Detailed Answer
When two or more individuals hold real property together—either as tenants in common or joint tenants—they may face a disagreement over one owner buying out the others. If negotiation fails, Nevada law provides several solutions, including alternative dispute resolution and court-ordered partition or sale.
1. Review Any Existing Agreements
First, examine any written agreements (e.g., operating agreements, partnership agreements, buy-sell clauses) that set out a valuation method or dispute resolution process. These contracts often require appraisal, mediation, or arbitration before court involvement.
2. Mediation
Under Nevada’s Uniform Arbitration Act, parties may agree to mediate their dispute. Mediation offers a neutral third party to facilitate negotiation and can save time and expense. See NRS 38.290 on voluntary mediation: NRS 38.290.
3. Arbitration
If co-owners have an arbitration clause, they can submit valuation disputes to an arbitrator. Arbitration is binding and often faster than court litigation. See NRS 38.225 on arbitration agreements: NRS 38.225.
4. Court-Ordered Partition
If ADR fails or no agreement exists, any co-owner may file a partition action in the district court under NRS 40.010: NRS 40.010. The court will determine whether to:
- Partition in kind (physically divide the property among owners).
- Appoint a partition commissioner to oversee division.
- Order a sale when physical division would be impractical or inequitable (NRS 40.050).
If the court orders a sale, it will direct the county sheriff or partition commissioner to advertise and sell the property, then distribute proceeds according to each owner’s interest (see NRS 40.150).
5. Buyout Orders
Instead of sale, the court can set a fair market value and require one owner to buy out the others at that price. If an owner cannot or chooses not to pay, the sale proceeds will satisfy the buyout obligation.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Helpful Hints
- Keep written records of contributions, improvements, and agreements.
- Attempt mediation early; it’s often faster and less costly than litigation.
- Review any operating or partnership agreements for valuation formulas or ADR clauses.
- Understand that courts prefer partition in kind when feasible but will order sale if necessary.
- Hire a real estate appraiser to document fair market value before filing suit.