Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for advice on your specific situation.
Detailed Answer
When co-owners of property in Michigan cannot agree on a fair buyout price, Michigan law offers several routes to resolve the dispute. You can pursue voluntary methods or turn to the courts through a partition action.
1. Voluntary Resolution
- Mediation or negotiation: Hire a neutral mediator or real estate appraiser to set an objective value. This often leads to a buyout without court involvement.
- Appraisal and buyout agreement: Each co-owner obtains an appraisal. Use the average value or a range to negotiate who buys whom out.
2. Partition Action
If voluntary methods fail, any co-owner may file a partition action in Michigan circuit court under MCL 600.3201. The courts offer two main outcomes:
- Partition in kind: The court divides the property physically into distinct portions, giving each co-owner a share. This works when the property can be split without diminishing its value.
- Partition by sale: If a physical division is unfair or impractical, the court orders a public sale of the entire property. After expenses, proceeds go to co-owners in proportion to their interests. See MCL 600.3211 and MCL 600.3212.
3. Court-Ordered Sale Procedures
Once a sale triggers under MCL 600.3211–600.3212, the court supervises notice, bidding, and distribution of sale proceeds. Creditors and liens attach in priority order. The court allocates net proceeds according to each co-owner’s legal share.
Helpful Hints
- Document every communication and appraisal to support negotiations or court filings.
- Consider a neutral real estate appraiser early to avoid costly court fees.
- Review co-ownership agreements—some include mandatory buyout or arbitration clauses.
- Weigh court costs and timelines. Partition actions can take months to resolve.
- Consult a Michigan attorney before filing to understand deadlines, fees, and procedural rules.