A partition action is a legal mechanism that can be used to resolve disputes between co-owners of a property when they cannot agree what to do with it. This type of lawsuit can be used in both commercial and residential real estate matters when there are irreconcilable disagreements, changing circumstances, conflicts over investment strategies, and inheritance issues. If you are a co-owner of real estate, it’s important to be aware of this powerful tool — and how the process works.
Here are several frequently asked questions about partition lawsuits in New York:
What is a Partition Action?
A partition action is a lawsuit initiated by a co-owner of a property to divide or sell jointly owned property when there is a disagreement about how it will be managed or disposed of. Effectively, it allows co-owners to sever their joint ownership in order to gain control over their portion of property — either physically or through sale proceeds.
Who Can Bring a Partition Action?
Any person who holds a possessory interest as a tenant in common or joint tenant may bring a partition action. However, property held by spouses as tenants by the entirety generally cannot be divided in a partition action, unless a narrow exception applies.
What Property Types are Subject to Partition?
Various types of jointly owned property can be subject to partition, including residential properties, mixed use properties, commercial buildings, undeveloped land, inherited properties, warehouses, office space, and others.
What Legal Remedies Can the Court Provide?
The two types of partition that may be ordered by the court include the following:
- Partition in kind — In situations where it is possible, the court may physically divide the property into separate parcels and allow each co-owner to own their portion outright. Physical division of the property is most common when the dispute concerns vacant land.
- Partition by sale — If physical division of the property is not fair or possible, the court may order the property to be sold and the proceeds to be divided among the co-owners.
Before a court orders a sale in a partition action, a judge will typically order an accounting. This is meant to ensure the sale proceeds are divided fairly and the contributions made by the co-owners are taken into account.
Can a Co-owner Buy Out the Others?
In some cases, the parties may agree to a buyout, especially if only one party wishes to sell the property. This can help avoid a forced sale of the property. The buyout can be negotiated before the partition action commences or while it is ongoing.
What are the Defenses to a Partition Action?
There are several defenses to a partition action that may be available, depending on the facts of the case. For instance, if the co-owners had entered into a previous agreement not to sell the property, this may be a valid defense. Other defenses can include showing that the partition would be unfair — or that the plaintiff acted with “unclean hands” in connection with the partition action.
How are the Proceeds from the Sale Divided?
The sale proceeds from a partition action are typically divided in proportion with each co-owner’s respective ownership. For example, if two co-owners each owned 50% of the property, they would each receive 50% of the net sale proceeds, subject to potential reimbursement for their respective contributions during the term of their co-ownership. The accounting aspect of the partition case will determine who is entitled to how much of the available proceeds.
How Can You Avoid a Partition Action?
There are several ways to avoid a partition action. A lawsuit may be avoided by negotiating a buyout — or by using mediation or arbitration to reach an agreement.
How Long Does a Partition Action Take?
There is no definitive timeline that specifies how long a partition action may take — there are many variables that can come into play. The length of time it takes to reach a resolution typically depends upon the complexity of the case and each party’s willingness to settle.
How Much Does a Partition Action Cost?
The amount a partition action will cost can depend on the complexity and duration of the case. Parties can expect to incur attorney fees, court costs — and in some cases, appraisal fees and referee fees.
Contact an Experienced New York Real Estate Attorney
If you are facing a real estate dispute, an experienced attorney can advise you whether a partition action is the best way to proceed to resolve your case. At Barnes & Barnes, P.C., we are committed to assisting clients with a wide range of commercial and residential real estate matters. Contact us at (516) 673-0674 to schedule a consultation.
