Page 24M — Real Estate & Home Builders Guide — November 2015
Ex-friend out, new co-owner in
By Ilyce Glink and Samuel J. Tamkin,
Tribune Content Agency
a settlement agent and obtaining title insurance,
you have to be pretty savvy and knowledgeable
in real estate to do it that way. There are pitfalls
I co-own a condo with an ex-friend and risks in buying real estate, and even though
and would like to buy-out his share. I you’ve owned the property with your ex-friend and
cannot afford to be the sole owner, but assume that you know the status of your property,
I have found another person to co-own your new co-owner might be incurring risks in
the same condo with me. What is the process in accepting documentation from your ex-friend
EX\LQJRXWWKH¿UVWFRRZQHUIRUWKHSURVSHFWLYH without doing his own due diligence or by working
new co-owner without getting a real estate agent through a title company.
For example, if your ex-friend has tax problems
involved?
You’re right; you probably don’t need a with the IRS, those tax problems could become
real estate broker to handle your issue. your new co-owner’s problems. For this reason,
But you will need either a real estate if you live in a place where real estate attorneys
attorney, title company or settlement are customarily used in residential transactions,
agent to handle the transaction. In essence, you’re you should hire one to help you out. If you live
going to need your ex-friend to sell his interest in a place where you don’t usually use real estate
in the condominium to this new person who will DWWRUQH\V \RX FDQ HLWKHU WU\ WR ¿QG RQH RU KLUH
a good settlement agent and your new co-owner
co-own the property with you.
Keep in mind that your ex-friend is selling his should get title insurance on his purchase of his
interest, and that sale will be similar to a sale of interest in the condominium.
Lastly, if you and your ex-friend had a mortgage
the whole condominium. If your new co-owner is
buying out your ex-friend using cash and will not loan on the property, you might have to handle
need a lender, your paperwork will be less. But, WKH ZKROH WUDQVDFWLRQ WKURXJK D UH¿QDQFLQJ $W
your ex-friend will have to convey his interest to WKH WLPH \RX UH¿QDQFH WKH ORDQ \RXU H[IULHQG
your new co-owner by deed and you’ll likely need would transfer his ownership interest to your new
co-owner and you and the co-owner would take
a settlement agent to handle the transaction.
There are limited situations you can avoid using out a new loan on the condominium. If you don’t
Q
A
do it this way and you have a loan on the property,
we don’t see why your ex-friend would want to
sell his share of the condominium without being
released from the loan obligation that he and you
signed.
If your ex-friend sells his share of the condo-
minium without being released from the loan
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damaged if a loan payment is not made on time or,
worse, if you stop making the loan payments all
together. For this reason and for a cleaner break
with your ex-friend, you’d want the condominium
ownership to match any loan obligations. That
means if you have an old loan, you should pay that
off and take out a new one.
Please consult with an attorney to help you
better understand the situation and choices you
have.
Ilyce Glink is the creator of an 18-part
webinar+ebook series called “The Intentional
Investor: How to be wildly successful in real
estate,” as well as the author of many books
on real estate. She also hosts the “Real Estate
Minute,” on her YouTube channel. Samuel J.
Tamkin is a Chicago-based real estate attorney.
Contact Ilyce and Sam through her website,
ThinkGlink.com.