Partition (law)

Last updated

A partition is a term used in the law of real property to describe an act, by a court order or otherwise, to divide up a concurrent estate into separate portions representing the proportionate interests of the owners of property. [1] It is sometimes described as a forced sale. Under the common law, any owner of property who owns an undivided concurrent interest in land can seek such a division. In some cases, the parties agree to a specific division of the land; if they are unable to do so, the court will determine an appropriate division. A sole owner, or several owners, of a piece of land may partition their land by entering a deed poll (sometimes referred to as "carving out").

Contents

Why forced sales occur

Forced sales generally occur because owners of property are unable to agree upon certain aspects of the ownership. The owners may disagree on how to use the property, the amount of money to invest into the property, on their right to occupy and use the whole of the property. If the parties cannot come to an agreement, the case moves to court through a petition to partition action. [2]

Property may be owned by more than one person either as joint tenants, tenants in common, and in some states tenants by the entirety. [3] The choice of which tenancy to enter into is made by the parties at the time of purchase. With each type of tenancy, each owner has the right to occupy the whole. That means that owners are not allowed to designate certain rooms as their own, but each element of the property is enjoyed fully by all parties.

Types of partition

There are three kinds of partition which can be awarded by court: partition in kind, partition by allotment, and partition by sale. [4]

  1. A partition in kind is a division of the property itself among the co-owners.
  2. In a partition by allotment, which is not available in all jurisdictions, the court awards full ownership of the land to a single owner or subset of owners, and orders them to pay the person or persons divested of ownership for the interest awarded.
  3. Partition by sale constitutes a forced sale of the land, followed by division of the profits thus realized among the tenants. Generally, the court is supposed to order a partition sale only if the land cannot be physically divided, although this determination often rests on whether the economic value of the divided pieces is less in the aggregate than the value of the parcel as a single piece. See Delfino v. Vealencis, 436 A.2d 27 (Conn. 1980).

A provision in a deed completely prohibiting partition will not be given effect, but courts will enforce a provision that temporarily restricts partition, as long as the restriction is reasonable.

Partition procedure

A party seeking a partition must file a partition lawsuit. State codes generally favor physical division (partition in-kind) of the affected property(s) over sale (partition by sale as a unit), particularly if a tenant would be displaced from his or her primary residence by a sale. If in-kind partition is feasible, the property(s) will be divided proportionally. Where small differences in such division are unavoidable, cash compensation for the difference(s) will be awarded to maintain proportionality. If the property(s) cannot be divided and allocated to give each tenant a portion without spoiling the whole, the court will order a sale. A special master (referee) is commonly appointed by the court to execute the partition process. The referee is responsible only to the court, and the referee is limited only by the court's instructions, and applicable state codes. For an in-kind partition, the referee will cause deeds to the adjusted property(s) to be prepared. Where easements are required for access, the referee will employ professionals (engineers, surveyors and other experts) as required to describe the easement(s). The conveyance deeds for the adjusted property(s) and the easement deed(s) will be recorded simultaneously. Often, "referee's deeds" (deeds signed by the referee, in the owner's stead) may be employed.

Tenants in common partitions vs. tenants with rights of survivorship partitions

Tenants in common (TIC) deeds may or may not be taken in equal shares, but a joint tenants with rights of survivorship (JTWROS) deed must always be taken in equal shares unless specifically and clearly indicated otherwise in the deed language. Therefore, a partition action for those two types of deeds will vary.

When a JTWROS property is partitioned, the proceeds must be divided equally among tenants without regard to contribution to purchase price since a JTWROS deed is always taken in equal shares. So with a JTWROS, contributions to purchase price is not an issue during partition. Otherwise, the premise of a JTWROS deed would be invalid and its purpose would be defeated. On the other hand, when a TIC property is partitioned, courts may be at liberty to consider unequal contributions to purchase price and adjust the tenants' distributions accordingly.

In either partition situation, tenants may request credits for unequal contributions to expenses incurred after taking deed to the property. Such credits may cover utility and maintenance expenses, and are allocated according to shares. Credits for improvements to the property may be granted if the improvements actually increased the value of the property.[ citation needed ]

Statutory variations

Ontario, Canada

The Ontario Partition Act, R.S.O. 1990, c. P.4, states:

"3. (1) Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested. R.S.O. 1990, c. P.4, s. 3 (1)."

