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    The Lawletter Blog

    PROPERTY: When Partition by Division of Sale Proceeds Is Appropriate

    Posted by Matthew T. McDavitt on Wed, Dec 18, 2019 @ 10:12 AM

    The Lawletter Vol 44 No 6

    Matthew McDavitt—Senior Attorney, National Legal Research Group

                Any co-owner possessing an interest in realty has a right, under common and/or statutory law, to the partition of such realty, as no owner may be forced to remain in co-ownership. Physical partition is preferred and should be made where such realty may be divided without substantial prejudice to the other co-owners. Partition may be made over the objections of the other co-owners, and the fact that the other owners possess property or use interests cannot prevent partition. Fesmire v. Digh, 385 S.C. 296, 683 S.E.2d 803 (Ct. App. 2009).

                In some states, if the realty sought to be partitioned constitutes an owner's constitutionally or statutorily protected homestead, then such homestead status is an affirmative defense to partition, see Morris v. Figueroa, 830 So. 2d 692 (Miss. Ct. App. 2002); conversely, other jurisdictions hold that a cotenant's homestead interest in the property does not preclude partition, premised upon the absolute right of co-owners to exit co-ownership at will, see Wisner v. Pavlin, 2006 SD 64, 719 N.W.2d 770.

                Where physical partition of the parcel would result in prejudice to the owners (such as materially impairing the combined value of the newly partitioned parcels, or impairing the use value of the parcel by splitting it into undesirable portions), then equity intervenes and the supervising court will compel  the sale of the realty and the division of the proceeds amongst the owners. See, e.g., Perretta v. Perretta, 143 A.D.3d 878, 39 N.Y.S.3d 495 (2016); Fusco v. Austin, 141 Conn. App. 825, 64 A.3d 794 (2013). "[I]f a division in kind is impracticable and cannot be effected without sacrifice in value and to the best interests of all parties, a sale will be ordered, and the proceeds divided." Nehls v. Walker, 215 Iowa 167, 244 N.W. 850, 851 (1932).

                The goal when selling realty in a partition action so as to split the proceeds with the co-owners is to obtain fair market value, Grimm v. Beck, 237 S.W.2d 1017 (Tex. Civ. App. 1951), or stated differently, the aim of sale is to achieve
    "the best price that could fairly and reasonably be obtained." Empire State Dev. Co. v. Lambert, 15 A.D.2d 511, 512, 222 N.Y.S.2d 681, 682 (1961), amended, 15 A.D.2d 936, 227 N.Y.S.2d 891, aff'd, 11 N.Y.2d 913, 183 N.E.2d 75 (1962). A partition sale price should be set aside only where there is substantial disparity between the sale price attained and the fair market value, such that sale on such terms shocks the conscience. Hegewald v. Neal, 28 Wash. App. 783, 626 P.2d 535 (1981).

    Topics: Matthew T. McDavitt, property sale, partition, sale proceeds

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