What is a suit for partition?

Attorney Tom Olsen: Then tell us about partition actions. What would be a typical partition action out there that somebody might think, oh, that's my situation. That's what's going on with me. I need to call Caleb about that.[00:00:12]

Attorney Caleb Maggio: Well Tom, a partition is when you have multiple owners of a personal property or real property, and you're basically in disagreement. If one co-owner wants to sell that thing, they can actually file a partition lawsuit, and the court will order it be sold if certain requirements are met.

Tom: Let's talk about partition action, because here's where I see it come up most of the time, Caleb, and that is this is that mom has four kids, and one of the kids lives with mom, and always has lived with mom, is used to living with mom, thinking he's going to live with mom forever and ever. Of course, eventually mom passes away. The four kids inherit mom's home, and the child that's always lived in mom's home is somehow under the impression that, hey, while mom was alive, I could live here for free and forever. Now that mom has passed away, I can still live here for free and forever.

I don't know where they get that idea, but that seems to be a common issue that people are contacting us about.

Caleb: That's right, Tom. That is a pretty frequent one. In that scenario, when you are inheriting other family members, and you really want that person out of your property, if he's an owner, the son that's been living there, then you're going to have to file a partition action, force the sale of the property, and then it's going to liquidate everybody's interest. If he's not an owner, then what you're going to do is file an unlawful detainer lawsuit, which is very similar to an eviction, except there's no rent being paid. It's called unlawful detainer, to basically remove him from that property.

Tom: Caleb, I know this is an issue, because I get regular emails. By the way, you can always email us your legal questions through our website, olsonlawgroup.com. The email just goes like that. Hey, I've always lived with mom, and she's passed away. Can I continue to live here for the rest of my life? I've got to break the news to them that the answer is no. You now co-own it with your other siblings, and either you're going to work with them to sell the property and go your own way, or they're going to file a partition action against you.

Now, every once in a while, the siblings might agree, , our brother's always lived there. We will continue to let him live there forever and ever. That's pretty generous of them, because what they're saying is we own 25% of this piece of property, and apparently we don't want our cash out of it right now. We're willing to wait for a period of time.

Caleb: An important thing to note, Tom, is in those situations where you have a lot of family inheriting the same real property, and maybe one of them had been living there forever, not too long ago, they just introduced something called the Property Heirs Act for Partitions. What that allows is when one co-owner files a partition to sell the property, if that property was passed down by family members to a certain degree, the non-partitioning parties, meaning the defendants, have the right to basically appraise the property and buy out the plaintiff's interest.

Tom: Now you're telling me something I didn't know, Caleb. The Property Heirs Act.

Caleb: That's right, Tom.

Tom: In a normal situation, when a partition action, let's just say we got four owners, and one of them doesn't agree, and the other ones file this partition action, the court will order that the property be sold. It used to be on the courthouse steps, but these days I think they do it online, and that the court has the ability to award special equities in the property, and then they split whatever's left over. In a normal partition action, we got four owners, could one of those four owners be an online bidder if they wanted to?

Caleb: Tom, typically when you sell a property on partition, it's going to go through private sale. Now, if you get to the point where it is done at auction, the answer is yes.

Tom: Rather than the court have it ordering that it be sold on the courthouse steps, the court will instead order that, hey, the four of you got to go hire a realtor, you got to go list this property, you got to go, here's your listing price, here's the sales price, dictating the terms that they have to follow.

Caleb: Yes, in fact, Tom, they'll typically appoint somebody called a magistrate. I like to describe them as a baby judge, and this magistrate essentially has the power to select a realtor, determine the purchase price, and ultimately the magistrate is the one who can say, hey, we're not getting anywhere with this listing of the property in private selling, we're going to do this on the courthouse steps and have people bid.

Tom: I would say the magistrate selling it with using the help of a realtor is probably vast majority of times the way it gets resolved. Let's just say among these four peoples, from the get-go, one of them is saying, hey, I want to own this, I want to be able to buy you out. Does the court have the ability to dictate what the buyout price would be from one of the owners to the other three owners?

