Partitioning of Jointly Owned Property

What should be done when two or more owners of real estate disagree on whether to sell a property? Disagreement over whether to liquidate a property can become a major dispute. Co-owner disputes often arise between heirs to an family property that was transferred into the name of the heirs after the death of the loved one. It is not uncommon for the heirs to later disagree about what do to with the property a long time after the transfer is made.

Any co-owner has a right to seek partition and sale through a partition action. Partition actions often cause the uncooperative party to agree to sell because the cost of a protracted partition case can be placed upon the non-cooperative party.

There are several other situations where co-owners cannot agree on the use of a property. These situations often call for a partition action in order to severe the interests in the property:

• properties co-owned by a living person and a now-deceased person’s estate
• co-investors/ developers who jointly purchased a property but now disagree on whether to rent or sell, except properties titled in the name of a business entity
• a property purchased by two people anticipating marriage but the relationship ended before marriage
• former spouses who kept a property jointly-titled after divorce but later disagreed on its use

Any person who co-owns property with another person has a right to have the property partitioned through the court. Partition can mean a physical dividing, or more often, selling the property and distributing the proceeds. A physical division is not appropriate for most properties. Imagine the problem if the court ordered the division of a one-acre lot containing a single family home – a completely impractical result. For this reason, courts often order liquidation except for easily divisible properties such as farmland.

How exactly to divide the proceeds is usually the heart of the dispute between the co-owners. Proceeds are rarely distributed simply based on ownership percentage. The reason for this is that the disputes leading to partition cases are fueled by one owner’s claim to a larger share than their ownership percentage. Suppose one owner wasted or neglected property, while the other invested substantial funds to improve it. The person who expended funds will want a greater share. Courts will entertain these “equitable” arguments about how to most fairly divide the property under the circumstances.

The good news for co-owners locked in a dispute is that most partition matters are resolved at mediation. A judge will make an initial decision whether the property should be partitioned. Then a person called a special master is appointed to hear arguments about distribution percentages, order appraisals, and more. Cases that go to trial are usually the most serious types of disputes. Partition cases can take a few months to a few years to resolve depending on whether the case settles.

Not all jointly owned property is resolved through partition actions. Properties subject to a marital divorce or a deceased’s will are resolved through divorce court and orphan’s court respectively. Properties that are titled in the name of a business entity are resolved through the entity’s operating agreement and contract principles.

As a probate attorney to estate executors, I help partition properties and obtain court approvals for sale. If you know a co-owner who wants to sell their share of a property, please forward our contact information:

Phone (215) 918-4242

Email info@pennsylvaniaprobatelawfirm.com

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