911 Sell Partial-interest in Florida Property FAST!

Floria Heirs struggle to sell partial interest homes, condos, and other properties because of a lack of control, a limited buyer pool, difficulty getting a Florida mortgage, and complex shared decision-making, leading to lower market value and high discounts, with potential legal battles over management or sale if co-owners disagree, making them non-liquid assets. Florida investors generally are not interested in owning a fraction without control, making it hard to find someone willing to buy with no end to the legal disputes.

What are partial-interest Florida properties?

Partial-interest Florida properties are real estate assets co-owned by multiple individuals, where each person holds a percentage share of the Florida property, for example, 33%  rather than 100% full ownership, often arising from inheritance or family disagreements, leading to complexities in control and sale due to “lack of marketability” and limited decision-making power for individual owners. These shares, like Tenants in Common (TIC) interests, usually sell at a significant discount (20-30%) from their proportionate value because selling a piece of a whole property is difficult and less desirable for buyers.

One way in which these types of properties are created is through estate planning. Oftentimes, a passing Florida homeowner will split a property among multiple inheritors, most commonly family members, creating a partial-interest property. Most of these shares are transferred over time, without any money involved. More uncommon, and more troublesome, is when one of these Florida partial interests goes to market.

Appraising a partial-interest for sale on the market might initially seem straightforward. By applying simple math, one might assume that the price of a partial-interest property would be the total value of the property multiplied by the percentage ownership.

A proportional appraisal seems like a reasonable solution, but the partial-interest is really worth less than that percentage because few people actually want to own a fraction of a non-liquid asset, lowering its marketability on the open market. Consumers tend to steer away from partial-interest properties for a number of reasons.

Problems in selling partial interest properties

One of the biggest deterrents to purchasing a partial-interest Florida property is the limited control the buyer would have in making decisions about the property. Because such investments have multiple stakeholders, any renovations or modifications to the property, for example, must be approved by anyother owners who might not share your views. Lack of control weeds out many potential buyers, and the property tends to stay on the market for an extended period of time, further driving down the discount price.

Even if a buyer is interested, it’s nearly impossible in many markets to obtain a mortgage loan to buy a partial-interest property. Many banks refuse to grant financing for a partial-interest purchase because they would have no way to foreclose on a partial interest of a property if a borrower can’t keep up with payments. As a result, many of these transactions are cash only, severely limiting the pool of Florida home buyers. For these reasons, a discount on the value of the partial-interest property needs to be calculated when crafting an appraisal.

Florida Foreclosures on Partial Interest Real Estate

In Florida, foreclosing on only a partial interest (like a life estate or undivided share) is complex and often requires judicial oversight under Florida Statutes Chapter 45 for Florida mortgages or specific laws for other liens, aiming to sell the entire property if it’s indivisible (F.S. 64.071) or just the interest, but courts focus on fair value and protecting others’ rights, especially with HOA/Condo liens where statutes like F.S. 718.116 (Condo) and 720.3085 (HOA) govern priority and partial payments, though general foreclosure follows F.S. 45.031 (judicial process). 

When Is a Partition Sale Used In Florida? 

A Partition Sale is used when co-owners (family, partners, heirs) disagree on selling, renting, or managing a property. A Florida partition sale is a court-ordered forced sale of jointly owned property (like a house or land) when co-owners can’t agree to sell or divide it, allowing one owner to force a sale to cash out their interest under Chapter 64 of the Florida Statutes partion sale, with proceeds divided based on ownership, often after accounting for expenses. It’s a way to terminate co-ownership, usually resulting in a court-supervised sale (private or auction) if physical division (partition in kind) isn’t feasible.