Partition Action to Resolve Co-Ownership Disputes

Filed under: Real Estate Law

Relationships, whether business, financial, or personal, don’t always work out the way we plan. Unfortunately, most people don’t plan an exit strategy in the event a relationship ends. This creates problems, especially when it involves co-owned real estate.

When people purchase real property together but don’t plan on how to sell or otherwise transfer the property at a later date, the joint ownership of the property can end up being burdensome and complicated. Perhaps one owner wants to sell the property while the other does not. Or maybe one wants to live in the house and the other wants to be bought out. There are a countless number of scenarios.

In these cases, the parties are left with three alternatives: One party buys out the other party, the parties agree to list and sell the property, or the parties cannot agree and the property is sold through a legal proceeding known as a partition action. The first two alternatives offer the most peaceful and least costly methods to resolve the dispute between the parties. If there is no agreement between the parties, a partition action can serve as the vehicle to end the dispute.

Types of partition action.

Various types of partition actions exist. In the most common scenario, the judge will order the property sold, and an accounting will be prepared to determine each owner’s financial contribution to the property. The Court can then determine each party’s share of the sale proceeds. For example, in the event of two co-owners who originally split the cost of the property evenly, each will be awarded fifty percent of the sale proceeds. Other situations can become more complicated, depending upon the number of owners and the amount originally invested in the property as well as the manner in which title is held.

Partition actions can sometimes result in the division of the actual property, with no sale required. This can often be accomplished in the case of an unimproved piece of land. For example, a four-acre lot could be divided into two, two-acre parcels (assuming the property is sub-dividable).

In some cases, one or more co-owners might be living at the property in question. Unfortunately for this individual, residence takes a backseat to legal ownership. The property can still be subject to a partition action, and the individual in residence could be forced to move.

If you are facing a dispute related to co-ownership of a property, consult with our real estate attorneys in order to explore the options available to you.

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