Everything You Want to Know About Partition Lawsuits
Partition originally came about as a fair method to allow for the division of property. Partition is distinguishable from other types of lawsuits involving real property such as “quiet title” and “ejectment” because partition lawsuits require a common title or interest in the underlying property rather than two competing claims for ownership. Although both personal property and real estate may be partitioned under Florida law, real estate partitions make up the overwhelming number of partition cases filed.
Mechanics of Partition Lawsuits
Partition lawsuits are filed in the county where the property is located. Either a corporation or a natural person may file the lawsuit depending on which one owns the property. The correct parties to include in the lawsuit include the owners of the property as well as all parties who may have their rights impacted by the result. The complaint does not need to be sworn to by the Plaintiff and a party can bring counts for other types of relief in addition to suing for the partition. By law, the complaint must allege the property sought to be partitioned, the owners and legal residences of the owners or others interested in the property, the amount of the property interest held by each owner, and any other matters, which may be necessary for the court to determine the interests of the litigants. If an owner dies during the lawsuit, the owner’s heirs must be made parties to the lawsuit before it can continue. A Plaintiff can give notice of the lawsuit in a newspaper if the Defendant is unable to be located to serve with the complaint in person. If a dispute arises over the ownership of the property while the partition case is pending, it can be litigated at that time.
Defenses to partition lawsuits frequently involve the accounting portion of the case, but there are a limited number of defenses which can entirely prevent a party from being awarded a judgment for partition, such as where there is a written agreement in place signed by the parties stating that they agree not partition the property. A handful of Florida cases recognize this rule. In Condrey v Condrey (1957, Fla) 92 So 2d 423, the court stated that the right to partition may be waived, or one may be estopped to enforce the right, by an agreement not to partition, either express or implied. Also, where a party cannot prove title to the property, no partition will be had. Absent these and other limited defenses demonstrating extreme circumstances, a court must award a partition even though one party usually does not want it to.
If the property can be partitioned by physically dividing it (for example, a big open cornfield) the court may appoint a commissioner as officers of the court to carry out the judgment of partition. The commissioner’s job is to file a report with their decision as to how the property should divided. Sometimes the commissioner’s will employ a surveyor to help with this. The commissioners also have the power to examine witnesses and take their testimony when necessary. In this sense, they act as part of the judicial branch. The commissioner’s report is served on the parties, who must object within 10 days thereof or the report is confirmed.
The court has three options for ordering partition sale of property that is alleged to be not reasonably susceptible to fair physical division and therefore cannot be divided: 1, judicial sale by public auction pursuant to partition statute; 2, private sale conducted by clerk or magistrate pursuant to statute; 3, private sale based on stipulation of the parties, in accordance with procedure established by the court. Marks v. Stein, 160 So. 3d 502 (Fla. 2d DCA 2015).
Often times the property cannot be partitioned by physically dividing it. If the court orders the property to be sold at a judicial sale, it may permit one or more parties have an automatic credit bid that is equal to their interest. Partition actions involve a unique method for awarding attorney’s fees and costs. There is no one party take all approach. Instead, an award of attorney’s fees and costs is statutorily awarded to any party “commensurate with their services rendered and of benefit to the partition …” per Florida statute. In other words, it is conceivable that all parties may be assessed attorney’s fees as well as awarded their own share based on their legitimate contribution to the partition case. If one party did more work toward the partition of the property, then that party should be awarded a greater portion of the attorney fees. Where it appears that the attorney representing a minority interest has performed necessary services of a greater value in the partition suit than those performed by the attorney for the majority interest, there is no reason why such attorney could not receive the larger fee. The burden of this fee, however, is to be borne by the parties in proportion to their interests; that is, the majority interest would be made to bear the greater portion of the fee awarded to their own attorney, as well as the majority of the fee awarded to the attorney for the minority interest, and similarly, the share that the minority interest must bear in such fees is the percentage that its interest bears to the whole.
A. Effect of Mortgages
Properties sought to be partitioned often have mortgages encumbering them. The point to remember here is that a mortgage holder who has a lien on the property is entitled to participate in the case so that it can be heard with respect to its security interest on the property, however, the rights of the owners to have the property partition are paramount to that of the lienholder. However, this does not eliminate the mortgage lien and a mortgage holder may be allowed to foreclose on its mortgage during the lawsuit.
B. Homestead Property is Subject to Partition
Contrary to popular belief, there is no special rule preventing someone from partitioning homestead property. The thinking here is that there nothing in Florida’s homestead law that prevents the partitioning of the property if it is necessary to the complete enjoyment of the property by owners.
C. Voluntary V. Judicial Partition
There are two ways to partition property. Voluntary partition is done by a written a agreement entered into by the owners of the property, while involuntary partition occurs when one party files a lawsuit to partition. Voluntary partition should always be accomplished by a written agreement whereby the property is conveyed to the other party(s). All the property owners must be in agreement to a voluntary partition, which is presumptively valid.
D. Tax Aspects
A partition of property is a tax-free action, whether undertaken voluntarily by the parties or enforced by a court order. If the partition is effected by a sale of the property, however, with a distribution of the proceeds to the cotenants, for tax purposes that is no longer a partition action. The parties have merely sold the property and the sale is subject to the usual tax rules that apply to property sales.
E. Distribution of Sale Proceeds After Sale
Whenever the trial court orders that property that is not susceptible of partition in kind be sold at public auction to the highest bidder, the court may order the money arising from such sale be paid into the court to be divided among the parties in proportion to their interest or alternatively order it distributed pursuant to its accounting.
An accounting of rents and is usually requested in addition to the actual partition of the property since each party is entitled to pay and receive their just share.
A. Accountings for Mortgage Payments, Taxes and Insurance
The Plaintiff to a partition suit may request an accounting for money that was used to pay the principal and interest on a mortgage as well as for insurance and taxes on the home. As joint tenants, the obligations for co-owners is the same, therefore one co-owner who pays a greater portion of money for the mortgage, taxes, insurance or necessary expenses is entitled to credit for the amounts paid upon the sale or partition of the home. Absence special circumstances, Florida law requires the nonpaying owner to reimburse the paying owner for common expenses at the time of and from the proceeds of a subsequent partition sale. Hence, the Plaintiff may request that the Defendant be required to make a contribution for his proportionate share of the sum thus expended by the Plaintiff from the defendant’s portion or share of the sale proceeds or land.
Accounting of improvements and repairs as an Offset for Rental Value.
B. Accountings for Repairs and Improvements
At the time of the partition of jointly owned property, a co-owner is entitled to credit for one-half of the amounts expended for necessary and reasonable repairs, maintenance, and replacements, which preserve the property. A co-owner is also entitled to credit for improvements he made on on the property to the extent that such improvements enhance the value of the real estate at the time of partition but is not entitled to the cost of the improvements. Thus, in order for a co-owner to be entitled to credit for improvements made to property later partitioned, he must establish the amount that the improvement enhanced the value of the property.
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