Detailed Answer — How a co-owner obtains money rather than the physical property

When two or more people own real property together in South Carolina, a co-owner who does not want the physical property has several paths to receive money instead of a piece of the property. The main options are: negotiation and buyout, mediation, voluntary written partition agreement, or a court-ordered partition (often by sale). The court process is the measure of last resort when the co-owners cannot reach agreement.

1. Try a negotiated buyout first (fastest and cheapest)

The easiest route is for the co-owner who wants the property (the staying owner) to buy out the leaving co-owner’s share. Steps:

• Get a current market appraisal or broker price opinion to establish fair value.
• Subtract outstanding liens and mortgages allocated to each owner.
• Agree on the leaving owner’s percentage share and compute that owner’s monetary share of equity.
• Use a written buyout agreement and record any deed or lien releases after payment.

A written settlement avoids court fees, delays, and the risk of a forced sale at an unfavorable time.

2. Mediation or alternative dispute resolution

If parties disagree on price or division, mediation can produce a buyout structure (lump sum or installment payments) acceptable to both. Mediators can also propose valuation methods and payment schedules.

3. Voluntary partition by agreement

Co-owners can enter a written partition agreement that either divides the property in kind (physically) or orders a private sale and divides proceeds. This agreement can include buyout formulas, credits for improvements, and allocation of closing costs.

4. Court-ordered partition (when co-owners cannot agree)

If co-owners cannot reach agreement, a co-owner may file a partition action in civil court. Courts have two standard remedies:

• Partition in kind: the court divides the land physically among owners if feasible.
• Partition by sale: the court orders the property sold and the net proceeds divided among owners according to their ownership shares.

Courts generally prefer partition in kind when it is practicable and fair. But where physical division is impracticable or would unduly reduce value, the court will order a sale and distribution of proceeds.

Under South Carolina law, partition actions and the court’s authority to order sale or division are governed by the state’s civil statutes and rules for real property remedies. For statutory language and procedural rules see the South Carolina Code of Laws (Title 15, partition actions) and the state court rules for civil procedure: https://www.scstatehouse.gov/code.php

5. What to expect in a partition-by-sale proceeding

Key practical points:

• The property is typically appraised or ordered sold at auction or private sale under court supervision.
• Sale proceeds first pay mortgages, liens, taxes, and court-approved costs (attorney fees and sale expenses as allowed). Remaining proceeds divide among owners per their ownership interests.
• If one co-owner claims a buyout, the court may allow that co-owner to purchase the other’s share by paying the court-determined fair share.

6. Valuation, credits, and offsets

The leaving co-owner’s monetary share normally equals the co-owner’s percentage interest in the property’s net equity. Courts and parties will consider:

• Appraised market value (current fair market value).
• Outstanding mortgages, liens, and taxes to be paid from proceeds.
• Improvements or waste: a co-owner who paid for major improvements may receive credit; a co-owner who caused waste may be charged.
• Contributions toward maintenance, insurance, or mortgage payments — courts sometimes adjust shares to be equitable.

7. Practical timeline and costs

Negotiated buyouts: days to months; low cost (appraisal, title work, closing fees).

Mediation: weeks to months; mediator fees and possibly attorney time.

Partition litigation: several months to over a year; court costs, filing fees, appraisals, advertising, and attorney fees can reduce net proceeds.

8. Tax and financial consequences

Receiving cash instead of property can have immediate tax consequences. Capital gains, basis adjustments, and the timing of sale matter. Consult a tax advisor to estimate tax liability before agreeing to a buyout or a sale.

9. Practical example (hypothetical)

Two co-owners own a house worth $300,000 with a $60,000 mortgage. Each owns 50%. Net equity = $240,000; each owner’s share = $120,000. If one owner wants cash, the staying owner can pay $120,000 (with appropriate title transfer and mortgage handling). If they litigate and the court orders a sale, costs (sale expenses, attorney fees) might reduce the net proceeds below $240,000, lowering each owner’s cash share.

Helpful Hints

• Get a current independent appraisal early to support negotiation.
• Document each owner’s financial contributions (mortgage payments, improvements, taxes) to claim credits or offsets.
• Consider mediation before filing court papers — it usually saves time and money.
• Check recorded deeds and mortgage documents to confirm ownership percentages and lien priority.
• Understand that filing a partition action can force a sale; the sale process can take months and may reduce net proceeds.
• Ask about splitting closing costs, title fees, and real estate commission if pursuing a negotiated sale.
• Speak with a South Carolina attorney experienced in real property/partition matters to review agreements and court filings.
• Consult a tax professional about capital gains and potential 1031 or other tax considerations if applicable.