New Jersey: Can multiple heirs keep an inherited house instead of selling it?

Quick disclaimer

This article explains general New Jersey legal concepts and common practical steps. It is educational only and is not legal advice. Consult a licensed New Jersey attorney about your specific situation.

Detailed answer — how co‑owners can keep a house instead of selling it

When a home passes to more than one heir, the heirs become co‑owners of the property. Under New Jersey law co‑ownership can take different forms (for example, joint tenancy with rights of survivorship or tenancy in common). How the property is titled determines the heirs’ rights. If the property is not owned jointly with survivorship, each heir typically owns a share and can insist on division or sale through a legal process called a partition.

That said, heirs who want to keep the house have several common, practical options before any forced sale occurs:

1. Negotiate a buyout among heirs.

   One or more heirs can buy the others’ shares. Typical steps: get an independent appraisal; agree on a buyout price or formula; arrange financing (refinance the mortgage and remove other names if required); and complete a deed transfer. Put the agreement in writing and record any deed change.

2. Enter a written co‑ownership agreement.

   Heirs can sign a formal agreement covering who lives in the home, how expenses (mortgage, taxes, insurance, repairs) are shared, how rent or sale proceeds are divided, and what happens if one heir wants to sell later. A clear agreement reduces disputes and makes keeping the property practicable.

3. Refinance or assume the mortgage.

   If one heir will continue living in the house, that heir can refinance to take the mortgage into their own name or otherwise arrange to pay the mortgage. Lenders look at credit and income. Removing co‑owners from mortgage liability protects them from future default risk.

4. Transfer ownership into a trust or family LLC.

   Placing the home in a revocable trust or an LLC (with clear ownership percentages and rules) can help manage the property and avoid future probate complications. These moves have tax and legal consequences—talk to counsel and a tax advisor.

5. Rent the property and share income.

   If keeping the house as an investment makes sense, heirs can rent it and share income and expenses according to an agreed formula. Ownership shares still remain; document the arrangement carefully.

6. Use mediation or family meetings.

   Mediation or a facilitated family meeting can resolve disagreements without court. Neutral mediators help set a binding or non‑binding agreement that keeps the property in the family.

7. Last resort — partition action (court‑ordered sale or division).

   If heirs cannot agree, any co‑owner may file a partition action in New Jersey Superior Court. Partition usually ends in a sale (with proceeds split by ownership share) because physically dividing a single residential lot is often impractical. Partition statute and procedures are part of New Jersey law; see the New Jersey statutes collection for the relevant chapters: New Jersey statutes. The court can order partition by sale and will divide net proceeds among owners.

Which option fits best depends on factors such as: whether one heir can qualify for refinancing; whether heirs can fund a buyout; whether continuing co‑ownership will cause ongoing disputes; tax and cost implications; and whether any mortgages, liens, or creditors affect the property.

How probate and title affect your choices

Before heirs can act, confirm how the decedent owned the property and whether the property must go through probate. If the property passed directly (for example, to a surviving joint tenant, or via a properly funded trust), probate may not be necessary. If the house is part of the estate, the Surrogate’s Court (probate) process may be involved. For general probate information see the New Jersey Courts self‑help pages: NJ Courts Self‑Help.

Practical risks and costs to keep in mind

• Buyouts need cash or mortgage financing; lenders look at credit and income.
• Refinancing can carry costs (closing costs, appraisal fees).
• Holding the home means paying taxes, insurance, utilities, and repairs; unpaid obligations can create liens or foreclosure risk.
• If disagreements persist, any co‑owner can seek a partition and force a sale; courts rarely force one heir to live with unwilling co‑owners indefinitely.
• Tax consequences can include capital gains upon later sale; consult a tax professional.

When you should talk to an attorney

Seek a New Jersey attorney if you need to:

• Prepare or review buyout or co‑ownership agreements;
• Refinance and remove co‑owners from title or mortgage;
• Handle probate or title problems;
• Respond to—or file—a partition action;
• Resolve disputes that mediation cannot fix.

An attorney can explain rights under New Jersey law, draft enforceable agreements, and represent you in court if necessary.

For statutory background on partition claims and real property remedies, consult the New Jersey statutes: https://www.njleg.state.nj.us/statutes. For probate and surrogate court information, the New Jersey Courts site is a helpful starting point: https://www.njcourts.gov/selfhelp.

Helpful Hints

• Get an official copy of the deed to confirm how title is held.
• Order a professional appraisal so buyout offers are fair.
• Check for mortgages, liens, unpaid taxes, or other encumbrances on the property.
• Put any agreements in writing (buyout, rental splits, expense sharing) and have all heirs sign.
• Consider mediation early—it’s cheaper and faster than litigation.
• If you plan to keep the house, budget for maintenance, insurance, property tax, and emergencies before committing to a buyout.
• Speak with a New Jersey real estate attorney and a tax advisor before refinancing or transferring title.
• Act quickly to protect the property and avoid liens, foreclosure, or decay of value while heirs delay decisions.