Can heirs keep an inherited house instead of selling it? Practical options under Tennessee law

Quick answer: Yes — heirs often can keep an inherited home, but doing so requires agreement among the co‑owners or legal steps to resolve disputes. If co‑owners cannot agree, Tennessee law allows a court to order a partition (division) of the property or a sale. This article explains the common paths, the court process you may face, and practical steps to keep the home.

Detailed answer — how this works in Tennessee

1. Understand how you own the house

When a homeowner dies, title can pass to heirs by the terms of a will or by Tennessee’s intestacy rules. Multiple heirs commonly hold title as co‑owners — usually as tenants in common. Each co‑owner holds a separate share that can be sold or inherited. Before taking action, confirm how title exists by obtaining a copy of the recorded deed and the will or the probate court’s order distributing the estate.

2. Voluntary paths to keep the house

Co‑owners have several private options to keep the property within the family without involving court:

Buyout. One or more heirs buy the other heirs’ shares for fair market value. The buyer can pay cash or finance the buyout by refinancing the mortgage in their name.
Agreement to co‑own under new terms. Heirs can sign a written agreement covering occupancy, expenses, sale conditions, and how any future proceeds divide.
Life estate or occupancy agreement. Heirs can transfer a life estate or execute a license for one person to live in the house in exchange for payments to other heirs.
Family settlement agreement. Heirs can resolve disputes and redistribute assets from the estate so one person keeps the house while others receive other property or money.

3. If heirs can’t agree: partition actions under Tennessee law

If co‑owners cannot reach an agreement, any co‑owner may file a partition action in Tennessee court asking the court to divide or sell the property. Tennessee’s partition statutes govern this process. The court generally prefers a physical division (partition in kind) when it is practical, but if the land or structure cannot be fairly divided, the court can order a sale and split the proceeds among the owners.

See Tennessee’s partition statutes: Tenn. Code Ann. Title 29, Chapter 27.

How a partition action typically proceeds

A co‑owner files suit asking for partition.
The court evaluates whether a partition in kind is practical. If yes, it divides the property among owners. If not, it orders a sale and divides net proceeds by ownership shares.
The court may account for liens, mortgages, payment of taxes, and credits for improvements or contributions by any co‑owner.

Court‑ordered sale can be costly and time consuming. Judges have discretion about adjustments for improvements, payments for mortgages, and costs. That discretion makes negotiated solutions preferable where possible.

4. Practical issues to address when keeping the house

Mortgage and liens. If the house has a mortgage, the lender may require the person who keeps the house to refinance or assume the loan. Unpaid liens must be resolved before clear title passes.
Valuation. Use a professional appraisal to set fair market value for buyouts or settlement calculations.
Taxes. Consider potential capital gains tax consequences when the property later sells, and property tax reassessment mechanics.
Insurance and maintenance. Decide who will pay insurance, taxes, utilities, and repairs while co‑ownership continues.
Documentation. Put any buyout, occupancy agreement, or co‑owner agreement in writing and record deeds when ownership changes.

5. Example (hypothetical)

Three siblings inherit a house as equal tenants in common. One sibling wants to live in and keep the house. Practical steps they could take:

Obtain an appraisal and a title search.
The sibling who wants the house offers to buy each sibling’s one‑third share at the appraised fair market value.
They sign a written buyout agreement. The buyer refinances the mortgage into their name and pays the siblings their shares. The siblings sign deeds transferring their shares to the buyer, and the deeds are recorded.
If they cannot agree, any sibling could file a partition action, and the court might order sale of the house and division of proceeds.

When you should consider filing a partition action

File a partition action only if negotiation, buyout, or mediation fails. Courts resolve disputes when co‑owners cannot reasonably divide or operate the property together. Keep in mind that partition litigation can take months, generate legal costs, and often ends in sale rather than preserving the home for one family member.

Helpful Hints

Get a current, written appraisal to set a fair price before any buyout offer.
Order a title search to learn about mortgages, liens, or restrictions.
Discuss refinancing options early if someone will assume the mortgage.
Put agreements in writing and record deeds promptly after any transfer.
Use mediation or a neutral facilitator to resolve family disagreements and avoid costly court fights.
Keep clear records of payments for taxes, repairs, and improvements; courts can credit or charge co‑owners accordingly.
Consult a Tennessee probate or real property attorney before signing documents or filing petitions. An attorney can help draft buyout terms, calculate credits, and explain court risks.

Disclaimer: This article explains general Tennessee law and common practices; it is educational only and not legal advice. Laws change and facts matter. For advice about a specific situation, contact a licensed Tennessee attorney.