Detailed Answer — How a co-owner can get money instead of a share of the property under Michigan law
If two or more people own real property together (for example, as tenants in common or joint tenants), any co-owner who does not want a physical portion of the land or building can seek monetary compensation through either agreement with the other owners or a court-ordered partition by sale. Under Michigan law, courts allow partition actions to divide ownership interests. When dividing the physical property (partition in kind) is impractical or unfair, the court may order the property sold and direct the court clerk or a commissioner to distribute the sale proceeds among the owners.
1. Try a negotiated buyout first
The fastest, cheapest path is an agreement: one or more co-owners buy out the departing owner for an agreed cash amount. Typical steps:
- Obtain a current appraisal or market-comparable sales to set a fair price.
- Account for outstanding mortgages, liens, taxes, and recent contributions (mortgage payments, repairs, improvements) when calculating net value.
- Document the buyout in a signed written agreement and record any deed transfer with the county register of deeds.
2. File a partition action if you cannot agree
If negotiation fails, a co-owner can file a civil lawsuit called a “complaint for partition” in the circuit court where the property is located. The basic litigation path is:
- File a complaint naming all co-owners (and any lienholders whose interests affect distribution).
- Serve the co-owners and allow them to answer; the court may require pleadings and disclosures.
- The court may order appraisal, valuation, and consider whether partition in kind (physically dividing the land) is feasible.
- If division is impractical or would produce unfairness, the court will order the property sold and direct distribution of proceeds.
The Michigan statutes governing partition actions authorize courts to divide property or order a sale when division is impracticable. See Michigan Compiled Laws (partition statutes) for the statutory framework (example resource: Michigan Legislature and the Michigan Courts). For general court procedure and forms, check the Michigan Courts website: https://courts.michigan.gov/.
3. How the court calculates who gets what
When the court orders a sale, it will handle distribution of proceeds in this general order:
- Pay costs of sale and court costs (appraisers, commissioners, advertising, sale expenses).
- Pay mortgage balances and valid liens recorded against the property.
- Distribute the remaining net proceeds among owners according to their ownership shares.
- Adjust distributions for equitable credits or debits: the court can credit an owner for extra contributions (mortgage or tax payments, necessary repairs, improvements) and charge for waste or wrongful occupation. These equitable adjustments affect final cash awards.
4. Practical details and timing
Partition litigation can take months to over a year depending on complexity, number of parties, and whether parties appeal. The court may appoint commissioners to handle valuation and sale. In some cases the court can order a private sale at fair market value instead of a public auction, subject to court approval.
5. Alternatives and special situations
- If the co-owners hold the property as tenants by the entirety (married couples in Michigan), partition rules differ; one spouse generally cannot unilaterally force a partition while the marital legal structure exists.
- If there are minors or incapacitated owners, the court will require additional protections before approving a sale or division.
- Tax consequences: receiving cash from a partition or from sale proceeds can create capital gains tax. Consult a tax advisor before closing.
For a starting reference to Michigan statutes and court procedure, see the Michigan Legislature website and the Michigan Courts site (examples):
https://www.legislature.mi.gov/ and
https://courts.michigan.gov/.
Bottom line: A co-owner who wants money rather than a physical share should first try to negotiate a buyout with an appraisal and a written agreement. If that fails, the co-owner can file a partition action in Michigan circuit court asking the court to order a sale and distribute the net proceeds—giving the co-owner monetary compensation instead of real property.
Disclaimer: This is general information about Michigan law and not legal advice. Consult a licensed Michigan attorney about your specific situation before taking legal action.
Helpful Hints
- Get a professional appraisal early to support any buyout offer or court valuation.
- Collect proof of payments you made (mortgage, taxes, repairs) to request credits in a partition action.
- Check for mortgages and liens before negotiation so you know net value.
- Consider a mediated buyout to save time and legal fees—courts often encourage settlement.
- Record any buyout deed with the county register of deeds to clear title after payment.
- Ask about tax consequences (capital gains, basis adjustments) with an accountant before closing a sale or accepting proceeds.
- If the property is a family home or held in a special form (tenancy by the entirety), get legal advice—different rules may apply.
- Hire an attorney experienced in Michigan real property/partition if parties cannot agree; the attorney can file and manage the court process and help preserve your rights to credits and distributions.