Family farm - partition

[southerntester]

What is the name of your state? Virginia

Our family owns a 180+ acre farm in Virginia. My brother and I each own 1/12 of the farm. Our cousin and her husband has lived there for 20+ years rent free and now have served us with a partition notice. They had a friend provide a BS appraisal at $750k and want to force us to sell at that price. Our investigation discovered that most of the surrounding land has been bought by a large company and the sales averaged over $14k per acre. Our suspicion is that our relatives already have a deal in place to sell our farm to this major company for many times what they are proposing to us. The cousin is supposed to be buying everyone out to keep the farm in the family and not interested in selling out.

We retained an attorney but haven't been happy with their response times or legal suggestions to this point. They are pushing us to accept the low offer and just move on.

During this we reached out to another local appraiser and got an unofficial value of $1.1 million, nothing in writing though. They did not use the recent sales of the surrounding properties for comps.

We want counter with the $1.1 value and take our 1/12 for now plus a clause that if the farm sells in the next 15 years we also get 1/12 of that sale as well.

Any help would be appreciated...

 

[LdiJ]

What is the name of your state? Virginia

Our family owns a 180+ acre farm in Virginia. My brother and I each own 1/12 of the farm. Our cousin and her husband has lived there for 20+ years rent free and now have served us with a partition notice. They had a friend provide a BS appraisal at $750k and want to force us to sell at that price. Our investigation discovered that most of the surrounding land has been bought by a large company and the sales averaged over $14k per acre. Our suspicion is that our relatives already have a deal in place to sell our farm to this major company for many times what they are proposing to us. The cousin is supposed to be buying everyone out to keep the farm in the family and not interested in selling out.

We retained an attorney but haven't been happy with their response times or legal suggestions to this point. They are pushing us to accept the low offer and just move on.

During this we reached out to another local appraiser and got an unofficial value of $1.1 million, nothing in writing though. They did not use the recent sales of the surrounding properties for comps.

We want counter with the $1.1 value and take our 1/12 for now plus a clause that if the farm sells in the next 15 years we also get 1/12 of that sale as well.

Any help would be appreciated...

If your cousin really intends to keep the property in the family there is a limit that your cousin can pay and make it work. The income from farming would have to be sufficient to service the loan. Plus while I appreciate your intent when you say that you want 1/12th of any future sale, that would be patently unfair. Perhaps you could strike a deal for the difference between 1/12th of the sale and what you are being paid now, but to simply get another 1/12th of the sale on top of what you get now would be giving you way more money than would be remotely fair and even that kind of deal is highly unusual.

You should also be aware that in a partition suit the property in question is normally sold at auction. You could end up getting even less than your cousin is offering if the property is sold at auction. Now, I am not saying that you should roll over and play dead if your cousin truly is not offering a fair deal. However, if your attorney thinks that you should take the offer, that is a fairly decent sign that it may be a reasonable deal.

 

[STEPHAN]

Have you thought about buying their shares?

 

[adjusterjack]

Our investigation discovered that most of the surrounding land has been bought by a large company and the sales averaged over $14k per acre. Our suspicion is that our relatives already have a deal in place to sell our farm to this major company for many times what they are proposing to us.

Why don't you contact this major company, find out what the deal is and see if you can get you and your brother bigger pieces of the pie?

 

[adjusterjack]

You should also be aware that in a partition suit the property in question is normally sold at auction.

A partition action can also result in subdividing the property when possible so that the brothers can still own a piece and the relatives can do what they want with their share.

 

[AlmostThere]

What is the name of your state? Virginia

During this we reached out to another local appraiser and got an unofficial value of $1.1 million, nothing in writing though. They did not use the recent sales of the surrounding properties for comps.

We want counter with the $1.1 value and take our 1/12 for now plus a clause that if the farm sells in the next 15 years we also get 1/12 of that sale as well.

Any help would be appreciated...

You should get your own official appraisal based on recent sales of the surrounding properties. That is the best indicator of what your property would sell for, and therefore, what it is worth.

 

[quincy]

A partition action can also result in subdividing the property when possible so that the brothers can still own a piece and the relatives can do what they want with their share.

It is more difficult to subdivide the property equally in that way when there are houses/buildings on the property.

Here is a link to Virginia’s law on partitions:

https://law.lis.virginia.gov/vacodefull/title8.01/chapter3/article9/#:~:text=If the court orders a,the parties as a group.

If I understand correctly, the cousin and her husband are saying the 180 acres as a whole (which would presumably include the house/buildings) is valued at $750,000, or $4167/acre. Southerntester wants $6111/acre based on a $1.1 million valuation. The $1.1 million valuation would mean $91,667 each for her and her brother as opposed to the cousin’s proposed $62,500 each for the 15 acres they each own.

That’s quite a difference - although of course not as much of a difference as it would be if the property as a whole was actually valued at $14,000/acre.

It seems that another real estate lawyer is needed. Additional property appraisals appear necessary.