Florida, USA

Florida provides for partition actions by statute, Chapter 64, which basically provides that any co-owner of real estate may seek partition. [5] In Florida, there are basically no defenses to a partition action, other than if the parties have agreed not to partition the real estate.

Pennsylvania, USA

Property divided under Rule 1560(a) shall be awarded to the parties according to their respective interests.

A master who is appointed by the court shall make such examinations and hold such hearings as may be necessary, giving reasonable notice thereof. The master may employ appraisers and, with the authorization of the court, such other experts as are necessary to enable the master to perform his or her duties. [6]

The court shall permit the shares of any two or more co-tenants to remain undivided between them if they so elect by writing filed within such time as the court or master shall direct.

Parties defendant owning a majority in value of the property may object in writing to any sale, requesting that the property be awarded to them at its valuation fixed by the court and that their interests in the same remain undivided. Upon such request the entire property shall be awarded to the parties objecting to sale, as tenants in common, subject to payment to the parties desiring partition and sale of the amounts of their respective interests based upon the valuation. The amounts due the parties shall be charged as liens upon the property, to be paid in such manner and time as the court shall direct.

Pennsylvania Partition Example

In D’Arcy v. Buckley, 71 Bucks Co. L. Rep. 167 (1997), two people purchased property as joint tenants with right of survivorship. The plaintiff contributed five times more than the defendant toward the purchase price. In a partition action, the plaintiff sought credit for the full amount of his superior contributions. The Court held that, in the absence of fraud, the working of the deed operated to convey a one-half interest to each of the two joint tenants. The decision relies the authorities of Masgai v. Masgai, 460 Pa. 453, 333 A.2d 861 (1975), and DeLoatch v. Murphy, 369 Pa. Super. 255, 535 A.2d 146 (1987). The plaintiff argued, to no avail, that he did not intend to make a lifetime gift to defendant.

California, USA

Partition in kind is favored, Cal. Civ. Proc. Code § 872.810, [7] but partition by sale is allowed if a partition by sale maximizes the market value of the subject property(s).

In many cases, a two-step process may be required: (1) a trial, [8] during which oral and documentary evidence is heard, and either affirms or denies the right of the moving party to effect a partition of the subject property(s), and, if affirmed, results in an interlocutory judgment (sometimes called a "first interlocutory judgment"), and (2) particularly in a contested partition, an evidentiary hearing (also a trial), usually after the property(s) have been appraised by experts, and during which trial additional oral and documentary evidence is heard, the property(s) are ordered divided and awarded proportionally where possible, including cash compensation where proportional division is impractical or impossible (sometimes called a "second interlocutory judgment"). The division usually requires the employment of experts such as engineers and surveyors, and the preparation of special reports (which include conveyance deeds and easement deeds). As a final act, the court, in a hearing (not a trial), will accept the special reports and order that these be executed by a title company, which will also effectuate "recordation" of the conveyance and easement deeds (any cash compensation due any of the parties will also be effectuated within the escrow).

Once the court has determined that real property is to be partitioned, the court is authorized to appoint a Partition Referee for the purpose of handling the actual partition of the property. The Court’s interlocutory judgment may order either division of the property or sale of the property (with later division of the sale proceeds). In either case, a Partition Referee is appointed to carry the interlocutory judgment into effect. The Partition Referee may be authorized to employ attorneys, surveyors, real estate broker, engineers, and the like. The sale by the Partition Referee can be made by either public auction or private sale, whichever is more beneficial to the parties. The most common method of sale of real property is by private sale with the assistance of a real estate broker for advertising the property. Sales by Partition Referees must be confirmed by the court before becoming final. At the confirmation hearing, the court may confirm the proposed sale, reject the proposed sale, or allow higher bids for the property through an over-bidding process. The Partition Referee is given authority to execute documents as required to conclude a sale that is confirmed by the Court.

Uniform Partition of Heirs Property Act

The Uniform Partition of Heirs Property Act (UPHPA), completed by the Uniform Law Commission in 2010, contains legal protections for heirs’ property owners designed to address partition sales. The UPHPA restructures the way partition sales occur in states that adopt the act, and generally includes three major reforms to partition law: [9]

  1. If a co-owner brings a partition action in court, the court must provide an opportunity to the other co-owners to buy out the co-owner who brought the action. The value of the share of the co-owner who brought the partition action is determined by multiplying the fair market value of the property as determined by an appraiser by the person’s percentage of interest in the property.
  2. If there is no buyout, then the law provides a preference for the court to order a partition in kind and divide the property, rather than order a sale. The law requires courts to take into account factors other than economic, such as the value of family heritage, historical value of the property, or the impact of the sale on those living on the property.
  3. If a partition in kind is not ordered, the UPHPA requires the court to sell the property at a market sale, not at an auction sale, and specifies a process for the property to be appraised and sold for its fair market value.

