When multiple people have joint ownership in a property, sometimes disagreements happen. Maybe one person wants to keep the property and the other wants to sell, or perhaps their relationship has dissolved and they both want to be able to walk away from a joint asset.
In either case, a partition lawsuit may be the best way to decide how to move forward. Here we'll explore what a partition lawsuit is, how it works, and how it can assist you in severing joint ownership of a property.
What is a partition lawsuit?
A real estate partition lawsuit occurs when two or more people who have an ownership interest in a piece of property have different ideas about what should be done with it. This type of lawsuit most often takes place when dividing an estate between disagreeable family members, during divorce proceedings, or following a soured business partnership.
A partition suit typically ends in one of two ways. Either the court orders a forced sale of the jointly owned property at auction or by private sale and then each owner is given an equal share of the sale proceeds or the court divides the property into pieces and gives each owner an undivided interest in their own separate piece. In rare cases. the court may also award ownership to one person and order them to buy out the others.
However, the latter option usually only occurs in cases where there's a lot of land or acreage that can be divided easily. Partition lawsuits will usually result in a forced sale if the court is responsible for dividing a single residential property or commercial building.
How does a partition suit work?
The exact process for the lawsuit will depend on the partition statute in your state. You may want to consult with a real estate attorney to make sure you're aware of what you can expect before moving forward. That said, in general, most states tend to follow a similar process, so here's an overview of how a partition case might look.
Filing a petition to partition
The first step in a real estate partition is to file a partition action, or a petition to partition. The partition action must be filed in the superior court where the property is located, and all of the co-owners must be named, as well as anyone who has an existing or future interest in the property, like a lien holder, for example
Typically, a "lis pendens," or default notice, is also filed at the same time as the petition. This document simply notifies everyone who has been named in the partition action that the lawsuit is being filed. The lis pendens is kept on record in the recorder's office in the county where the property is located.
Issuing an interlocutory judgment
The first thing the court will do once a partition action is filed is verify that the plaintiff actually has the right to partition the property. After that has been verified, the superior court will move forward with issuing an interlocutory judgment. This judgment sets forth each person's interest in the property, orders that the property be partitioned, and determines the manner in which it will be partitioned.
Appointing a partition referee
After the judgment has been issued, as long as all parties consent, the court will appoint a partition referee to oversee the division of the property. While hiring a referee is often the best course of action in situations where the partition case is contentious, bear in mind that the co-owners are responsible for paying the referee's legal fees. Like attorney's fees, they are billed hourly, so this solution can become costly.