervised sale of the entire property and distribution of net proceeds among owners.
During a partition sale, the court may appoint a commissioner or receiver to manage sale logistics. Parties who advance necessary costs (e.g., taxes, insurance, repairs) can request repayment from the sale proceeds. The court will determine equitable contributions.
4. Contribution Claims
Separate from partition, co-owners may bring an equitable contribution action for necessary or beneficial expenses paid on behalf of the property. For example, if one owner pays urgent repairs or property taxes, they can seek reimbursement from the other owners through a lawsuit asserting unjust enrichment or equitable lien principles.
Helpful Hints
- Review any existing co-ownership or operating agreement before taking action.
- Document all communications, expense payments and receipts.
- Consider mediation to save time and legal fees.
- Understand that a court-ordered sale may take several months and incur commissioner fees.
- Consult a real estate attorney to explore buyout formulas or cross-purchase agreements.