As of January 2023, 22 states and the Virgin Islands have passed the UPHPA, including Alabama, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Iowa, Maryland, Mississippi, Missouri, Montana, Nevada, New Mexico, New York, South Carolina, Texas, Utah, and Virginia. [10] Effective January 1, 2023, California became the first state to expand the appraisal buyout process under the Uniform Partition of Heirs Property Act to non-heirs partition actions. The passage of the act in all 50 states could mitigate the impact of partition sales on heirs’ property owners.

Related Research Articles

In property law, title is an intangible construct representing a bundle of rights in (to) a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, possession and title may each be transferred independently of the other. For real property, land registration and recording provide public notice of ownership information.

In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time under common law, whereas the highest possible form of ownership is a "fee simple absolute", which is without limitations on the land's use.

In English common law, fee tail or entail, is a form of trust, established by deed or settlement, that restricts the sale or inheritance of an estate in real property and prevents that property from being sold, devised by will, or otherwise alienated by the tenant-in-possession, and instead causes it to pass automatically, by operation of law, to an heir determined by the settlement deed. The terms fee tail and tailzie are from Medieval Latin feodum talliatum, which means "cut(-short) fee". Fee tail deeds are in contrast to "fee simple" deeds, possessors of which have an unrestricted title to the property, and are empowered to bequeath or dispose of it as they wish. Equivalent legal concepts exist or formerly existed in many other European countries and elsewhere; in Scots law tailzie was codified in the Entail Act 1685.

In common law and statutory law, a life estate is the ownership of immovable property for the duration of a person's life. In legal terms, it is an estate in real property that ends at death, when the property rights may revert to the original owner or to another person. The owner of a life estate is called a "life tenant". The person who will take over the rights upon death is said to have a "remainder" interest and is known as a "remainderman".

This aims to be a complete list of the articles on real estate.

A deed is a legal document that is signed and delivered, especially concerning the ownership of property or legal rights. Specifically, in common law, a deed is any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions, sealed. It is commonly associated with transferring (conveyancing) title to property. The deed has a greater presumption of validity and is less rebuttable than an instrument signed by the party to the deed. A deed can be unilateral or bilateral. Deeds include conveyances, commissions, licenses, patents, diplomas, and conditionally powers of attorney if executed as deeds. The deed is the modern descendant of the medieval charter, and delivery is thought to symbolically replace the ancient ceremony of livery of seisin.

<span class="mw-page-title-main">Foreclosure</span> Legal process where a lender recoups an unpaid loan by forcing the borrower to sell the collateral

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.

<span class="mw-page-title-main">Statute of Frauds</span> United Kingdom legislation

The Statute of Frauds (1677) was an act of the Parliament of England. It required that certain types of contracts, wills, and grants, and assignment or surrender of leases or interest in real property must be in writing and signed to avoid fraud on the court by perjury and subornation of perjury. It also required that documents of the courts be signed and dated.

A real estate contract is a contract between parties for the purchase and sale, exchange, or other conveyance of real estate. The sale of land is governed by the laws and practices of the jurisdiction in which the land is located. Real estate called leasehold estate is actually a rental of real property such as an apartment, and leases cover such rentals since they typically do not result in recordable deeds. Freehold conveyances of real estate are covered by real estate contracts, including conveying fee simple title, life estates, remainder estates, and freehold easements. Real estate contracts are typically bilateral contracts and should have the legal requirements specified by contract law in general and should also be in writing to be enforceable.

In property law, a concurrent estate or co-tenancy is any of various ways in which property is owned by more than one person at a time. If more than one person owns the same property, they are commonly referred to as co-owners. Legal terminology for co-owners of real estate is either co-tenants or joint tenants, with the latter phrase signifying a right of survivorship. Most common law jurisdictions recognize tenancies in common and joint tenancies.

