Texas is home to many joint property owners. Whether it’s a family owning a vacation house or two business partners buying commercial property, disagreements are bound to happen at some point! If you’re one of the unlucky ones who finds yourself in the middle of joint property ownership disputes, don’t worry! We’re here to help. In this blog post, we will discuss some of the most common disputes and how you can solve them.

Joint Property Owners

You can easily own property together in Texas. All you need to do is sign the necessary documents at a title company when purchasing. You can also easily fall into joint property ownership disputes!

But before we look at types of disputes, let’s see the three ways to own property jointly in Texas:

  • Community property ( in a marriage relationship): This ownership is automatically without right-of-survivorship unless the couple signs right-of-survivorship agreements
  • Joint Property (with or without right-of-survivorship). With right-of-survivorship, the arrangement is called “joint tenancy.” Without right of survivorship, the term is “tenancy in common.”
  • Life estate

Let’s look more at how these types of property ownership work.

Community Property Ownership

As a married couple in Texas, your property is automatically deemed community property. Furthermore, you have the option to possess it together with right-of-survivorship so that when one of you passes away, the other will inherit the asset without complication or delay. With this clause in place, should anything happen to either spouse during their lifetime, the surviving partner will immediately be given full ownership of the property.

If you do not own the property with right-of-survivorship, when one spouse dies, the other spouse’s share of the property goes to their estate.

Joint Ownership of Property

If you are not married and own property with another, you own the property based on your agreement with the other owner(s).

Your tax and monthly loan payments depend on your percentage of legal ownership, If you have a right-of-survivorship clause, the property passes on to the other owner(s) after one owner’s death.

Life Estate Joint Owner

A life estate is how an older person often gives an heir an ownership interest.

An attorney can draft a life estate title that transfers partial property ownership to another individual. This form of joint ownership restricts the original owner from having complete control over the sale or refinance of the property, as they are now bound by the agreement to seek permission from their co-owner before any such transactions can take place.

Joint Property Disputes

When two or more people own property together, there is always the potential for disputes to arise.

  • Who decides what happens when it comes time to sell?
  • What if one person wants to make changes and the other doesn’t?
  • How do you handle taxes and maintenance expenses?

These are just a few of the questions that can come up when joint property ownership is an issue. Especially when one owner wants to sell, and other joint owners do not, you can have a mess to solve!

Consulting an experienced real estate attorney specializing in Texas state laws to help resolve disputes for your property. And before signing on the dotted line with another owner, avoid disputes by talking with your attorney about your interest in the property and other potential sticking points. Your attorney can help you prevent disputes down the line.

Let’s look more in-depth at the types of property disputes that can come from co-owning property.

Debts and Obligations

Any debt or obligation incurred by the other owner could affect you. You can face the consequences if the joint owner of your real estate property is irresponsible, including:

  • Filing bankruptcy
  • Bringing down a tax lien for lack of payment
  • Developing a judgment against themselves

The above issues can cause creditors to place a lien on the home. Creditors can seize your property to collect a debt that is not yours if you do not possess a homestead exemption. Your property could end up at a public auction!

In this situation, filing a suit for an injunction is the best way to protect your rights as a property owner. It’s important to seek advice from an experienced real estate attorney who can provide you with the necessary information and guidance to ensure a successful outcome. An experienced attorney can interpret the applicable laws and build a strong case in your favor.

Disagreements About Selling or Refinancing Your Home

All joint owners must sign off on a property sale. A common disagreement is whether to sell a property or whether to accept an offer to buy the property.

Many disputes arise about whether to repair before selling or how much remodeling is needed for the best price.

You may have different opinions when it comes to refinancing and whether the interest rates make it worth doing. There could be debates over which lender to use for the refinance or disagreements on the specific terms of a new contract. Additionally, if one partner has poor credit, the other may want to buy out their partner and refinance in their own name.

Wanting to take a co-owner to court and force a sale is not uncommon. However, forcing a property sale is often expensive, and the lawsuit can be a long-drawn-out affair.

If your co-owner is a family member, it may also cause unintentional emotional pain for other family members and yourself. With family involved, you may choose to compromise instead of filing suit to avoid family strife.

Incapacitation or Incompetence

Suppose your co-owner becomes incapacitated through accident or illness. In that case, you a court may appoint a guardian or conservator to represent their interest in any sale of property.

However, there is no guarantee that you will agree with a guardian’s decisions about the jointly owned property. You may need to file a lawsuit to represent your legal rights!

Tax Disagreements

If you sell a home for more than you originally paid for it, the federal government charges capital gains taxes based on the increase in value. Even if the sale proceeds will be worth it to you, another owner may disagree. You and your co-owners could dispute whether selling could cause additional tax payments.

If you buy and place a property in joint tenancy with an unmarried partner, the IRS will consider it to be a taxable gift to them. This can come as a surprise to many co-owners who may not have accounted for such taxes when making their decision to enter into co-ownership.

Unexpected tax bills can lead to financial strain on the partnership, leading one or both parties to reconsider whether or not it still makes sense to continue joint ownership of the property.

Life Estate Issues

If you make an adult child co-owner but sell the property, you’re both responsible for capital gains taxes. Your adult child may be unable to afford a tax bill based on decades of appreciation.

You can also create gift taxes for your heir by sharing property jointly.

Partition Lawsuits: Finding Answers to Real Property Joint Ownership Disputes

Joint ownership can cause unintended consequences and complications. Depending on how much ownership you hold, you and the other owner(s) can disagree about a myriad of issues.

Common joint ownership disputes include:

  • Taxes (who should pay?)
  • Future plans
  • Selling or renting the property
  • Improvements on the property
  • Maintenance choices
  • Living situations
  • Whether you have a right-of-survivorship clause
  • Refinancing
  • Other problems, such as one owner’s debt or obligations infringing on your right to keep the home

When the co-ownership agreement is not working, and joint property disputes arise, emotions can heat up. When no one knows how to go about resolving joint property disputes, joint tenants may reach an impasse. At that point, co-owners may call in an experienced property lawyer to bring professional advice to the table.

A property owner can often force a sale using a partition action lawsuit. In a partition lawsuit, the judge can order a forced property sale.

The court will look at the joint property dispute and divide property proceeds equally among the owners (or according to the percentages owned by each co-owner)

If you have questions about selling or managing jointly owned property, speak with a qualified real estate attorney in Texas.

Real estate lawyers can help with more than just working out an agreement between you and other co-owners. They can advise you on the following issues and more!

  • Create the real estate contracts for your best interests
  • Advise you on your options for selling property that is in poor repair or located in an undesirable area
  • Draw up agreements between heirs to own property together
  • Help joint owners decide whether to sell and work out agreements about how to own property together
  • Place property into a trust
  • Negotiate mortgage issues with a bank
  • Eliminate tax or mechanic liens on a jointly-owned property
  • Initiate short sales, forbearance deals, cash for keys, or other programs to help sell a jointly-owned home
  • Represent you in a partition lawsuit

Don’t try to go through the process of selling or managing jointly-owned property without legal assistance. Bring in a real estate attorney to help settle what is fair according to Texas law.

Find Answers With Experienced Texas Real Estate Lawyers

Our real estate lawyers at Jarrett Law can help as you file injunctions, petitions, or lawsuits to settle joint ownership issues.

We understand the legal issues and complex relationships involved in joint property ownership. We are committed to understanding your needs and helping you create a plan that will give you peace of mind and enable you to reach your desired outcomes.

Contact us today for a consultation and find out how we can help you!