Disagreements in co-owned properties are pretty common. One owner might want to rent the property, another wants to use it as a vacation home, and the next demands it be sold. Sometimes, it’s because a marriage didn’t work out, and other times it’s because heirs of inherited property don’t see eye to eye.
With such disagreements, the only way out is to divide or sell the co-owned property.
If you’re unaware of how the process works, let’s get down to the details here.
Step 1: Voluntary Resolution Attempt
Before considering a lawsuit, most co-owners begin with at least one attempt to resolve the problem on their own. This can be negotiation, mediation, buyout plans, or informal agreements.
Often, courts encourage settlement over litigation as the latter can drain funds, time, and emotions. But when one party refuses, you’re not left with options. Formal legal action is the only way.
Step 2: Partition Lawsuit Filing
If a co-owner is not ready to cooperate, your only answer remains filing a partition lawsuit in the relevant court. To begin, you must contact reliable, experienced local Los Angeles partition lawyers who are well-versed in all relevant legalities.
They will also guide you to gather proof of ownership interest, property description, an explanation of why partition is crucial, and a request for division or sale. Plus, every co-owner must be notified about your step and included as a party in your case.
After filing, the court takes jurisdiction over both the dispute and the property.
Step 3: Court Review and Determination of Ownership Shares
After filing a partition lawsuit, the court confirms the legal owners of the property, the share of each co-owner, existing liens, and existing mortgages.
For disputes about ownership, the court examines purchase agreements, deeds, and inheritance documents. This ensures that the property division or sale happens based on legally correct interests.
Step 4: Selection Between Partition in Kind or Partition by Sale
During division, courts generally offer two options:
Partition in Kind
This one is about physically dividing the property according to each co-owner’s shares. In this, everyone gets a piece of the property. This is common among properties with large land acreage, for practical and fair division, and when splitting does not significantly reduce value. One example is two co-owners dividing farmland into two parcels. But most residential properties cannot be physically divided.
Partition by Sale
This one is generally common in properties where physical division is impossible or drastically reduces property value. This is when the court decides to completely sell the property and distribute the proceeds among co-owners. This is more common in single-family homes, condominiums, and commercial buildings. Generally, the sale may be conducted through public auction, private sale with court approval, and realtor-managed listing under supervision.
Step 5: Referee or Commissioner Appointment
Many cases require courts to appoint an independent third party, also called a referee, commissioner, or trustee. They manage the overall partition process, including property valuation, overseeing the sale, managing disputes about expenses, and reporting back to the court. They ensure the process is transparent and neutral.
Step 6: Expenses Accounting and Adjustments
One of the greatest troubles of co-owned property partition is the unequal and sometimes even undocumented expenses.
Mortgage payments, property taxes, insurance, repairs, maintenance, renovations, and improvements are only a few on the list. One of the owners might have paid for it. Other times, someone pays more than their share because the rest can’t contribute proportionately.
The court can undertake equitable accounting to ensure everyone is fairly compensated. So, if you paid all the taxes on your and others’ behalf, they will reimburse you. If another co-owner lives rent-free or is lagging on their payments, the court adjusts it with their payout. If only one co-owner collected all the rental income, that also gets shared.
The courts undertake all financial adjustments before they distribute proceeds from the sale.
Step 7: Sale Proceed Distribution
After the property is sold, they distribute the property following a specific order. It begins with paying liens or mortgages, then sale-related expenses like closing costs and agent fees, and court and legal expenses.
This is followed by reimbursements for unequal or disproportionate contributions, and only then comes the proportional proceeds distribution to the co-owners.
The court assesses all calculations and approves the distribution according to the law.
Conclusion
While navigating the legal process of dividing and selling co-owned property, always consult a reliable legal team and prepare ahead of time. This will speed the process and ensure you get favorable results soon.
