Understanding Your Options When Co-Owners Disagree on a Buyout Price
Disclaimer: This information is for educational purposes and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Detailed Answer
When two or more people co-own real estate in Louisiana and cannot agree on a buyout price, state law offers several remedies. These include negotiation, appraisal, court-ordered partition, or sale. Below is an overview of each option under
1. Negotiated Buyout with Appraisal
Co-owners can hire an independent appraiser to value the property. Each owner then uses the appraised value as the starting point for negotiations. This approach often costs less and resolves disputes faster than litigation.
2. Mediation or Alternative Dispute Resolution (ADR)
Mediation involves a neutral third party who helps co-owners reach an agreement on price or terms. ADR methods can be faster, more private, and less expensive than going to court.
3. Court-Ordered Judicial Partition
If negotiations and ADR fail, any co-owner may file a petition for partition in Louisiana district court. Under La. Civ. Code Art. 773 (https://legis.la.gov/Legis/Law.aspx?d=102928), the court can:
- Divide the property physically, if feasible, allocating parcels of equal value to each owner.
- Order a public sale (partition by licitation) when physical division would be impractical or inequitable.
In a sale, proceeds split according to each owner’s percentage interest. The court also considers liens and taxes before distributing net proceeds.
4. Unequal Contributions and Reimbursement
Louisiana law recognizes that co-owners may have contributed unequally to the property’s acquisition, improvement, or maintenance. Under La. Civ. Code Art. 680 (https://legis.la.gov/Legis/Law.aspx?d=102935), contributors can seek reimbursement when the property is partitioned or sold.
5. Consent Decrees and Buy-Sell Agreements
Before conflicts arise, co-owners can draft a buy-sell agreement setting how price disputes will be resolved—such as through a shotgun clause or agreeing to binding arbitration.
Key Louisiana Statutes
- La. Civ. Code Art. 668 (https://legis.la.gov/Legis/Law.aspx?d=102915) – Definition and rules of co-ownership
- La. Civ. Code Art. 773 (https://legis.la.gov/Legis/Law.aspx?d=102928) – Judicial partition procedures
- La. Civ. Code Art. 680 (https://legis.la.gov/Legis/Law.aspx?d=102935) – Reimbursement for unequal contributions
Helpful Hints
- Obtain an independent appraisal before negotiations begin.
- Try mediation to save time and legal fees.
- Understand your percentage interest in the property title.
- Keep detailed records of any payments for maintenance or improvements.
- Consider a written agreement spelling out buyout rules in advance.