A covenant, in its most general sense and historical sense, is a solemn promise to engage in or refrain from a specified action. Under historical English common law, a covenant was distinguished from an ordinary contract by the presence of a seal. Because the presence of a seal indicated an unusual solemnity in the promises made in a covenant, the common law would enforce a covenant even in the absence of consideration. In United States contract law, an implied covenant of good faith is presumed.

An action to quiet title is a lawsuit brought in a court having jurisdiction over property disputes, in order to establish a party's title to real property, or personal property having a title, of against anyone and everyone, and thus "quiet" any challenges or claims to the title.

English property law is the law of acquisition, sharing and protection of valuable assets in England and Wales. While part of the United Kingdom, many elements of Scots property law are different. In England, property law encompasses four main topics:

The vast majority of states in the United States employ a system of recording legal instruments that affect the title of real estate as the exclusive means for publicly documenting land titles and interests. The record title system differs significantly from land registration systems, such as the Torrens system, that have been adopted in a few states. The principal difference is that the recording system does not determine who owns the title or interest involved, which is ultimately established through litigation in the courts. The system provides a framework for determining who the law will protect in relation to those titles and interests when a dispute arises.

This collection of lists of law topics collects the names of topics related to law. Everything related to law, even quite remotely, should be included on the alphabetical list, and on the appropriate topic lists. All links on topical lists should also appear in the main alphabetical listing. The process of creating lists is ongoing – these lists are neither complete nor up-to-date – if you see an article that should be listed but is not, please update the lists accordingly. You may also want to include Wikiproject Law talk page banners on the relevant pages.

Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555 (1935), was a decision by the Supreme Court of the United States that ruled the Frazier–Lemke Farm Bankruptcy Act unconstitutional in violation of the Fifth Amendment. This unanimous decision was one of the Court's many rulings that overturned President Roosevelt's New Deal.

<span class="mw-page-title-main">Philipse Patent</span> British royal patent for land on the Hudson River

The Philipse Patent was a British royal patent for a large tract of land on the east bank of the Hudson River about 50 miles north of New York City. It was purchased in 1697 by Adolphus Philipse, a wealthy landowner of Dutch descent in the Province of New York, and in time became today's Putnam County.

<span class="mw-page-title-main">Government auction</span> Auction held for state-owned or state-sold property

A government auction or a public auction is an auction held on behalf of a government in which the property to be auctioned is either property owned by the government or property which is sold under the authority of a court of law or a government agency with similar authority.

<span class="mw-page-title-main">Real property</span> Legal term; property consisting of land and the buildings on it

In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, refers to parcels of land and any associated structures which are the property of a person. For a structure to be considered part of the real property, it must be integrated with or affixed to the land. This includes crops, buildings, machinery, wells, dams, ponds, mines, canals, and roads. The term is historic, arising from the now-discontinued form of action, which distinguished between real property disputes and personal property disputes. Personal property, or personalty, was, and continues to be, all property that is not real property.

<span class="mw-page-title-main">Heir property</span>

Heirs property, or heirs' property, refers to property that is passed between generations of family members without the involvement of local probate courts, without a will or formal estate strategy. Heir property is commonly viewed as an unstable form of ownership, since co-owners often have limited rights over the property.

References

  1. ↑ "PARTITION Definition & Meaning - Black's Law Dictionary". The Law Dictionary. 2011-11-04. Retrieved 2023-07-29.
  2. ↑ Mitchell, Thomas; Malpezzi, Stephen; Green, Richard (2009). "Forced Sale Risk: Class, Race, and the Double Discount". Florida State University Law Review. 37: 589.
  3. ↑ Hinkel, Daniel F. (1991). Practical Real Estate Law. Stamford, CT: Cengage Learning. p. 23. ISBN   9781285965741.
  4. ↑ Kuperman, Zachary D. (2011). "Cutting the Baby in Half: An Economic Critique of Indivisible Resource Partition". Brooklyn Law Review. 7 (11): 265.
  5. ↑ Florida Partition Statute.
  6. ↑ The Pennsylvania Code
  7. ↑ "California Legal Reference".
  8. ↑ As partition actions are "equitable" in nature, only court trials are employed; i.e., jury trials are not permitted.
  9. ↑ "Heirs' Property - Farmland Access Legal Toolkit". farmlandaccess.org. 2021-02-08. Retrieved 2023-03-14.
  10. ↑ "Partition of Heirs Property Act". Uniform Law Commission. Retrieved 2021-01-24.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.