Caleb: Tom, if it is not heirs' property, there is no buyout right. The court cannot make any individual sell to a defendant. In the event the property is heirs' property, meaning it was passed down by heirs to a certain percentage, then the court will have the property appraised and the defendants will have the right to buy out the plaintiff's interest for the appraised value.

Tom: I want to go back to the non-heirs' property again. If you've got one owner saying, hey, I want to buy out, I want to buy out, well, the court cannot order that they be allowed to buy it out. When they hire, the magistrate says, okay, we're going to pick this realtor and we're going to list it for this amount, they could always step in and say, okay, I'm a party to this lawsuit, but I'm also going to be a potential buyer of this thing.

Caleb: They could bid on it, yes. I don't really see that happen practically often. The reason for that, Tom, is that usually co-owners who are in a partition lawsuit against each other don't like each other very much. One of the common themes is that neither of them want the other to remain with the property, unfortunately. Oftentimes it's always going to get sold to a third party to avoid that.

Tom: You're dealing with people that were partners in this property, maybe they were siblings with each other, but in this partition action, more than likely there's going to be drama and hard feelings.

Caleb: Yes, I like to call it a non-legal divorce for the reason that almost always, it's boyfriend, girlfriend, or even if it's family members, you are trying to split up a piece of property that's really, it can't be split up. There's always going to be hard feelings with that.

Tom: I want to dive in a little bit more detail on this Property Heirs Act, did you say? What's the name of it?

Caleb: It's the Property Heirs Act, Tom.

Tom: Property Heirs Act. If you've got four siblings and one of them has been living with mom for many years, does the one that's been living there, do they have a greater right to buy out the other three? Does the Property Heirs Act say that whenever heirs have inherited a piece of property, any one of them has an equal right to buy out the others under this Property Heirs Act?

Caleb: Tom, the fact that you're residing in the property doesn't really affect the ability to buy out. What the statute says is that the non-moving party, meaning the party who did not file the partition lawsuit, any of those parties, they're the parties that has the right to buy out the other party. Essentially any defendant can buy out, but no plaintiff can.

Tom: Okay, so if you own a piece of property with three of your siblings, so there's four owners, and just one of the siblings brings the partition action, that sibling is prohibited from buying the property under the Property Heirs Act, but the other three would be allowed to buy the property under the Properties Heirs Act?

Caleb: That is correct.

Tom: I'm just curious of those three, let's say all three of them, hey, I want to buy it, all three of them are saying that, how is that going to be determined?

Caleb: The court will appraise the plaintiff's interest and then it could be handled a number of ways, but the most typical would be that each party would essentially buy one third of the plaintiff's interest in that case, and then you would proceed with all three parties now owning the property, because presumably they're in agreement about what to do with it.

Tom: They continue to be co-owners now with just three of the siblings, not with the other one?

Caleb: Correct.

Tom: Now, when children inherit a property from mom or dad, I have no qualms, no hard feelings that one or more of them want to get their cash out of that piece of property. They're not willing to wait around for the brother to live there for the next number of years. I can understand why they want their share of the cash out of the property. There's nothing unusual about them asking for a partition of the property. I would say, go for it.

Caleb: Yes, absolutely right. It makes sense, Tom, because you have all these obligations when you co-own property. Some of those obligations are that even if you're not living in the property, if you're a co-owner, you have to basically pay your share of maintenance and preservation costs. That would include something like home insurance, perhaps a mortgage payment, necessary repairs. Oftentimes I see family members where there's, say there's two family members, one's living in the property and one is not, and the one that's not living in the property is feeling really cheated because they're still responsible for 50% of the costs of owning the property.

Tom: Yes, taxes, maintenance, insurance, upkeep of the property, I can see that. Hey folks, we've got lines open for your legal qu-.

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