When a Partnership Property Goes Awry: Understanding Your Options
When people own property together, they are expected to share the rights and responsibilities associated with ownership. The co-owners decide how to split the work and profits, either by an agreement or just by what happens as time passes.
The Importance of a Written Agreement
Everyone getting into this situation should have a written agreement clearly outlining the relationship, as this will make sure everyone is on the same page and will make things easier to deal with should a disagreement occur. Unfortunately, most people forego this step in the excitement of beginning a new endeavor.
Conflict and Disagreement
While many people can get along well enough, sometimes a conflict will develop regarding the maintenance or disposition of the property. For instance, one owner might wish to sell the property while the other does not, or an owner may believe they are contributing more than their fair share to the maintenance.
Resolving Disagreements
Conflict can be emotionally and financially draining and is best avoided when possible. Have a sit-down with your partner and work through your options. If you want to buy out their share, try to agree on a price. If not, try to work out how to fairly divide the proceeds when the property is sold.
The Partition Process
If conflict cannot be avoided, filing a “partition” lawsuit may be necessary. In a partition, the court will examine the circumstances of the property’s purchase and ownership to determine a way to divide the owners’ interests fairly. This type of lawsuit is similar to a divorce for property owners. The judge will consider factors such as the down payment, mortgage payments, taxes, expenses, and use of the property to create a fair division.
The Partition Process in Detail
The partition process typically requires selling the property, sometimes to one of the existing owners, then settling any debts and distributing the remaining equity fairly.
Conclusion
When entering into a property ownership agreement with a partner, it is essential to have a clear understanding of your rights and responsibilities. A written agreement can help avoid conflicts, but if they do arise, it is crucial to work through your options and consider the partition process. A board-certified real estate lawyer can guide you through the process and help you achieve a fair resolution.
FAQs
Q: What is a partition lawsuit?
A: A partition lawsuit is a legal process that helps to divide ownership of a property among multiple owners when they cannot agree on how to do so.
Q: How does the partition process work?
A: The court examines the circumstances of the property’s purchase and ownership to determine a way to divide the owners’ interests fairly, and the property is typically sold to one of the existing owners, with debts settled and remaining equity distributed fairly.
Q: Can I avoid the partition process?
A: Yes, by having a written agreement and working through your options with your partner, you can avoid the need for a partition lawsuit.
