Detailed Answer — How a co-owner can get money instead of a physical share under New Mexico law
This answer explains, in plain language, how a co-owner who does not want a physical portion of jointly owned property can obtain monetary compensation (a buyout or sale proceeds) under New Mexico law. This is a general explanation — not legal advice.
Key concepts
- Partition: A legal process that ends co-ownership by either dividing the property (partition in kind) or selling the property and dividing the proceeds (partition by sale).
- Tenancy type matters: How ownership is held (tenancy in common, joint tenancy, community property issues) affects rights and how shares are computed.
- Voluntary buyout: Co-owners can always agree that one will buy the others’ interests for a negotiated price — this avoids court.
How to get monetary compensation — main routes
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Negotiate a voluntary buyout.
Most buyouts start here. Get a current market appraisal, calculate each owner’s percentage interest, and offer a price. Consider credits/credits for mortgage payments, taxes, improvements, or unpaid rents. Put any agreement in writing and record a deed after closing.
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File a partition action in district court.
If negotiations fail, a co-owner may file a complaint asking the court to partition the property. In New Mexico the district court handles partition actions and related accounting and distribution issues. For general information about New Mexico courts and civil processes see the New Mexico Courts site: https://www.nmcourts.gov/. For statutory text and searches use the New Mexico Legislature website: https://www.nmlegis.gov/Legislation/Statutes.
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Ask the court for a sale (partition by sale) rather than division (partition in kind).
Court options: a judge can order the property divided physically if that is practical and fair. If physical division would be impractical, unfair, or would significantly diminish value, the court commonly orders a sale and divides proceeds. A co-owner who wants money can request sale and argue that sale is the fair remedy. The court will consider feasibility of division, loss in value from division, and prejudice to the parties.
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Receive accounting and credits before distribution.
The court (or the parties by agreement) will account for contributions such as mortgage payments, taxes, insurance, repairs, and improvements. That accounting adjusts each owner’s share of the sale proceeds. A co-owner seeking money should gather evidence of payments and improvements.
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Commissioner or sheriff sale and distribution of net proceeds.
When the court orders sale, it may appoint a commissioner to sell the property at public auction or by private sale subject to court approval. After paying liens, sale costs, and any court-ordered credits, the net proceeds are divided according to ownership shares (after accounting adjustments).
Practical steps to pursue compensation
- Confirm ownership type and each owner’s percentage interest (review deed and title).
- Get a professional appraisal to establish fair market value.
- Collect records of payments and improvements (mortgage, taxes, insurance, repairs).
- Try mediation or settlement to buy out co-owners — cheaper and faster than court.
- If litigation is needed, file a partition complaint in the district court where the property sits and ask the court for sale and distribution.
- Be prepared for timelines: courts follow notice and procedural rules; sales take months in many cases.
What the court will consider
- Whether physical division is practical without materially reducing value.
- Relative financial contributions (mortgages, taxes, improvements) and equitable credits.
- Existence of liens, mortgages, or third-party interests that must be paid from proceeds.
- Any agreement among co-owners that affects how division or sale should occur.
Tax and lien issues to watch
Sale proceeds can trigger capital gains tax for selling owners. Outstanding mortgages and liens are typically paid from sale proceeds. Get tax advice before completing a buyout or sale.
Where to find New Mexico law and court resources
- New Mexico Legislature (search statutes, including property/partition rules): https://www.nmlegis.gov/Legislation/Statutes.
- New Mexico Courts (self-help and court process info): https://www.nmcourts.gov/.
Helpful Hints
- Obtain a written appraisal early — it sets a realistic buyout target.
- Document all payments and improvements now — they affect how proceeds are allocated.
- Propose an independent mediator — many partition disputes settle quickly with mediation.
- Consider a phased buyout: owner buys other interests over time with a promissory note secured by the property.
- If you want money rather than property, clearly ask for partition by sale in any court filing or settlement offer.
- Talk to a real estate attorney in New Mexico about drafting agreements and representing you in a partition action; an attorney can explain local practice and likely outcomes.
Disclaimer: This is general information about New Mexico law for educational purposes only and is not legal advice. For advice about your specific situation, consult a licensed New Mexico attorney.