Real Estate Ownership Divorce: The Right to Partition
/How does a property owner divide or force the sale of real estate? All joint owners of real estate, except for property held by spouses as "tenants by the entirety," have the right to sever their ownership interest, request physical division of the land and/or force liquidation of the property. In Massachusetts, M.G.L. ch. 241 s. 1 permits owners of real estate who own an undivided interest in the property to request that the Massachusetts Land Court or Probate & Family Court order the partition the property. In other words, property ownership in Massachusetts is not intended to ensnare and force unwilling participants in continued joint ownership arrangements.
The partition statute has few exceptions and provides joint owners of real estate a "way out" of a ownership arrangement. This may be a useful tool to property owners who no longer wish to be part of an informal business partnership; separated partners and co-habitants; individuals who have inherited property from deceased relatives; or joint property owners who are not "pulling their weight" in relation to maintenance, insurance, property taxes, and upkeep. In these instances, a property owner may file a petition for partition, which is an extreme remedy after informal efforts have failed to amicably divide or separate the ownership interests.
In most partition cases that involve property in the well developed areas of Eastern Massachusetts, some type of building (single or multi-family houses, or condominium) and land, in the cases of houses, will be involved. In some cases, if undeveloped land is subject to a partition action it is possible to request that a Court fairly divide the land between the owners, and then each owner will be free to sell, develop, transfer, encumber, and otherwise take any action that a owner in full possession may do. In other cases, for example, that involve a single family home that is occupied by one or more of the owners, it is likely that a partition action will result in a court order to sell the property on the retail real estate market. A real estate broker will need to be retained; the property will be marketed and sold to the highest offeror; and the proceeds will be divided according to the Court's order. There is an option to hold a public auction for the property, however, this is unlikely to maximize the sale price on the open retail market. Or in some cases, property owners often enter into a buyout arrangement where one owner will purchase the interest of the other in the context of a private sale.
The partition of real estate has some drawbacks in terms of the financial cost of litigation as well as the infighting over the division of financial proceeds that may result. The sale of the property must also provide for the payment of all liens of records, including mortgages, executions, property and income tax liens, and other of record. This will, of course, reduce the amount of net proceeds after the sale in addition to reductions for real estate broker commission, legal fees, tax stamps, recording fees, and other closing costs. Despite these costs, many property owners may wish to seek a partition if there is no other way out of the joint ownership arrangement.
The Law Office of Stefan Cencarik, PLLC of Lynnfield, Massachusetts maintains a comprehensive real estate practice from representation of buyers and sellers of residential and commercial property; resolution and litigation of issues with real estate; representation of commercial landlords and tenants; and condominium associations. If you have any questions about these matters, please feel free to contact one of our Greater Boston real estate lawyers at 781-463-6063. We provide a free initial consultation, and are responsive to the deadlines and timetables of any new matter.