FAQ: How can a co-owner obtain monetary compensation instead of receiving physical property?

Short answer: In Tennessee a co-owner who wants money instead of a share of the physical property can either negotiate a voluntary buyout with the other co-owner(s) or ask a court to order a partition by sale. If the co-owners cannot agree, a partition action in chancery or circuit court can force a sale of the property and distribute the net sale proceeds according to each owner’s legal share.

Detailed answer — how it works under Tennessee law

This section explains the two main paths a co-owner can take, the practical steps involved, and what to expect in court if the matter proceeds to litigation. This is a general explanation and not legal advice.

1. Voluntary buyout (preferred when possible)

Most co-ownership disputes resolve by agreement. One co-owner who wants cash can offer to purchase the other owner’s interest. Typical steps:

Order a professional appraisal to establish fair market value.
Determine each owner’s ownership share (look at deeds and title documents).
Account for mortgages, liens, property taxes, and costs of sale. The buyout price normally reflects the net equity attributable to the seller’s percentage share.
Draft a buy-sell agreement and arrange closing and payment. Use an attorney or a closing agent to transfer the deed and record documents.

Advantages: faster, less expensive, confidential, and you control timing and price. Consider using mediation to bridge valuation gaps.

2. Court-ordered partition by sale (when co-owners cannot agree)

If negotiations fail, a co-owner may file a partition action in Tennessee chancery or circuit court. The plaintiff asks the court to divide the property or to sell it and distribute the proceeds.

Key points about partition in Tennessee:

Type of relief. Courts generally prefer a partition in kind (physically dividing property) when it is practical. If physical division cannot fairly or conveniently be made, the court orders a partition by sale and divides the net proceeds among the owners according to their shares.
Practicality. Real estate that cannot be split easily (a single-family house on one lot) will usually result in a court-ordered sale.
Costs and liens. The court pays liens, mortgage balances, taxes, and sale costs from the sale proceeds before dividing the remainder among the co-owners.
Equitable adjustments. The court can credit or debit owners for improvements, waste, repairs, or wrongful occupation (rents and profits) so each receives their fair proportion of net value.
Appointment of sale agent. The court may appoint a commissioner, master, or referee to sell the property, often at public auction, unless the parties agree to a private sale.

Because partition is a judicial remedy, expect court filing fees, service costs, appraisal and advertising fees, and attorney fees. The timeline can take months or longer depending on case complexity and local court schedules.

What documents and evidence help your case?

Deeds and chain of title showing each owner’s percentage interest.
Mortgage statements, lien records, and tax records.
Appraisal(s) showing fair market value.
Records of improvements, repairs, and expenses paid by each co-owner.
Evidence of occupancy, rental agreements, and receipts for rents/expenses if claiming rents and profits.

Hypothetical example

Two siblings own a house as tenants in common (50% each). One sibling wants cash. They cannot agree on price. The sibling files a partition action in chancery court asking for sale. The court orders a sale because the house cannot be fairly divided. After sale the mortgage balance and sale costs are paid, and the remaining proceeds split 50/50. If one sibling had paid for major improvements, the court might adjust the split to credit that sibling before dividing the remainder.

Where to find Tennessee law and rules

Tennessee statutes and court rules govern partition actions and civil procedure. For Tennessee statutes and searchable code pages see the Tennessee General Assembly website (search results for “partition”): https://www.capitol.tn.gov/search/results.html?query=partition.

For court rules and procedure, see the Tennessee Administrative Office of the Courts: https://www.tncourts.gov/rules.

Helpful Hints

Get a professional appraisal before making or accepting a buyout offer.
Have an attorney review any buy-sell agreement or partition complaint to protect your interests.
Check title and lien searches early—mortgages and liens reduce net proceeds.
Consider mediation or a settlement conference before litigation. Courts often encourage and sometimes require mediation.
Document improvements and out-of-pocket expenses. Courts can adjust distributions to reflect payments or deductions for waste or enhancements.
Understand tax consequences: selling your interest may trigger capital gains tax. Consult a tax advisor.
Remember timing and cost: litigation is often slow and expensive. Voluntary resolution usually saves time and money.

Disclaimer: This article explains general Tennessee law and common practice. It is educational only and not legal advice. For advice about your specific situation, consult a licensed Tennessee attorney.