Robbins: A house divided
“I want it!”
“No, it’s mine!”
“I got here first!!”
“I put more into it!!”
“I’ll sue you first!!!”
Not always do things work out as planned.
When it comes to real property (what most folks call real estate), there are, speaking overbroadly, two basic ways for people to own the property together: as tenants in common, or in joint tenancy.
Think of the parcel of real property as a pie (you can pick your own flavor for this thought experiment). In tenancy in common you — and let’s say your best pal — each own distinct halves of the pie. Take out your cutting knife, and this half is yours and the other is his or hers. There is a clean, divisible separation; half and half.
Joint tenancy is different. Instead of each of you owning clean, severable halves, you each own an indivisible half in the whole thing. Rather than separating the pie down a clean and distinct center line, you each own the whole thing — only each of your ownerships is only a half ownership. Most commonly, spouses own realty — particularly, the family home — in joint tenancy.
How you own real property has consequences. If, for example, one of you wishes to sell your one-half of a property held as tenants in common, the absence of a contract or agreement to the contrary you can. A common problem though is that a one-half interest held in common with another often must be discounted.
Say you and your bestie own a home together and, as you are not spouses, it is not your love nest. Still, when you go to sell your half (unless your partner comes along for the ride to sell his or her half at the same) time, the buyer may say, “Whoa! I’m not going to pay full price to be in business with someone I don’t know and who will have equal say in how we manage our investment.”
There are other consequences as well, such as what happens if one or the other of the partners dies? Again, absent a written agreement to the contrary (speaking generally, interests in real property of substantial duration must be written to be enforced) and/or provisions in a partner’s will, if one dies, the other will find him- or herself in partnership with the deceased’s heirs.
One of the potential burdens of holding property in joint tenancy is that neither party can sell or transfer his or her undivided interest in the whole absent the other’s consent. Of course, in other circumstances this may also be a benefit; one party cannot in a pique pull the literal rug out from under the other.
Since each owns an indivisible half of the whole thing, doing so would be verboten. On the other hand, if one or the other dies, the survivor will immediately own the whole thing; since the interest of each is indivisible, if one dies, the interest is simply no longer shared but is owned in whole by the survivor. This has obvious benefits in a marriage and the further benefit that, in such interest, the deceased party’s “share” need not go through probate.
What, however, of our topic? What is, and how does, partition figure into all of this?
Partition, not to be confused with parturition, which is whole different kettle of fish, is how the law, in its Solomonic wisdom, divides things up when the parties cannot agree between themselves how to do so. Partition is a division of concurrent interests in land, usually including whatever improvements are upon it.
Partition may apply to any sort of concurrent ownerships, usually either a joint tenancy or a tenancy in common. The purpose of a partition proceeding is to eliminate a present concurrent interest in the same property so that each owner may enjoy and possess their interest in severalty (that is, separately from the other).
Partitions may be “compulsory” (judicial) or voluntary (without the court’s involvement). Property can always be partitioned by consent of the owners.
Where land is held in joint tenancy or tenancy in common, any of the co-owners (there may be more than two) may end their own participation in the entity by compelling a partition. If the property cannot equitably be partitioned “in kind” it will be sold by judicial process, and the proceeds paid out accordingly.
What is meant above as “in kind” deserves a quick example. Let’s say the partners own an apartment complex in tenancy in common. To make things easy, let’s also say that the complex consists of two buildings that, except for being separate buildings, are equal in every way. An “in kind’ partition may say, you get this one and your partner gets the other and, in so doing, an equitable result may be achieved without forcing the property to be sold.
Sadly, compulsory partition actions are all too commonly bitter. One party wants out and the other doesn’t. That notwithstanding, if one wants out and the other will not buy that party out or otherwise agree, compulsory partition may be the unhappy answer.
“No, it’s mine!!”
Well, in reality, it’s both of yours and if you cannot work it out on your own, the law of partition is there to help sort things out.
Rohn K. Robbins is an attorney licensed before the bars of Colorado and California who practices Of Counsel in the Vail Valley with the Law Firm of Caplan & Earnest, LLC. His practice areas include business and commercial transactions, real estate and development, family law, custody and divorce, and civil litigation. He may be reached at 970-926-4461 or at his e-mail address: Rrobbins@CELaw.com. His novels, “How to Raise a Shark (an apocryphal tale),” “The Stone Minder’s Daughter,” and “Why I Walk so Slow” are currently available at Barnes and Noble & Amazon.com.