Many states often resolve disputes concerning jointly owned property through partition. For example, when two co-owners of a property cannot agree on certain matters, the court may force the property to be sold. Subsequently, the co-owners receive their share of the property sale proceeds based on their ownership percentages. This is known as a petition for partition.
This blog describes various aspects of the petition for partition process. If you have questions about your property, speak to a Sebastian real estate attorney today.
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What Is A Petition For Partition?
A petition for partition occurs when two or more property owners cannot agree on what to do with it. For instance, one owner may want to sell, and the other wants to rent. If the parties cannot reach an agreement, filing a petition for partition becomes an option to compel the sale of the property. This situation may arise during a failed business partnership or divorce. Partition eliminates a concurrent interest in the property so that each owner can enjoy their part separately.
Most petitions for partition end in two ways:
- The court forces the sale of the property in a private sale or auction. The co-owners receive an equal share of the proceeds from the sale.
- The court gives ownership to one party and orders them to buy out the other.
- These cases usually end up in a court-ordered sale of the property. Note that a partition differs from related lawsuits, such as ejectment or quiet title.
Who Can File A Petition for Partition?
Several types of property co-owners can file a petition for partition:
In each of these, if the real property is a home, it is owned as a whole. This means there are no rooms that are considered off-limits. If someone files a lawsuit, the court will decide if the property can be divided physically between the parties.
How Petition For Partition Works
Many states have laws that provide the co-owner of real property with a right to partition their home or property in a forced sale by the court. The court must partition the property even if only one owner filed a petition for partition. The court has no discretion or wiggle room to deny ordering the sale. The court will have to order that the property be sold and partitioned. Partitioned may be referred to in some states as a forced sale. Note that partition only involves real property, not personal property.
If the property is a residential home, the court will direct its sale, as splitting it in half is not feasible. Subsequently, divide the proceeds among the owners based on their ownership percentages. If the property is a piece of land that can be split, such as 100 acres of farmland, the court needs to employ professionals to decide how to divide the land fairly. This is called 'division in kind.'
How To File A Petition For Partition
To file a petition for a partition lawsuit, you need to understand your state's partition laws. This is a time to talk to a real estate attorney who will ensure you file the action correctly. Here's how the partition process operates:
- Initiate the petition to partition action by filing the lawsuit in a court with jurisdiction over the property. Include all co-owners' names in the action and file a default notice.
- The judge will issue an interlocutory judgment: The court will decide that one of the owners has a right to partition. Upon establishing the right, the judge issues an interlocutory judgment. This action states each property owner's interest in the property. It also dictates the property's partitioning and determines the division method.
- Appoint a partition referee: The court must appoint a referee who oversees the action, ensures fair execution, and respects the rights of all owners. Everyone with ownership rights must pay for the referee's legal fees.
- Reaching an agreement: A resolution can be without a lawsuit if the owners cooperate. Your attorney can work out a partition agreement in negotiations without going to court. If the parties cannot reach an agreement, the court will decide.
Three Kinds of Petition For Partition Lawsuits
There are three main types of petitions for partition actions:
- Partition in kind: This is also known as an actual partition. It occurs when the owners come together, and the court divides the asset into equitable shares. It means that every owner gets a share equal to their interest in the property. This type of partition is usually for a property that is large enough so that each owner has their plot.
- Partition by sale: This is also called partition by appraisal and is the most common type. It occurs when the asset is sold at an auction or by sale for the fair market value. Allocate proceeds to the owners based on their percentage of ownership. A sale usually happens when dividing the property is challenging. Or, the owners do not get along and don't want to have pieces of property near each other.
- Partition by allotment: In this type, one person gets all ownership and must buy out the others. This doesn't happen often and isn't possible in many cases. Partition by allotment often happens in an estate case, when several siblings are given partial ownership in the family homestead. If one of the siblings wants to live there, that party has the right to buy the others out.
Can You Stop A Petition For Partition?
There are situations where one or more of the property owners may oppose the partition process. Is it possible to stop the partition process? Halting the partition process is challenging, requiring a nuanced understanding of the necessary steps. Halting most partition cases is typically not possible.
Coercion or fraud is the only thing that generally stops a partition process. If any co-owners committed fraud or made threats to influence the case and you have evidence, you can have grounds to stop the action. But fraud and coercion are rare, and the cases where these arguments will be effective are limited. However, a real estate attorney can offer support in contesting the partition process through various means.
