When partners cannot agree on a buyout price and physical division is not possible, selling the property on the open market is typically the final resolution in dissolution proceedings. Understanding how this process works helps partners maximize what they receive.
How Open Market Sales Work in Dissolution
A court-ordered open market sale involves appointing a real estate agent to market the property, setting a minimum price, and selling to the highest qualified bidder. The process is similar to a normal property sale but with court oversight to protect all parties’ interests.
Selecting the Real Estate Agent
When partners cannot agree on a real estate agent, the court may appoint one. Having input into this selection – recommending qualified agents with relevant market experience – is preferable to leaving the decision entirely to the court.
An effective agent can make a significant difference in the final sale price achieved.
Marketing the Property
The property should be marketed as effectively as possible, reaching the broadest pool of potential buyers. This means professional photography, listings on major real estate platforms, open houses, and potentially reaching specific buyer groups that might value the property particularly.
A dissolution property should not be marketed in a way that signals distress or urgency, as this invites lower offers.
Reviewing and Accepting Offers
All qualified offers above the minimum price should be reviewed. The court oversees the acceptance process to ensure the highest achievable price is obtained. Partners typically have the right to receive and comment on offers before acceptance.
Distribution of Proceeds
After the sale, proceeds are distributed according to court order: first to settle any encumbrances and obligations, then to the partners according to their ownership shares (adjusted for any compensation claims between partners). Tax obligations are settled from the proceeds before distribution.
