Low Sales Price for Half-Interest in Real Estate Okay
A recent case, NAV Bank . LaSalle Bank, N.A., 2013 IL App (1st) 121147 (January 22, 2013) Cook Co.,1st Div. found that it was fair to sell a half-interest in a home at a forced sale at a price significantly below half of the market value of the home.
NAV Bank revolves around a dispute over a single family home that began in the 1990s. After much litigation, one family, the Toms, won against the other party, Adeline Moy. Ms. Moy has since passed, and the Toms attempted to enforce the judgment against Ms. Moy by going after her interest in the home that she and her husband, Mr. Moy, owned.
After much maneuvering, Ms. Moy’s half-interest in the home was sold. The Toms purchased the half-interest for $20,000, even though the house appraised at $280,000. No one else placed a bid. Mr. Moy asked the court to set aside the sale on the grounds that the sales price was too low.
In the end, the court did not agree. What it boils down to is this: Buying a half-interest in a house is nowhere near buying the entire house. Any such ownership will be fraught with difficulties and disputes. No one would pay half the market value of a house for buying only a half-share in the house. By its very nature, such a purchase must be significantly discounted. Therefore, the sales price of $20,000 is fair.