What Types of Risks are Associated with Partition Actions?

A partition action is a legal process used to resolve disputes among co-owners of a property when they cannot agree on how to use or dispose of the property. In such cases, one or more co-owners may seek a court-ordered division or sale of the property. There are two primary types of partition actions:

1. Partition by Sale: In this scenario, the court orders the sale of the property, and the proceeds are divided among the co-owners according to their ownership shares. This is often the chosen method when co-owners cannot agree on how to use the property or if it is not feasible to physically divide it.
2. Partition in Kind: This method involves dividing the property physically among the co-owners. If possible, the property is physically divided into separate portions, and each co-owner receives their designated portion. This method is typically used when the property can be effectively divided without diminishing its overall value.
   

Partition actions are usually initiated as a last resort when co-owners cannot reach a voluntary agreement on the use or disposition of the property. The court intervenes to ensure a fair and equitable resolution, but it is important to note that Partition actions come with their fair share of risks.

The legal costs associated with such actions can be substantial. The process involves hiring attorneys, appraisers, and potentially experts in real estate valuation, all of which can lead to significant expenses. These costs can quickly erode the value of the property in question and may result in a financial burden for the co-owners.

Also, there is the risk of emotional strain and strained relationships among co-owners. Engaging in a partition action can be highly contentious and adversarial, leading to disputes, bitterness, and even permanent damage to personal relationships. The legal process can exacerbate existing conflicts, making it challenging for co-owners to reach an amicable resolution, thereby causing considerable emotional stress.

There is also no guarantee that the outcome of a partition action will be favorable to any of the co-owners. The court’s decision may result in the forced sale of the property, often at a less-than-optimal price. This means that co-owners may not receive the full value of their share of the property, which can be a significant financial setback. Additionally, the process can take an extended period, tying up assets and causing uncertainty about the ultimate result, compounding the financial and emotional risks associated with partition actions.

It is important to consult with an attorney who specializes in real estate litigation. Please contact us for a consultation with one of our experienced attorneys.