Disclaimer: This is educational information only and is not legal advice. For advice about your specific situation under Oregon law, consult a licensed Oregon attorney.
Detailed answer — How a co-owner can receive money instead of a physical share under Oregon law
When two or more people co-own real property (or other tangible property) and one owner prefers cash instead of a physical portion of the property, there are two broad paths: reach a voluntary buyout agreement with the co-owners, or ask a court to resolve the dispute through a partition action that results in a sale and distribution of proceeds. Oregon law governs partition actions in ORS Chapter 105. See the Oregon Revised Statutes on partition actions: ORS Chapter 105.
1) Voluntary resolution — negotiated buyout
- Talk with the co-owners about a buyout: one owner can pay the others a negotiated sum in exchange for their ownership interests. This avoids court costs, delay, and public filings.
- Get an independent appraisal or market analysis to support a fair purchase price. Put the agreement in writing and include payment terms, closing details, and who pays closing costs and taxes.
- Consider using escrow and a closing agent (title company or attorney) to handle deed transfer, payoff of liens, and distribution of proceeds.
2) Court-ordered resolution — partition actions and sale
If co-owners cannot agree, any co-owner may file a civil suit asking the court for partition or sale. Under Oregon law the court can:
- Order a partition in kind (divide the property physically) if it is practical; or
- Order a sale of the property and distribution of the proceeds among the owners if partition in kind is impracticable or inequitable.
In practice, many courts will order a sale where physical division would be impractical (for example, a single-family home divided among multiple owners). If you want money rather than a physical portion, your pleadings and motions should ask the court to order sale and distribution of proceeds rather than partition in kind. See ORS Chapter 105 for statutory authority: ORS 105 — Partition.
What the court considers
- Whether a physical division is feasible without materially harming the property.
- Each owner’s ownership share and any written agreements among owners (deeds, co-ownership agreements, or operating agreements).
- Liens, mortgages, and secured debts that must be paid from sale proceeds.
- Contributions of owners for improvements, taxes, insurance, or mortgage payments — the court may consider equitable adjustments.
- Costs of sale (legal fees, broker commissions, taxes, and other expenses) will typically be deducted before dividing proceeds.
Practical steps and evidence
- File or oppose a partition complaint with clear requests — specify sale and distribution of proceeds if that is the desired outcome.
- Obtain a current appraisal or broker price opinion to establish fair market value. Courts rely on credible valuation evidence when ordering a sale or awarding proceeds.
- Document any payments you made for the property (mortgage, taxes, insurance, repairs) if you will request credit or accounting in the partition proceeding.
- Be prepared for the timeline and costs: partition litigation can take months, and court-ordered sales add extra time to arrange a sale or execute a sheriff’s sale depending on procedures.
3) Alternatives to litigation
- Mediation or neutral valuation can produce a buyout without court. Many counties offer court-connected mediation for property disputes.
- Short-form settlements: one owner signs a promissory note to buy others out over time; secure the note with the property if appropriate.
- Refinance or obtain a home equity loan so one owner can pay co-owners in cash and hold title alone (subject to lender approval).
4) Tax, lien, and practical consequences to consider
- Receiving cash instead of property can have tax consequences (capital gains or basis adjustments). Consult a tax advisor.
- Lenders’ mortgages and other liens normally must be paid or assumed at sale or refinancing; they affect net proceeds.
- Costs and attorney fees in a partition action often come out of proceeds, reducing what co-owners receive.
5) How to prepare before you act
- Gather deeds, mortgage statements, tax bills, receipts for improvements, and any written co-ownership agreements.
- Get a professional appraisal or broker opinion to support fair value.
- Collect bank statements or proof of funds if you propose a buyout and need to show the ability to pay.
- Consider consulting an Oregon attorney early to understand likely outcomes, costs, and best procedural steps.
Helpful hints
- Start by trying to negotiate — voluntary buyouts save time and money.
- Use a neutral appraiser; courts give weight to independent appraisals.
- If you file for partition, expressly request a sale and distribution of proceeds if you want money rather than a physical division.
- Keep clear records of payments and improvements; you may be entitled to credit for contributions that affect distribution.
- Factor in costs (attorney fees, appraisal, broker commission, taxes) when calculating a fair buyout number.
- Be aware of timelines: litigation and court-ordered sales take longer than private settlements.
- Talk to a lawyer before signing any settlement or buyout that affects title.
For the statutory framework governing partition and sale in Oregon, see ORS Chapter 105: https://www.oregonlegislature.gov/bills_laws/ors/ors105.html. If you want help finding a local Oregon attorney who handles partition, property disputes, or buyouts, consider contacting the Oregon State Bar or a local bar referral service.
Remember: this information is educational only and is not a substitute for personalized legal advice tailored to your facts.