There are many provisions in real estate law that are used to address specific situations that are unusual in terms of the average real estate market.

The partition lawsuit is one of these – it’s a legal remedy to resolve a situation where there may be conflict as to the ownership interest and future of the property.

What is a partition lawsuit?

A partition lawsuit in real estate involves multiple parties agreeing to proceed in a certain way with split ownership of a property.

Far and away the most common resolution in a partition lawsuit is that all of the parties split the sale proceeds of the property equally. If there are two parties, that means splitting the proceeds 50-50. If there are three parties, each gets one third, etc.

Maintenance and Auxiliary Costs

Of course, selling real estate doesn’t happen in the blink of an eye. There’s always a timeline, and in most cases, that timeline involves multiple months of the calendar year, if not multiple years. There will be the process of evaluating any deficiencies on the property, finding a buyer, and proceeding toward settlement.

The partition lawsuit, then, has to contemplate the maintenance costs, and that’s one aspect of crafting these kinds of agreements. Many of the closing costs can simply be deducted from the sale proceeds, but other kinds of costs may have to be dealt with on a case by case basis. 

Common Partition Lawsuit Scenarios

One of the most common kinds of situations where a partition lawsuit may apply is when multiple individuals inherit the same property. It’s almost always impractical to split that property up in any actual way, so the property must be sold, and the proceeds shared equally.

Divorce is another situation where a 50-50 split on real estate in a partition suit is not unusual.

There may be other kinds of situations where joint business partnerships dissolve or multiple people try to advance their interest in a property – these can also be appropriate for the use of a partition action.

Alternatives to Selling and Splitting Property Value

One alternative to the usual partition lawsuit method of selling the property and splitting the proceeds is when one or more of the parties buy the other parties out. In the 50-50 divorce case, one partner would give the other partner half of the value of the property, and take the title himself or herself through a dedicated legal process. If there were five inheritors and two of them wanted to own the property, they would buy the other three out accordingly. However, it’s more common for one inheritor to buy out all of the other parties, because it’s much cleaner that way.

Arcstone Law helps clients resolve any legal issues that exist with their interests or ownership of real estate. Ask us about how to proceed with any kind of real estate case, including a partition lawsuit or other joint process.