Three people own, two want to sell. Now what?

Before buying property with others, you may want a written partnership agreement to anticipate future problems. ( Billy Hustace/Getty )

What are the options when three people own property and only two want to sell?

Great question, and it brings up one of my pet peeves: two or more people who buy property and make no provisions for contingencies — such as one wanting to sell, one dying or one not having the financial ability to continue to pay the fair share of real estate expenses.

In my opinion, you have only two choices. If the third person has money, you both can be bought out so the third person will own the entire property. But that doesn't always work. Even if the third partner has the financial ability, you may not agree on a buyout price.

The second option is to go to court and file what is known as a partition action. The courts throughout the nation have made it clear that if one or more people want out of a partnership arrangement, and if they can't reach an informal and friendly resolution, the courts will step in and force the sale. I have handled a number of such cases but always tell my clients — before we file suit — that the only winners are the lawyers and the speculator-investors who generally end up buying. I always encourage mediation before filing a lawsuit.

In my opinion, if two or more people buy real estate, they should enter into a written partnership agreement — before taking title — that attempts to anticipate future problems. It's always better to reach an agreement when you are talking with your partner rather than when you are fighting each other.

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We are considering buying a condominium. How can we find out information about the association? No meetings or accounting records are provided. We were only told the current condo fee for the unit and given a list of covenants.

If that is the only information you have received, I would run — not walk — away and look elsewhere. To my knowledge, most state laws require a condominium association to disclose a number of important things about the condo to prospective purchasers. It is called a “resale package” and typically includes the legal documents of the association, a statement of the current condo fee for the unit in question and a current budget. The resale package will also include insurance information, the amount of money in reserves and the most current auditor's report.

But getting information on paper is not always helpful. I always encourage potential buyers to go over to the association on a weekend, introduce yourself to people you see and ask them how things are in the condo. Most owners will be happy to provide information, and some of it may not be favorable.

You should also consider talking to the property manager of the association as well as the president or one of the board members.

You are considering making the most expensive investment of your life. Do your homework and make sure you will be comfortable.

I don't want to dissuade you from considering a condo, but I recently read an interesting book called “Escaping Condo Jail: The Keys to Navigating Risks & Surviving Perils of the ‘Carefree' Community Lifestyle.”

Written by Sara E. Benson and Don DeBat, it contains more than 600 pages of helpful information about condo living. According to the authors, the book can “help protect you from undisclosed liabilities and expenses.”

The authors make it clear they do not condemn all associations. They do, however, lament the fact that developers, legislators and board members have “failed to take long-term management into consideration — and today's inexperienced owners/buyers now are bearing the consequences.”

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