Partitions: A messy lawsuit to divide co-ownership of real property when there is not a Tenants in Common Agreement
Are you contemplating purchasing real property with a friend, family member, or business person? Might you be inheriting property with relative? Already own a home with someone who you are not married to?
If you do not have a Tenants in Common Agreement, which clarifies the rights and obligations or the parties and sets forth an exit plan in case of a disagreement, then you are left with the option of filing a partition, a messy lawsuit, if you can’t agree on how to manage the property.
What is a partition?
A partition is a lawsuit to divide the interest in property, either by:
judicially subdividing the property (Partition in Kind), or by
selling the property and distributing the proceeds to the co-owners (Partition by Sale).
A residential home or commercial structure will involve a partition by sale. Partitions are a lawsuit in district court that are tried to the the Court. The Court will determine each parties’ ownership share, and if the land is not easily divisible’ order a partition by sale. The Property will be sold at a sheriff’ s auction and the remaining proceeds divided among the parties per the Court’s order.
In the more uncommon case of easily divisible land, such as farmland or a undeveloped tract of land, the court may order a partition in kind and judicially subdivide the property. This also involves a trial to the Court and often a commissioner is appointed to make specific findings to the Court. This is a more complicated than a partition by sale.
Why do you want to avoid a partition?
Partitions are messy, time intensive and expensive. Often times its more an emotional problem than a economic problem, as you don’t buy a house with a stranger. Its almost always a ex-partner, family member, or close business associate. And instead of working to maximize the equity in the property, the parties pay lawyers and spend lots of money and time making what should be a mutually beneficial endeavor into a contentious exercise is wasting away the equity in the property
At a partition trial, the court employs an equitable determination standard that is complicated and affords a great deal of discretion and deference to the trial judge. And after all the effort, its is quite likely the judge‘s ruling will displease all of the parties, who will be left with far less than if they money messy lawsuits when there are easier alternatives available by establishing a tenants in common agreement.
How can a Tenants in Common Agreement can help you avoid the pitfalls of partition and ensure a harmonious co-ownership?
A Tenants in Common agreement clarifies and protects the rights and obligations of the co-owners. Additionally, they set forth an exit plan in the situation where someone wants out or there is a disagreement..
GLO helps investors interested in co-ownership avoid the mess of a partition lawsuit by reviewing and preparing Tenants in Common Agreements. A tenants in common agreement may limit or waive the ability of parties to bring a partition action. Tenants in common agreements offer co-owners the flexibility to determine an equitable and clear course of alternative dispute resolution.
How can GLO help?
If you are contemplating purchasing property with others or about to inherit property, reach out to GLO to set up a tenants in common agreement to ensure the co-ownership goes smoothly.
If you already co-own real property, it is not too late to contact GLO to set up a tenants in common agreement.
And if you are already in a co-ownership situation that is heading south, consider working with GLO to strategize how to best approach to reach an early and fair resolution and avoid a full blown partition.
Please fill out an Intake Form to inquire about working with GLO.
GLO has prepared this blog to provide general information on legal issues that may be of interest. This blog does not provide legal advice for any specific situation and this does not create an attorney-client relationship between any reader and GLO or its attorneys. GLO engages clients through a specific fee agreement. GLO does not guarantee any results.