Detailed Answer
When co-owners of property cannot agree on a fair buyout price, New Mexico law offers several paths. You can negotiate directly, use alternative dispute resolution, or, as a last resort, ask the court for a partition action under NMSA 1978, Section 42-6-1 et seq. Each option carries benefits and costs. Understanding them helps you pick the best strategy.
1. Negotiation and Buy-Sell Agreements
Start with an open dialogue. Co-owners may hire an independent appraiser to set market value. Once you have an appraisal, draft a buy-sell agreement that specifies the price, payment terms and closing date. A clear agreement can avoid litigation.
2. Mediation and Arbitration
If direct talks stall, consider mediation. A neutral mediator helps you explore compromises. If you prefer a binding decision, try arbitration. Both methods can save time and reduce costs compared to court. See NMSA 1978, § 44-7A-1 et seq. (Alternative Dispute Resolution Act).
3. Court-Ordered Partition
If ADR fails, any co-owner may file a partition action in district court under NMSA 1978, § 42-6-1 (Partition of Property). The court reviews proofs and can:
- Partition in kind: Physically divide the property when feasible.
- Partition by sale: Order a public or private sale if division isn’t practical. A court-appointed commissioner handles the sale, and net proceeds are split according to ownership percentages.
After sale, the court distributes funds to each owner. You still have rights: you can request a hearing on sale terms or challenge the commissioner’s report.
Helpful Hints
- Document all offers and communications in writing.
- Get at least two independent appraisals to ensure fair market value.
- Consider cost vs. benefit: court actions can be time-consuming and expensive.
- Verify each owner’s share of title before dividing proceeds.
- Consult a New Mexico attorney early to understand deadlines and filing requirements.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney in New Mexico to discuss your specific situation.