When multiple property owners cannot agree on the use, division or sale of their property, a partitioning process is necessary. The situation can arise when a property is inherited or when co-owners or business partners disagree about the future of the property. This allows co-owners of the property to divide it equitably and each party can take control or receive compensation by selling their part. Co-owners in a deadlock must understand the legal process for partitioning real property.
Different types of partition
Two primary types of partition exist: partition in kind (in-kind partition) and partition by sales.
- Partition in kind: This type involves physically dividing property between co-owners. The value of each party’s share is equal to the portion they receive. The best case scenario for a partition in kind is when the property can easily be divided, without affecting its value. A large undeveloped piece of land, for example, could be divided into smaller parcels. Partition in kind is more common for developed properties such as commercial or residential buildings. This is because dividing them would be difficult or reduce their value.
- Partition by Sale – When partitioning in kind is impossible or not practical, a court can order a division by sale. In this case, the property will be sold and the proceeds divided among co-owners based on their ownership share. In cases where it would be difficult to divide the property, or if the parties are more interested in a monetary settlement than owning part of the property divided, partition by sale may be the most common option.
Partition: The legal process
When one or more coowners bring a partition case to court, the legal process begins. This process includes several steps.
- Partition Action Filing: A co-owner must initiate a division by filing a lawsuit at the appropriate court. This is usually the court where the property is situated. The lawsuit names all co-owners and asks the court to order the division or sale of the property.
- After filing the lawsuit the plaintiff will need to serve the other owners with a copy. They will also receive a summons for court. The proper service of process will ensure that all parties have the opportunity to respond and are aware of any legal action.
- Response by Defendants : The defendants are entitled to respond to a partition action. The defendants can accept the partition or propose an alternative. They can also contest it. In some cases defendants will argue that a division in kind or sale is better than a partial partition.
- A commissioner or referee may be appointed by the court if it determines a division is necessary. This person is responsible for evaluating and determining the value of the property as well as recommending the most appropriate method of division (in kind or through sale). The court must approve the commissioner’s report.
- Hearing in Court and Order: A hearing will be held by the court to examine the report of the commissioner and any objections raised by the parties. The court will make a decision based on the evidence presented and the arguments made. It may approve the partition-in-kind or order the sale. If the court orders the sale of the property, it will usually set the conditions and terms for the sale. This includes the minimum price, and how the property is to be marketed.
- Execution: The court’s order is followed by the execution of the partition. When a court orders a partition-in-kind, the property will be divided in accordance with the instructions of the court, and each coowner will receive their portion. A partition by sale is when the property is sold and the proceeds are divided among co-owners according to their ownership shares.
- Distribution of Proceeds. If the property has been sold, any outstanding debts and liens are covered first. The remaining funds will be distributed among the co-owners in accordance with their ownership interest.
Factors influencing the court’s decision
There are several factors that can influence a court’s decision to order a sale or if he will order a partition by kind:
- Feasibility: The court will determine if the property is able to be divided without reducing its value. A single-family house may not be able to be divided into multiple units, which makes a sale more probable.
- The court will order a sales if dividing the property significantly decreases its value or makes it unusable. If a small piece of land is divided, the result could be plots too small to sell or develop individually.
- The court will consider the preferences of co-owners. The court will likely approve a sale of the property if all parties are in agreement. If there is disagreement between the parties, the court will consider the arguments and evidence that each side has presented.
- Economic Impact: The court can consider the economic impact a separation. If the property has a high mortgage or selling it would result in a more equitable division of assets, for example, the court might favor a sale.
Alternatives to Partition
It’s in the co-owners’ best interest to look for alternatives to litigation before resorting to it. Alternatives include:
- Negotiated Settlement: Co-owners can negotiate a settlement allowing one or more parties the option to purchase the other, thus avoiding the necessity for a partition.
- Mediation: A neutral third-party helps co-owners to reach an agreement that is acceptable for both parties. Mediation is a cost-effective and less adversarial way to resolve disputes.
- Co-Ownership Contract: If co-owners intend to own the property together in the future, they can create a coownership contract that details each party’s rights, responsibilities and procedures for resolving any future disputes.
Partitioning is a legal process which allows co-owners of real estate to settle disputes and divide their property fairly. The process, whether it is a sale or a division in kind, ensures that all co-owners receive their fair share. Co-owners are advised to consider all options before taking legal action, such as negotiation and mediation. Understanding the legal system and factors that affect the court’s decisions can help co-owners navigate through the partition process effectively and achieve a resolution which meets their needs.
This article was written by a Bonardi & Uzdavinis professional. Bonardi & Uzdavinis LLP, a boutique full-service law firm, provides its clients with a variety of legal representation. Our main areas of practice are real property attorney tampa, probate, commercial litigation, personal injury and construction. Contact us for a free case evaluation if you need a personal injury or real estate attorney in Tampa Bay.
