People can end up owning land or other real estate together in a number of different ways. It may be because they purchased the property together, it was gifted to them together, or they inherited the property together. While sometimes this starts out with the best intentions, it is not uncommon for co-owners of property to disagree on the ownership or management of the property. Eventually, a partition action may be the solution to resolve these diverging interests.
A partition action is a court action to resolve the co-ownership of land among property owners who disagree with each other. The partition action begins with one of the parties filing a summons and complaint pursuant to Minn. Stat. Chapter 558.01. Once the partition action begins, the court will determine whether the property can be equitably divided in-kind (meaning each owner receives real estate at the end of the action), or whether the property must be sold because in-kind division is impracticable (a "partition by sale").
A common example would be siblings that have inherited a house or farmland from a parent. One of the siblings may feel strongly that the property should not be sold for sentimental or economic reasons. Another sibling may not want to be involved with the real estate for the long-term due to the ongoing maintenance responsibilities and expenses or because they would rather have their inheritance liquidated. In the case of a house, a partition by sale would almost certainly be the outcome. In the case of farmland, an in-kind partition may be possible depending on the number of acres and owners.
Once the partition action gets started, the court will appoint three referees to determine what each owner's interest is and what the property is worth. The referees are disinterested people in the community, such as attorneys, appraisers, realtors, or others familiar with similar property.
One of the downsides to a partition action is that the owners lose a great deal of control over the process. They may not end up with the property they think they are entitled to or any property at all if it is a partition by sale. A court partition action is also often costlier than other remedies that are available to the property owners.
Instead, the owners should first determine if they can work together to come up with a plan for dissolving their ownership interests. This could be done through a mediation or by working with an experienced real estate attorney. In most cases, this is the best option for property owners as it typically allows them to maintain more control over the process and both parties can walk away meeting some of their objectives.
In either case, division of property is a complex process and should only be handled by an experienced real estate attorney. There are a number of factors that must be taken into consideration, including title issues, tax and capital gain issues, and easements. Our office has been handling real estate matters and partitions for over 45 years. For more information, contact one of our attorneys or schedule an appointment.
We also offer full closing and title services, and can assist you with your next real estate purchase or sale.
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