Can a Share of Jointly Owned Property be Sold in New York City

Can a share of jointly owned property be sold without the consent of all owners? The answer is it depends on what kind of jointly owned property it is. A share of jointly owned property can be sold if held in tenancy in common or joint tenancy with rights of survivorship. It cannot be sold if it’s held in a tenancy by the entirety, it cannot be sold without the consent of the other spouse.

It’s important to keep in mind that even if a share can be sold, it would be difficult to find a buyer for a share of a property, especially with a potentially hostile co-owner.

A Share in Tenancy in Common Can Be Sold

With a tenancy in common, each owner has a separate legal interest in the property. One owner can sell their interest without the consent of the others. A co-owner’s interest does not have to be equal and can be any percentage.

For example, if A (25%), B (30%), and C (45%) own a home as tenants in common, A can sell her 25% stake to a new owner without B and C’s consent. The new owner would then be tenants in common with B and C.

A Share in Joint Tenancy with Right of Survivorship Can Be Sold

In a joint tenancy with rights of survivorship, co-owners have equal interests and rights in the property. When one joint tenant dies, his interest automatically passes to the surviving tenant(s).

The deed must say “with rights of survivorship” to create this ownership. Otherwise, it’s a tenancy in common.

A joint tenant can sell his interest without the other joint tenants’ consent. The sale converts the joint tenancy to a tenancy-in-common as between the new owner and the joint tenants.

For example, if A, B, and C own a home as joint tenants with rights of survivorship, A can sell her one-third interest without B and C’s permission. The buyer becomes a tenant in common with B and C, but B and C remain joint tenants with rights of survivorship.

A Share in Tenancy by the Entirety Cannot Be Sold

A tenancy by the entirety automatically occurs when spouses acquire property together using the same deed. It is similar to joint tenancy with rights of survivorship. If one spouse dies, the interest passes to the surviving spouse. With tenancy by the entirety, one spouse cannot sell without the other spouse’s consent. Spouses cannot also file a partition action to force a sale.

Sales of co-owned properties involve complex legal issues regarding property rights and interests. Before taking any action, an attorney can advise you on your rights as an owner and options for resolving any disputes with co-owners. If you need legal representation, we at the Law Offices of Albert Goodwin are here for you.
We are located in Midtown Manhattan in New York City. You can call us at 212-233-1233 or send us an email at [email protected].

The Practical Problem of Selling a Partial Interest

Even when the law allows you to sell your share of co-owned property, finding a buyer is the practical challenge. A buyer of a partial interest in real estate inherits all the existing co-owners as their new partners. The buyer cannot exclusively occupy the property. The buyer cannot make decisions alone. The buyer's exit options are limited to either selling to the existing co-owners (who may not want to buy) or filing a partition action.

Because of these limitations, partial interests typically sell at substantial discounts from their pro-rata share of the full property's value. A 25% interest in a $1 million property might sell for $100,000 to $150,000 rather than $250,000 in an open market. Investors who buy these interests typically have a strategy — usually forcing a partition sale that ultimately produces full market value — but they want the discount to compensate for the time and litigation costs.

Partition as the Alternative

For co-owners who want to liquidate their interest but cannot find a third-party buyer at a reasonable price, the partition action is the standard alternative. A partition action filed in Supreme Court can force the sale of the entire property, with the proceeds divided among the owners according to their interests. Partition is available regardless of why you became co-owners and regardless of the other owners' wishes.

The partition process is more involved than a direct sale of one share, but it produces full market value rather than a discounted partial-interest sale. For most owners wanting out of a co-ownership situation, partition produces a better economic result than trying to sell a partial interest.

Tenancy by the Entirety: Special Protection for Spouses

Tenancy by the entirety provides special protections that married couples in New York automatically receive when they take title to property together (unless they specifically opt out). The protections include:

• Neither spouse can sell or encumber the property without the other's consent.
• Neither spouse can be forced to partition the property while the marriage is intact.
• The property is protected against creditors of one spouse alone (creditors of both spouses jointly can reach the property).
• The property passes automatically to the surviving spouse at the first spouse's death.

These protections end when the marriage ends. Divorce converts a tenancy by the entirety into a tenancy in common, and either former spouse can then sell, partition, or otherwise dispose of their share.

Joint Ownership and Estate Planning

The form of co-ownership has significant estate planning implications:

Tenancy in common. Each owner's interest passes through their estate at death (by will or intestacy). The surviving co-owners do not automatically take the deceased co-owner's share. This form is useful when each owner wants control over who inherits their share.

Joint tenancy with right of survivorship. The surviving owner takes automatically at death. This form avoids probate for the survivor but means the deceased's share does not pass to their heirs.

Tenancy by the entirety. Spouses-only version of joint tenancy with right of survivorship, with additional creditor protection during life.

Choosing the right form depends on the owners' relationship, their estate planning goals, and the property's role in the broader plan.

Disputes Between Co-Owners

Co-ownership relationships sometimes go wrong. Common disputes:

• Disagreement about whether to sell, rent, or hold the property.
• One co-owner not contributing to carrying costs.
• One co-owner exclusively occupying the property.
• Disagreement about repairs and improvements.
• One co-owner using the property for activities the others object to.

These disputes can sometimes be resolved through negotiation. When they cannot, the legal remedies include partition actions, accounting actions among co-owners, and (in tenancy-in-common cases) buyout negotiations supported by the threat of partition.

Buyout Arrangements

The most common resolution for co-ownership disputes is a buyout. One co-owner buys out the others' interests at a negotiated price. Buyouts can be:

• Lump-sum cash. The buying owner pays the others their share of the property's value all at once.
• Installment payments. The buying owner pays over time, typically with a mortgage securing the obligation.
• Property exchange. The buying owner gives the others other property of equivalent value.
• Refinancing. The buying owner refinances the property's mortgage and uses the proceeds to pay off the others.

Buyouts work when there is a willing buyer (typically the co-owner who wants to keep the property) and a willing seller (the co-owner who wants out). When no buyer exists or the parties cannot agree on price, partition becomes the path forward.