Jointly owned property, whether residential or commercial, can lead to disputes when it is time to sell. These disputes can arise from various factors, particularly among business partners and family members with different priorities, financial situations, and emotional attachments to the property.
Disputes owners commonly face
Partnerships can face challenges whether the dispute is business, personal or a blend of both. Each situation is unique, but we often help clients with variations on any or several of the following issues:
- Differing financial goals and needs: The owners may have different financial goals and needs. For instance, one partner might urgently need liquidity and push for a quick sale, while another might prefer to wait for a better market condition to maximize profit.
- Emotional attachments: In the case of family-owned properties, emotional attachments can complicate the decision-making process. A family member might have sentimental value attached to a property, making them reluctant to sell, while others might view the property as an asset to liquidate.
- Unequal contributions and perceived fairness: Disputes can also arise from perceptions of unequal contributions. One partner or family member might feel they have invested more time, effort or money into the property and therefore deserve a larger share of the proceeds.
- Legal and tax implications: The sale of jointly owned property can have complex legal and tax implications. Disagreements can arise over handling these issues, especially if there is a lack of clear communication or understanding of the legalities involved. For example, disputes might occur over who is responsible for paying capital gains tax or how to handle any outstanding debts associated with the property.
- Decision-making authority: Joint ownership often requires unanimous consent for significant decisions, including property sales. If one party is uncooperative or has differing opinions, it can stall the sale process.
- Market conditions: Disagreements can also stem from differing opinions on current and future market conditions.
- Communication breakdown: Effective communication is critical to resolving disputes, but things can break down due to misunderstandings, lack of transparency and poor communication.
Guidance for avoiding or resolving these issues
Clear communication, binding legal agreements, defined exit strategies, and understanding each party’s needs and expectations can help mitigate these issues. An experienced real estate law attorney can be a significant asset when ownership groups contemplate a real estate sale.
Along with drafting comprehensive ownership agreements and negotiating a sale, they can help mediate or facilitate communication among owners. Those with concerns about ownership disputes can call 610-936-6612 to schedule an appointment with the experienced real estate team at Max L. Lieberman & Associates, P.C.
