Joint ownership of property can be a great arrangement when both parties agree on how to manage and use the property. However, disagreements can arise over issues such as maintenance, use of the property, or whether to sell it. When co-owners are no longer on the same page, it may be necessary to take legal action to resolve the dispute.
One of the most common legal solutions in these cases is a partition lawsuit, which allows a court to order the sale of the property and divide the proceeds among the owners. This article will discuss the legal options available to co-owners who can no longer get along, how partition lawsuits work, how proceeds are divided, and how co-owners may be entitled to recoup maintenance costs or be held responsible for preventing access to the property.
Understanding Partition Lawsuits
What Is a Partition Lawsuit?
A partition lawsuitis a legal action filed when co-owners of real estate cannot agree on how to use, maintain, or sell a property. A partition action is typically filed in the county where the property is located and seeks to resolve disputes by ordering the division or sale of the property.
Types of Partition
There are two primary types of partition:
- Partition in Kind:The court physically divides the property between the co-owners. This is most common in large tracts of land, such as farmland, but is rarely practical for residential properties.
- Partition by Sale:If the property cannot be physically divided, the court may order the property to be sold, and the proceeds distributed among the owners.
If the court determines that a partition in kindis not feasible, it will typically order a partition by sale, requiring the property to be sold at market value. The proceeds are then distributed among the co-owners based on their ownership shares.
Division of Proceeds After the Sale
How Proceeds Are Typically Divided
Once the property is sold, the net proceeds are divided among the owners. However, this division is not always a simple 50/50 or proportional split based on ownership percentage. Several factors can affect how the proceeds are distributed, including:
- Each owner’s initial financial contribution to the purchase.
- Any agreement between the owners that specifies how proceeds should be split.
- Adjustments for costs paid by one owner but not the other (e.g., mortgage payments, repairs, taxes).
Recouping Maintenance and Upkeep Costs
If one owner has paid more than their fair share for property maintenance, property taxes, mortgage payments, or necessary repairs, they may be entitled to reimbursement from the sale proceeds. Courts often recognize that one co-owner should not unfairly benefit from another’s financial contributions.
Some reimbursable expenses may include:
- Mortgage payments made by one owner while the other did not contribute.
- Property taxes paid solely by one owner.
- Insurance premiums paid by one owner.
- Costs of necessary repairs or improvements that increased the property’s value.
To recoup these costs, the owner who made the payments must provide evidence, such as:
- Bank statements or receipts for payments made.
- Property tax records.
- Invoices from contractors or repair professionals.
Responsibility for Preventing Access and Lost Rental Value
In some cases, one co-owner may prevent another from using or accessing the property. If a co-owner is excluded or locked out, they may have legal recourse.
What Happens If One Owner Prevents Another from Accessing the Property?
If one co-owner denies the other access to the property, the excluded owner may be entitled to compensation for the lost rental valueof the property. Courts generally hold that all co-owners have equal rights to access and use the property, and a co-owner who excludes another may be responsible for paying a portion of the fair market rental value for the period of exclusion.
For example:
- If one co-owner moves into the property and prevents the other from living there, the owner in possession may be required to compensate the excluded owner.
- If one owner changes the locks or otherwise denies access, they may owe rent equal to their co-owner’s share of the property.
The excluded owner may also request that their share of lost rental value be deducted from the other co-owner’s share of the sale proceeds during a partition lawsuit.
Alternative Solutions to a Partition Lawsuit
Before filing a partition lawsuit, co-owners may want to explore other ways to resolve their dispute:
1. Buyout Agreement
One owner may choose to buy out the other’s share in the property. This option avoids court involvement and allows one owner to retain full ownership. The parties should obtain an appraisal to determine a fair market value.
2. Mediation or Negotiation
Before taking legal action, co-owners may benefit from hiring a mediator to facilitate discussions and reach a mutual agreement on how to handle the property.
3. Selling the Property Voluntarily
If both parties agree that selling is the best option, they can list the property for sale and split the proceeds according to their agreement or financial contributions.
Conclusion
Jointly owning a property can become complicated when co-owners no longer agree on its management. In cases where disputes cannot be resolved, a partition lawsuitcan force the sale of the property and ensure an equitable division of proceeds. Owners who have invested more in maintaining the property may be entitled to reimbursement, while those who prevent their co-owners from accessing the property may be liable for lost rental value.
If you are in a dispute over jointly owned property, consulting with a real estate attorneyat Klein Law Groupcan help you understand your rights and options. Whether through negotiation, a buyout, or legal action, taking the right steps can help you achieve a fair resolution.
