Partition Actions: Property Division for Unmarried Couples
The modern American family has changed, and with that change, so has how we purchase and hold real estate. Now, almost 60% of real estate is owned by more than one unmarried persons. The most common homeowners in this group include straight and same-sex unmarried couples or family members that have co-inherited a property. Currently, around 25% of straight and same-sex millennial couples co-own real estate before marriage—something that was almost unheard of 20 years ago. Additionally, deceased parents and grandparents are passing down real estate to the next generation in record numbers. Whether you have recently split from your partner or inherited a real estate that you and your siblings cannot agree on, the complexity of how we hold real estate in our society has drastically changed in recent times.
While there are laws dictating what happens with real estate after the divorce of a married couple, when a real estate dispute arises in these unmarried arrangements, we must look for a different remedy to compel the sale or division of assets. The most common remedy which has become increasingly useful in these changing times is a “Partition Suit.”
The “Partition Suit” traces its origin to old English common law when co-owners of a farm could not come to a mutually agreeable solution for dividing property. Back then, farmers could petition the King’s Court to divide the land according to each owner’s particular interest in the property, a process which came to be known as “partitioning.” Thus, if two individuals held equal ownership interests in the property, the court would partition the property in half, with one half going to each individual.
Although the power to partition is very effective when dealing with the land itself, the same cannot be said in modern times. The reason for this is that most real property today is covered with houses, apartments, and other permanent building structures, which cannot be so easily divided into equal portions. This difference in the times has led to an added element in modern-day property disputes—the partition by sale. Now, if two or more parties disagree about how to proceed with a property, the party seeking partition will petition the court to force a sale of the property and then divide the proceeds of that sale according to each owner’s interest in the property.
Partition By Sale
A partition by sale is a particularly effective course of action for beneficiaries of an estate who cannot agree on what to do with a house they jointly inherited. For example, a brother and sister will inherit the family house from their deceased mother. However, the sister had been living with mom for the last couple of years caring for her. Now that mom has passed, the sister wishes to continue living in the family home. However, the brother, having a family of his own, wishes to liquidate his portion of the inheritance by selling the house.
When applied to this situation, the partition by sale suit is a particularly effective tool. Under the pressure of the partition suit, the siblings have four options available to them: (1) Sister can buy out brother; (2) Brother can buy out sister; (3) Brother and sister can agree that sister will continue living in the house; and (4) the house can be sold to a third party. If the brother and sister cannot agree, the brother can always petition the court to force a sale of the house and divide the proceeds accordingly.
Suit For Contribution
In addition to a forced sale, the partition suit permits one party to seek contribution from the other for expenses associated with maintaining the property. Using the situation above, if the sister had been maintaining the property and paying property taxes and insurance on the property prior to its sale, she can make a claim for contribution from her brother for his portion of those expenses. If the court granted her request, the brother’s portion of these expenses would be deducted from his share of the proceeds.
Further, the contribution amount may exceed the value of a party’s interest in the property. For example, assume that the house sold for $100,000 and had an outstanding loan balance of $50,000. After satisfying the outstanding loan from the proceeds, brother and sister would each receive $25,000. However, the sister may allege that brother owes $30,000 in contribution for his portion of property repairs, which she incurred prior to the sale. The $30,000 in contribution would exceed his $25,000 equity interest.
Thus, before deciding you utilize a partition suit, you must assess the following three factors: (1) the value of the property; (2) any debt against the property; (3) the likelihood and amount of any contribution claim by other parties with an ownership in the property.
Contact Our DC Law Office for More Information
Finally, for more information on partition actions: property division for unmarried couples, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog.