Co-ownership of real estate can be a beneficial arrangement, allowing individuals to increase purchasing power through pooling of resources, sharing the responsibility of property maintenance, and reducing transaction costs. However, co-ownership of property can sometimes lead to conflict and disagreements among the co-owners. Whether it’s siblings who inherit and want to subdivide “the back 40” of a family estate, unmarried couples who break up after buying a house together, or ex-spouses whose property was never disposed of during a divorce proceeding, these disagreements must be addressed in an orderly manner. In Pennsylvania, the primary mechanism for resolving such disputes is through a partition Action.
What is a Partition Action?
A partition action is a legal proceeding aimed at dividing jointly-owned property among its owners, or if division isn’t feasible, compelling a sale of the property. In Pennsylvania, Partition actions can take two main forms:
(1) Partition In-Kind (physical division): This type of partition involves physically dividing the property into “purparts” among the co-owners. Each co-owner receives ownership of a distinct portion of the property. Partition In-Kind is often preferred when the property can be easily divided without significantly reducing its value or utility, such as with large tracts of land or multi-unit buildings.
(2) Partition by Sale: When physical division isn’t practical, or when owners can’t agree on how to divide the property, the court may order a partition by sale. The sale of the property may be private or public. If one or more co-owners of the property wish to retain ownership of it, they may choose to buy out the interest of the party(ies) who wishes to sell the property. This typically involves obtaining an appraisal of the property and, if there is a mortgage, refinancing in the names of the retaining owners. If all owners agree to part ways with the property, the property is typically listed for public sale either with a real estate broker or auctioneer, with the proceeds of the sale being distributed among the co-owners.
What Happens During a Partition Action?
In Pennsylvania, a Partition Action is commenced by filing a Complaint in the appropriate Court of Common Pleas. All co-owners with an interest in the property must be named as parties to the action. The Complaint must include a description of the property as well as details about the nature and extent of the interest of each owner of the property. The Complaint often includes other claims for damages, property taxes, mortgage payments, maintenance, and improvements done to the property.
After all of the pleadings have been filed, the court will hold a hearing to determine whether an Order of Partition should be entered. Upon entering the Order of Partition, a Preliminary Conference is then scheduled. At the Preliminary Conference, the court will consider various issues including whether the parties can agree on the property being divided or sold, as well as any objections or defenses raised by the parties. The court may also appoint a Hearing Officer to oversee the litigation especially if there are complex issues involved or if there are areas of disagreement such as the appropriate distribution of sale proceeds or the value of a party’s interest.
Are Partition Actions Necessary?
With more and more unmarried couples choosing to buy property together, many often fail to appreciate the legal implications to their financial investment that may follow a breakup. As a result, many partitions inevitably follow the end of a romantic relationship where both parties are at odds about what to do with their shared property. As with other legal issues that one faces in their lifetime, it is possible to avoid having to undergo the stress and expense of litigation with careful planning.
One solution may be for the couple to enter into a Co-Habitation Agreement to outline the nature of their relationship and to have a clear, binding understanding of how their joint assets, including shared property, will be divided in the event the relationship ends.
To discuss a Co-Habitation Agreement or whether a partition action is necessary in your particular case, please contact us today at 717-848-4900 or fill out our Contact Us form to schedule a consultation with Derek or anyone from our litigation department.
Derek Maninfior
Associate
Read Derek’s Bio Page in full HERE.
