Conflicts can arise when multiple people share ownership of a property. Co-owners who cannot agree whether to sell or keep the property is a common situation. In these cases, there are usually two legal remedies: a Partition by Sale and a Partition in Kind. It is important for property owners to understand the differences between the two methods. What you should know
1. Understanding Partition in Kind
The legal process is to divide the property in kind among co-owners. Courts prefer this method because it allows the co-owners to keep their respective portions of the property, rather than forcing them to sell. Partitions in kind have the following key characteristics:
- Physical division: Property is divided into smaller parcels. Each co-owner gets a share of the property that’s equal to their ownership stake.
- Preservation Ownership: Using this method, co-owners can retain ownership of an item of property. This is important if it has sentimental value to them or they have specific plans on how to use it.
- Challenges with Equitability: The division of the property must be fair and equal, which is not always easy depending on its nature. It may be easier to divide a large piece of land, but more difficult to split up a home or small lot that is not worth less.
When Is Partition In Kind Appropriate It is appropriate to divide property in a manner that allows each owner to receive a portion of the value of their ownership interest. This is most common in cases of agricultural land and large parcels that are not developed, where physical division can be achieved.
Limitations to Partitioning in Kind: Although Partitioning in Kind is seen as an equitable solution, it does have its limitations. This method may not be appropriate if the property can’t be divided without a significant loss of value, or if it would create impractical or inaccessible parcels. In these cases, the court might consider a Partition by Sale.
2. Understanding Partitioning by Sale
Partition by sale involves selling the whole property and dividing proceeds between co-owners based on their ownership shares. Partition by Sale is used when Partition In Kind is not practical or when the co-owners can’t agree on how they want to divide their property. Partition by sale has the following key characteristics:
- Sale Property: In this case, the entire property is being sold. This can be done at an auction or a private sale organized by the court.
- Distribution of Proceeds: Profits from the sale will be distributed to co-owners according to their ownership interest. Each owner receives their share of property value in cash.
- Practical solution: A partition by sale is considered when it’s impossible to physically divide the property without significant loss of value, or when doing so would lead to inequitable share distribution.
When Is Partition By Sale Appropriate It is appropriate to partition the property by sale when it is not practical or would cause a substantial loss in value. This method is used when co-owners are unable to agree on a division, or when the property has a single indivisible unit such as a home or small commercial building.
Limitations to Partition By Sale: Partition by sale has the disadvantage of forcing all owners to sell their property, even though some of them would rather keep it. The property may not be sold at the highest price possible if it is sold in a court-ordered sale. This could reduce the value of the property for all co-owners.
3. Legal Considerations and Process
Property owners have to navigate legal considerations and processes when pursuing a Partition by Sales or Partition by Kind.
- Filing Partition Actions: In either case, the first step is to file a lawsuit for partition in the court of jurisdiction. It is often done when co-owners are unable to agree on the division or management of the property.
- Role of the Court: To determine the most fair solution, the court will look at the details of the property as well as the co-ownership agreement. The court can appoint commissioners in the case of Partition by Kind to determine how the property should be divided. In the case of Partition by Sale the court can supervise the sale process in order to ensure fairness.
- Fees and Costs: Both procedures involve legal fees, court expenses, and possibly appraisal or survey costs. This is especially true in Partition in Kind situations. These costs can be deducted from sale proceeds, or apportioned between co-owners.
4. Factors influencing the Court’s decision
There are several factors that influence the court’s decision to order a Partition of Kind or Partition through Sale.
- Divisibility: The main consideration is whether or not the property can physically be divided without significant loss in value or usability.
- Economic impact: A court will determine whether a Partition in Kind results in a significant decrease in the overall value of the property compared to selling it.
- Fairness A court will ensure that the division of sale is fair for all parties. A court may lean towards a sale if a physical division would unfairly disadvantage one party.
5. Alternatives to Partition Actions
Co-owners might want to look at alternative solutions before pursuing a divorce action.
- Voluntary sale: The parties agree to sell their property and split the proceeds without the intervention of a court. This is a quicker and cheaper alternative to a court ordered sale.
- Buyout A co-owner purchases the other(s) and allows them to keep ownership of the property. This solution involves agreement on both the value of the property and the terms for the buyout.
- Mediation The co-owners may engage in mediation as a way to settle disputes and reach an agreement about how to divide the property or sell it.
The conclusion of the article is:
Co-owners who are unable to agree on the division or management of their property can use Partition by Sales and Partition in kind as legal remedies. It is important to understand the differences between both methods in order to make informed decisions. Partition in Kind maintains ownership by physically dividing the property, while Partition by Sale turns the property into money by selling it and splitting the proceeds. The best method depends on the particulars of the property, as well as the preferences of co-owners. If an agreement is not possible, the court will determine the most fair solution according to the characteristics of the property and the interests all parties.
This post was written by a professional at Bonardi & Uzdavinis, LLP. Bonardi & Uzdavinis, LLP is a boutique, full service law firm providing its clients with a wide range of representation. Our primary areas of practice include tampa foreclosure lawyer, probate, personal injury, construction, and commercial litigation. If you are looking for a real estate attorney or personal injury attorney in Tampa Bay contact us today for a case evaluation today!
