What is the process of refinancing and buying out the other owner? – South Carolina

Short Answer

In South Carolina, refinancing to buy out a co-owner usually means (1) confirming who legally owns the property, (2) agreeing on a fair value and the buyout amount, (3) closing a new loan that pays off any existing mortgage and funds the buyout, and (4) recording a deed that transfers the other owner’s interest. If the co-owners cannot agree, a partition case in the Court of Common Pleas can force a resolution, and South Carolina law gives non-selling co-owners a structured chance to buy out the selling co-owner through the court process.

Understanding the Problem

In South Carolina probate and inherited-real-estate situations, the common question is: can one co-owner keep the property by refinancing and paying the other co-owner their share, instead of selling the home? The decision point is whether the co-owners can complete a voluntary buyout (with a refinance or other funds) or whether the dispute requires a court-supervised partition process in the Court of Common Pleas.

Apply the Law

South Carolina generally allows co-owners (including heirs who end up owning together) to resolve ownership by agreement: one owner pays the other owner for their share, and the selling owner signs a deed transferring their interest. If the co-owners cannot agree, South Carolina law allows a partition action in the Court of Common Pleas to divide the property or sell it, and the statutes provide a buyout opportunity for certain co-owners during that case. In probate, the personal representative may also need to complete a deed of distribution to place title into the heirs before a refinance or buyout can close.

Key Requirements

Clear title and authority to sign: The refinance lender and closing attorney must confirm who owns the property now (for example, heirs after an estate distribution) and who has authority to sign the deed and loan documents.
Agreed value and buyout amount: The parties typically need a written agreement on value (often supported by an appraisal) and the exact amount being paid for the other owner’s share, including how existing mortgage debt and closing costs are handled.
Proper transfer and recording: The selling co-owner must sign a deed transferring their interest, and the deed (and any mortgage documents) must be recorded in the county land records so the public title matches the deal.

What the Statutes Say

S.C. Code Ann. § 15-61-10 (Partition; heirs’ property determination) – Allows partition between co-owners and requires a court to determine whether property is “heirs’ property” in a partition case.
S.C. Code Ann. § 15-61-50 (Court of Common Pleas jurisdiction in partition) – Gives the Court of Common Pleas jurisdiction to partition property in kind or by sale.
S.C. Code Ann. § 15-61-25 (Right of first refusal in partition; procedure) – In many partition cases, non-petitioning co-owners can notify the court and purchase the petitioning co-owner’s interest, with court-approved appraisal and a payment deadline.
S.C. Code Ann. § 15-61-370 (Cotenant buyout option when partition by sale is requested) – In heirs’ property partition cases filed on/after the statute’s effective date, sets a structured buyout process, including notice and a court-set payment date (not sooner than 60 days after notice).
S.C. Code Ann. § 62-3-907 (Deed of distribution) – If real estate is distributed from an estate in kind, the personal representative must execute a deed of distribution for real property.

Analysis

Apply the Rule to the Facts: When two people own South Carolina real estate together (often after an inheritance), a refinance-and-buyout works best when title is already in the co-owners’ names (or can be placed there through a deed of distribution) and both parties will sign closing documents. If one owner wants out and the other wants to keep the property, the buyout amount usually tracks the agreed value multiplied by the selling owner’s fractional share, adjusted for any mortgage payoff and closing costs. If agreement breaks down, a partition action can create a court process that may still allow a buyout, but with court deadlines and appraisal steps.

Process & Timing

Who files: For a voluntary refinance buyout, no lawsuit is required; the refinancing owner applies with a lender and works with a South Carolina closing attorney. Where: Closing and recording occur through the county Register of Deeds or Clerk of Court (depending on the county’s recording office). What: A new mortgage (refinance), a deed from the selling co-owner to the buying co-owner, and (if probate is still being administered) a deed of distribution from the personal representative. When: Timing depends on lender underwriting and whether probate/title issues must be cleared first.
Value and payoff are confirmed: The lender typically requires an appraisal; the closing attorney obtains payoff figures for any existing mortgage and prepares a settlement statement showing the buyout funds and payoffs.
Closing and recording: At closing, the new loan funds pay off the old loan (if any) and pay the selling co-owner the agreed buyout amount. The deed and mortgage are recorded so the buying owner becomes the sole owner of record (or holds the agreed new ownership share).

Exceptions & Pitfalls

Probate not finished (title not ready): If the estate has not distributed the property yet, a lender may not close until the personal representative has authority and the correct deed (often a deed of distribution) is prepared and recorded.
One co-owner refuses to sign: A refinance buyout usually cannot happen without the selling co-owner signing a deed. If cooperation is not possible, a partition action may be the tool that forces a resolution.
Heirs’ property complications: When property qualifies as “heirs’ property,” the partition process can include extra steps (including valuation and buyout procedures) that affect timing and strategy.
Mortgage payoff and release issues: After payoff, the old mortgage should be satisfied/released in the county records. Delays in recording satisfactions can create title problems for future sales or refinancing.

Conclusion

In South Carolina, refinancing to buy out a co-owner usually requires clear title (often through probate distribution), an agreed value and buyout amount, and a properly signed and recorded deed transferring the other owner’s interest. If agreement is not possible, a partition action in the Court of Common Pleas can force a resolution and may include a court-structured buyout option with strict notice and payment deadlines. The most practical next step is to confirm current title and, if probate is involved, ensure the correct deed of distribution is prepared and recorded before scheduling the refinance closing.

Talk to a Probate Attorney

If a co-owner buyout is tied to inherited property, probate timing, or a potential partition case, our firm has experienced attorneys who can help explain the steps, paperwork, and deadlines that can control whether a refinance buyout is possible.

Disclaimer: This article provides general information about South Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed South Carolina attorney.