New Jersey  |  Real Estate Law

Legal Question

Asked on: 9/03/13, 5:21 am

"I own a property in ocean city with 7 siblings (condo left to us after our parents passed away.) I am asking to be bought out. It is my understanding that there is a 'penalty' applied to the value of share, Anywhere from 0 to 35%. Is that true? And, help me understand the reasoning behind it?

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Answered on: 9/03/13, 6:16 am by Barry Gartenberg

It sounds like you are referring to the "minority interest discount" which is applied when less than a controlling ownership interests in business is valued. In such cases, one can argue that a minority interest in a business should be discounted because the owner lacks the ability to control the business and the interest is not readily marketable. Minority discounts are not "mandatory." The applicability of the discount is most typically negotiable. Please feel free to contact me if you want more information (973-921-0600). Kindly understand, this does not constitute legal advice or opinion. And, this this exchange does not create an attorney-client relationship.


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Barry F. Gartenberg LLC 505 Morris Avenue Suite 102 Springfield, NJ 07081

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Answered on: 9/03/13, 8:25 am by Miriam Jacobson

The business minority situation doesn't really apply to buy-outs among siblings for a property they own in common. They may be trying to push you into giving up your interest for less than its value. If you consult with Mr. Gartenberg, mention this to him.

THIS RESPONSE IS NOT LEGAL ADVICE, SINCE I DO NOT HAVE ALL OF THE INFORMATION THAT WOULD BE REQUIRED, AND I DO NOT HAVE A REPRESENTATION AGREEMENT WITH YOU.

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Law Offices of Miriam N. Jacobson 1900 JFK Blvd. Suite 1519 Philadelphia, PA 19103-1431

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