What is: An undivided interest in real estate?

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Where Is My 1 Acre Of Land?:

My father and I have both encountered the situation where an unhappy couple drops by our offices saying that they thought they bought an acre of land through a magazine advertisement, but now they're being told that their 1 acre does not exist.  They want us to help them find their property or to sue the *#$)# that sold the property to them.  Sometimes we can help them with a lawsuit; however, if they bought an undivided interest...we can't help them find their 1 acre.

What Did I Just Buy?:

    Here's a situation that some of you may have run into when buying real estate online or through advertisements in newspapers or magazines.  You hear about a great deal on a piece of land--e.g., 100 acres 1/100 undivided interest for only $5,000!!!   The next thing you know is that you are headed down to see your 1 acre of land only to find out that it does not exist.  You didn't buy 1 acre of land.  Instead, you bought a 1/100 common interest in the entire 100 acres.

    If you buy a 1/100 undivided interest in real estate, here is what you own:  You have a 1/100 ownership as a tenant in common with the other holders in the entire parcel of real estate--i.e., you get to share!
What Can I Do With It?:

    So, if you don't own an acre of land...what do you own?  You own the right to use--in common with the other 99 shares of interest--the entire 100 acres.  You can camp on it, build on it, mine it, etc.--just like you owned the entire thing.  The catch is...so can the holders of the other 99 shares of interest.  And if you improve the real property, that improvement inures to the benefit of all owners--e.g., if you build a house on the property, it's not just your house!

    This means that an undivided interest is not always a bad purchase.  You can think of it as a timeshare.  You might be interested in having 100 acres of land to hike on and camp on and might not mind if a limited number of other people have access.  However, if you're planning on building your retirement home on an undivided interest...you're building on a bed of sand.

What Can I Do About It?:

Generally, I recommend that people don't buy an undivided interest in the first place (however, in some circumstances undivided interests may make good investments--e.g., undivided interests in mineral properties).  This means that you need to make sure to read your contracts, read your deeds...and only purchase from reputable sellers.  After that...

Unfortunately, after the purchase there may not be much you can do.  If you've already paid for the property, you should contact an attorney licensed to practice law in the location of the property and ask about what remedies may be available.  eBay rules specifically prohibit the sale of undivided interests in real estate as do the laws of some states.  Texas has some laws limiting the sale of undivided interests, but does not have an outright prohibition on such sales in all cases. 

    One possible solution is to bring a suit to partition and sell the property.  This is often the only means for a tenant in common to gain outright ownership--i.e, by "carving out" your interest--of a portion of the property in order to sell it to a third party.  There are two types of partition that can be ordered by the court--a partition in kind or a partition by sale.  A partion by kind is a division of the property itself with the land being divided amongst the tenants in common according to their fractional ownership.  A partition by sale is a sale of the property with the proceeds beings split amongst the tenants in common according to their fractional ownership.  A bit of warning, however, if there are 100 tenants in common...get ready for a messy partition!

    On a personal note, my family is in the business of buying and selling real estate, but we will not buy or sell an undivided interest in any property.  Whether or not it is against the law, we view it as unethical and steer clear of such practices.  We suggest that other sellers do the same--and that buyers take care to make sure they know what they're getting into before they buy and undivided interest.


   If you don't see what you're looking for, feel free to pick our brains a bit.  Drop us a line and let us know what you're interested in.  Write Andrew at texasacreage@yahoo.com.   And please visit our ebay store to take a look at our properties for sale at www.maklandcompany.com.


My father and I are both attorneys licensed in the state of Texas.  We are providing this information as an aid to eBay members, but must make the caveat that we are not rendering legal advice.  Please contact an attorney if you need advice on a specific matter.
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