Disclaimer: This article provides general information under Michigan law. It does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When heirs inherit real estate in Michigan without specifying shares, they typically hold the property as tenants in common. Each co-owner owns an undivided interest in the whole property. Here’s what co-owners can expect:
1. Right to Possession
Every co-owner has the right to possess and use the entire property, regardless of their ownership percentage. If one heir lives on the property, they do so lawfully. They generally do not owe rent to non-residing co-owners unless there’s an agreement or a court finds an ouster.
2. Partition Action
If co-owners disagree—one wants to occupy, another wants to sell—the non-occupying heir can file a partition action in Michigan Circuit Court. Under Michigan law, the court may order:
- Partition in Kind: Physical division of the land if feasible.
- Partition by Sale: Court-ordered sale of the entire property and division of proceeds.
This process is governed by the Michigan Code of Civil Procedure. See MCL 600.3201 for partition methods and court authority: MCL 600.3201.
3. Distribution of Proceeds and Expenses
After sale, the court distributes net proceeds according to ownership interests. The occupying heir may receive credits for:
- Property taxes, insurance, and mortgage payments they paid on behalf of all co-owners.
- Reasonable improvements or necessary repairs.
These credits reduce the occupying heir’s share of sale proceeds, ensuring fairness among co-owners.
4. Alternative Solutions
Before court action, co-owners can:
- Negotiate a Buyout: One heir buys out the other at fair market value.
- Mediation: A neutral mediator helps reach an agreement on possession, sale timing, or compensation.
- Formal Agreements: Draft written agreements detailing occupancy terms, rent, and cost-sharing.
Helpful Hints
- Get a professional appraisal to determine fair market value before any buyout or sale.
- Keep records of all payments you make for taxes, utilities, and repairs.
- Consider mediation early to avoid costly court fees and delays.
- Discuss and document any occupancy agreements in writing to prevent misunderstandings.
- Consult a real estate attorney to understand how partition law applies to your circumstances.