What happens when two people co-own property, but can’t agree on what to do with it? Whether it’s an inherited home or a shared investment gone sour, co-ownership disputes are common. If you’re stuck, a legal process known as a “partition action” might be the solution. This post, by our Nassau County real estate litigation attorneys, explains the difference between a partition by sale vs. partition by kind in New York.
What Is a Partition Action in New York?
A partition action determines ownership and divides the property between co-owners (known as tenants in common). The court considers several factors to determine the most equitable resolution to the dispute. The court reviews title documents to determine the owners of record and how they received ownership, such as through an estate, a gift, or purchasing the property.
The court may review estate documents, purchase agreements, contracts, and other documents that evidence the agreement between the co-owners. The court may review evidence of the contributions made by each owner to acquire the property and contributions to the maintenance of the property over time.
Two types of partition actions are used to divide real estate: partition by sale and partition in kind.
Partition by Sale of Real Estate in Nassau County, NY
A partition by sale orders the real estate to be sold and the proceeds divided between the co-owners. This option is often used when the real estate cannot be easily divided into separate pieces or the co-owners cannot agree on how to divide the real estate. For example, if two siblings inherit a single-family home and one wants to sell but the other doesn’t, the court may order the home to be sold and the proceeds split.
Partition by Kind of Real Estate in Nassau County, NY
A partition in kind physically divides the property into distinct portions, allowing each co-owner to walk away with a separately titled piece of real estate. This option works best when the property can be equitably divided, like a parcel of undeveloped land or a duplex with separate units.
Advantages and Disadvantages of Partition Actions in New York
Partition actions result in a clear property division, whether by sale or in kind. It resolves ownership disputes and gives the owners a clean break. The owners receive their interest in the property through a sale or a share of the real estate free and clear from the other owner’s interest. Because the co-ownership is terminated, future disputes about the property between the co-owners are prevented.
Even though a partition action can resolve the dispute between the co-owners, there are some drawbacks. A partition by sale does not guarantee that the parties receive full market value for the property. When a property is ordered to be sold, it may not be under ideal market conditions, resulting in a lower sales price.
Partition actions may have tax implications for the owners. They may owe capital gains taxes. Partition actions are adversarial. Therefore, it can cause harm and animosity in personal relationships.
Schedule a Consultation With Our Nassau County Real Estate Litigation Attorneys
Sometimes, co-owners can resolve disputes without going to court through a buyout agreement or mediation. However, if negotiations fail, a partition action may be the only way forward.
Partition actions are complex matters. You need an experienced Nassau County real estate litigation attorney to help you navigate the process and advocate for your best interests. Contact Kohan Law Group, P.C. to schedule a consultation with an attorney to review your legal options.