Ways To Stop A Petition For Partition
In many cases, it may be easier to stop a petition for partition that has already started. Many attorneys say it is more common to fight a partition successfully once the trial starts. There are ways to stall or prevent the partition using the following methods. Successfully stopping every case is not guaranteed, but using these tactics can increase your chances:
Go Over Contractual Agreements
Purchasing real estate means a large pile of paperwork, which is how it should be. After all, much is at stake with every real estate purchase, and most sale documents offer a paper trial of contingencies, transactions, and other matters related to the real estate transfer. However, it is common for pending joint owners of the property to add documents that can protect their interests.
For example, contractual agreements are common when two or more owners agree to buy a property. The contractual agreement may state that partition isn't allowed, or at least not in a specific timeframe. Some real estate contracts may mandate arbitration or mediation to resolve any issues over ownership. If owners sign this type of agreement, they might not partition the property.
Sell Your Share To Another Owner
Another way to deal with a partition action from selling the home on the open market is to sell your portion to another co-owner. Doing this will prevent the property from being sold to another party. While you might not have a stake in the property anymore, at least it was never sold by the court. Also, the other owner or owners will retain ownership.
Get A Buyout
If you want to keep ownership of the property, you can try to buy out the other owners. Offering to purchase another owner's portion will stop the court from selling the asset. Rather, the other owner or owners will sell their stakes to you at market value. Some property owners who buy out others can do it to hold onto the property. Others may want additional time to repair the house and sell it later. In either case, you can prevent a partition by offering to purchase other owners' equity.
What Are Alternative Defenses For A Petition For Partition?
Partition actions aren't easy to stop. Except for evidence of fraud or outside influence, it is difficult to stop once the action is underway. Stalling or preventing the action with a contract or certain types of transactions between the owners is possible. But if you want to defend against a petition for partition in court, these are a few options:
Question the Plaintiff's Title Interest
To get a partition approved, a property owner must be a co-owner and have equitable interest. So, the first thing you should do is challenge their title interest claim. Perhaps alterations have been made to the will, or someone has questioned the right of survivorship. If they don't have ownership, there is no case.
Ask For A Waiver Of The Right to Partition
It is rare but possible that the owner waived their right to partition when they bought the house. If the owner waives their right, they don't have a case.
Lower Costs If Possible
You can avoid some costs if you cannot stop the partition. There are ways to reduce costs, whether getting on the judge's good side or being compensated for attorney's fees.
Refinance
Some co-owners may choose to refinance the property, acquiring the interests of the other parties through a buyout.
Prove The Owner's Offsets Are More Than Their Equity
Occasionally, a plaintiff may discover that offsets are more than the equity they seek. If this proves true, the court might not allow the case to go forward, considering the disproportional nature of the offsets.
Ask For A Partition In Kind
A partition in kind will split the real property into shares of equal value. While dividing a house is impossible, handling land with a partisan in-kind agreement is common. This means the land is not sold but is shared equitably between the owners.
Ensure Your Property Wishes Are Heeded
Petitions for partition are a complex subject for co-owners. The right to partition real property suggests a disagreement or division among the owners. If you are in one of these disputes, you may need to know how to end the petition for partition. Ensure you update your estate plan to avoid even thinking about a petition for partition.
When Do Petitions For Partition Actions Occur?
Many of these cases happen when a single property owner passes away. In their will, they grant property ownership to multiple owners, such as three adult children. Each may not share the same goals for the property. Perhaps one wants to sell, one wants to rent it, and the other wants to live there. If they cannot agree on dealing with the property, there can be a petition for partition action.
Another common situation is when a couple purchases a property and owns it together but never marries. Then, the couple breaks up and can't agree on how to use or dispose of the property.
Speak To A Real Estate Attorney Today
If you encounter a situation where the owners may need to partition the property, you should not attempt to handle the matter alone. Consulting with an experienced real estate attorney specializing in partition agreements ensures the proper representation of your rights. Speak to a real estate attorney in your area today for more information.
If you want a real estate attorney to review your case, you should bring all copies associated with the property's ownership, such as wills, deeds, and other agreements. The attorney also will want to see documents that show all income and expenses related to the real property.