Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.
Sometimes we can find ourselves co-owning property with one or more co-owners wanting to be bought out. Even if we are in the process of converting ownership of the co-owned property into assets owned by an LLC, it becomes important to value the property and each person’s portion.
While it may seem to be a simple problem of division, it becomes more complicated when the value of an entire property is worth more than the sum of its parts.
I have previously written about the struggles of co-ownership of property, even between or among family members. As much as we like to avoid informal co-ownership, we sometimes find ourselves inheriting property with other people or we find ourselves joining with other people to secure enough money to purchase a certain property.
In such instances, I always recommend immediately converting ownership of the co-owned property into assets owned by an LLC that is governed by a well-written operating agreement. A well-written operating agreement necessarily includes a detailed buy-sell process to accommodate the eventual separation of co-ownership.
Read more about valuing property components in Lee’s article for the Lima News, “Legal-Ease: Valuing components of co-owned property.”
Source: LimaOhio.com, “Legal-Ease: Valuing components of co-owned property,” by Lee R. Schroeder, April 1, 2017.