re: Land ownership question about property with multiple owners

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Explain to me like a 16 year your LLC reasoning?

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I just always hear that is the way to go with multiple people buying land as partners, at least in LA, and it making the title and potential issues easier to deal with. I'm not the one to ask and I don't pretend to know everything or give any legal advice, but I would imagine it would make things easier and let you put some operating agreements or by laws into the creation that would provide for situations like this.

However, it is a little late for that now that a potential dispute has already arisen. Your best bet is to get a real estate lawyer and not just whatever lawyer you can find. Have them deal with it and talk to the bank. Buy once cry once.

This is correct. Best of luck, not easy or cheap.

There isnt a default other than the age of #1. They will not be around to see the payoff of #2 and #3. Don’t want to deal with this after the fact of a death or right mind. Real estate attorney seems to be the play first play.

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600 acres purchased by 3 individuals. The bank loaned the money to them as unbroken property. From what I understand this is rarely done but does happen. Owner # 1 paid his entire loan amount on the property. Owners # 2 and 3 still owe on the property. Can owner #1 separate his 200 acres from #2 and 3?

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-it’s called undivided and it is not rare for a bank to do this
-owner 1 paid off their portion of the loan
-you could partition the property out, which would see odd considering it seems like you wanted to own 600 acres with two buddies. The bank would still have a mortgage on all 600 acres and owner 1’s, as well as 2 & 3, guaranty on the loan. If 2&3 are financially strong enough they may be able to secure financing for their respective 200 acres and get the mortgage released and the original loan paid off.

Yes. I’ve done it on a larger acreage development that I had a mortgage on but wanted to start parceling it out for sale. It’s called a partial release. It will require subdividing the land with a survey, an appraisal of the old and new properties seperately, and a willing bank.

I believe any co-owner can cause a partition by licitation to occur. That's causing the property to be sold and then proceeds divided up by ownership percentage. The alternative is partition in kind which is dividing the actual property into sections in accordance with ownership percentage.

That's all I got.

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A lawyer would have to read the documents. That takes time.

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No doubt. I can't imagine. And oftentimes something pops up out of nowhere, an error in a property description which has to be corrected and Lord have mercy hopefully there weren't erroneous transfers of title over time containing incorrect description etc etc etc. Sounds like some tedious lawyer work. I couldn't do it, don't have the attention span. I like just showing up to court and figuring out only then what I've got for the day. Totally joking but I'm sure it's been done.

Lots of good info in here. I would add, stop thinking that each own 200 acres. They own 1/3 interest. Very rarely does a property that large have equal value to every square foot. So what happens is a survey combined with appraisal work will be needed. Someone might get 75 acres that’s good high ground with road frontage and timber value. Someone might get 300 acres of bottomland with limited access. It’s not all about the size, it’s about the value. Each owner should come out with equal value not equal acreage.

Then you will need a bank willing to refinance the other 2 tracts separately so the other owner has separated their interest.

All of this will be difficult and very expensive. But definitely better to do before a death brings multiple heirs to the table.

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You start dealing with splitting it up and roads, highways , utilities, timber, access, etc will make it a nightmare, not like just splitting it into 4 equal size parcels is going to work

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That's what I was thinking. All 3 parcels are likely not equal in terms of location, landscape, roads, etc, so splitting it in 3 where everyone feels like they got the same value sounds difficult.

No the land is in the Ms Delta I live in Alabama. This is my spouses family. The land is part crop, 20 year pines, Some cutover regrowth and some 20 year oaks planted on the creeks. My father in laws paid for and he has come to the realization that he will be dead before the other parties get theirs finished. This is going to leave his daughter with every disaster situation listed above. I appreciate the response from everyone. I have learned a lot from your post. We will be finding a real estate attorney ASAP. From what many are saying the other parties could continue to just pay the minimum and we would actually never fully own our part.