Legal, financial and emotional complications can arise in real estate partition cases. Property co-owners may want to divide their interests in the property. These cases present a number of common challenges that require strategic solutions in order to achieve a fair and efficient outcome. Understanding these challenges, and the solutions that can be found to them, will help co-owners as well as their legal representatives navigate through the process of partition more effectively.
- Calculating Ownership Shares
Challenge: Determining the exact share of each co-owner in real estate cases can be a challenge. Conflicts can arise when there are disagreements over the contributions made to purchase, maintenance, improvements or taxes related the property.
Solution: It is best to have clear documentation from the beginning of co-ownership of each party’s contributions. If such records aren’t available, getting testimony from financial experts or neutral third parties can be helpful in establishing a fair estimate of each coowner’s equity.
- Partition Agreement
Challenge: The co-owners might disagree about whether they should proceed with a division by sale (selling the house and dividing proceeds) or a parting in kind (dividing the property into separate portions). Owners may have different reasons, such as emotional or financial ones, for choosing one method over another.
Solution: Mediation can be an effective way to resolve these disputes amicably. A mediator can assist the parties in understanding the implications of the various options and help them reach a compromise which respects all interests. If mediation fails, the court will need to make a decision based on property type and division feasibility.
- Value of the Property
Challenge: It can be difficult to value a property, especially when the market is volatile.
Solution: Hire an independent certified appraiser who can conduct a thorough appraisal. This will provide a basis for objective negotiations or court rulings. To ensure that the valuation process is seen as fair by both parties, it may be wise to choose an appraiser jointly.
- Dealing with third-party claims
Challenge: Many properties have liens and other encumbrances such as mortgages or tax liens. This can make the process of partitioning more difficult.
Solve these claims before pursuing a partition action. It may be necessary to pay off debts, or negotiate with third parties. Selling the property may be the only option available to remove these encumbrances. The net proceeds from the sale can then divided between the owners in accordance with their share.
- Manage Emotional Conflicts and Interpersonal Conflicts
Problem: Real estate partitions are particularly difficult when there is conflict between family members or business partners, or when emotions or conflicts arise.
Solution: Professional mediators or counselors are able to help resolve emotional issues and provide a more objective solution. Communication that is formalized and handled by professionals in legal or mediation can prevent personal conflicts from escalating.
- Tenants and leaseholds
Challenge: If a property is rented out or leased, tenants’ rights and interests can impact the process of partition, complicating valuation and possible division strategies.
Solution: A partition plan should take into consideration existing lease agreements and tenants rights. In order to manage this challenge, it is important to engage tenants early on in the process. You can also seek legal advice regarding landlord-tenant laws.
- Distribution of Proceeds
Challenge: Even after a property is sold, there can be disagreements over the distribution. This is especially true if the owners contributed unequally to the costs of the property.
Solution: An accounting of the expenses paid by all co-owners can be used to adjust the distribution of the proceeds. It may be necessary for you to seek legal advice in order to make sure that the distribution accurately reflects both each party’s contribution and their legal rights.
- Litigation Costs
Challenge: A partition lawsuit can be costly, potentially reducing the proceeds from any sale.
Alternative dispute resolution methods such as arbitration or mediation can help parties reduce costs. These methods are less formal, faster, and cost-effective when compared to traditional litigation.
- Compliance with Legal and Regulatory Requirements
Challenge: The local laws and regulations governing real estate partitions can differ significantly from jurisdiction to jurisdiction.
Solution: To ensure compliance with local laws and guide the process of partitioning effectively, it is important to hire a real estate lawyer who knows the local laws.
Real estate cases involving partitions present a variety of challenges that demand careful consideration and strategic approaches. Understanding these issues and implementing the right solutions will help co-owners navigate the complexity of partition actions with greater ease, and achieve a more fair and satisfactory outcome for all parties.
This article was written by a Bonardi & Uzdavinis LLP professional. Bonardi & Uzdavinis, LLP We are a boutique full-service law firm that offers a variety of services to its clients. Real estate, probate and personal injury are our primary practice areas. Contact us for a free case evaluation if you need a personal injury or real estate attorney in Tampa Bay.
