What Is a Partition Action?
Buying a property with a friend, business partner, relative, or significant other can be rewarding investment. But if the relationship sours, undoing the jointly titled deed can pose serious problems, particularly with a mortgage. If the co-owners cannot amicably dispose of one interest or the other through a buyout, or cannot agree to sell the property outright, a judicial partition action my be the only recourse.
Partition proceedings an apply to any form of property, including personal property. The subject of this article is limited to real estate. A common misconception about partition actions is that they are only about title to property. In fact, the first step in any partition proceeding is a determination of whether the owners' can each possess a "part" of the property. Usually, the answer to that question is No, but the party seeking to compel a sale of the property must first establish the impracticality of sharing possession. Stated otherwise, the primary object of partition is physical division of the property, and not conversion or transfer of title to the land, providing the division may be made without prejudice to the whole.
When a property is not capable of division without "spoiling the whole," the next step for the whole property be offered for private sale confined to the parties who hold common title. However, a party owning a majority (in value) of the property may object in writing to any sale, requesting that the property be awarded to them at its valuation fixed by the court and that their interests in the same remain undivided. In that case, the entire property is awarded to the party or parties objecting to the sale, subject to the payment, to the party or parties desiring partition and sale, of the amounts of their respective interests based upon the valuation. The amounts due are charged as liens upon the property, to be paid in such manner and time as the court shall direct.
If a private sale of the property is not possible or not confirmed, the property is then offered at a public sale (or at private sale not confined to the parties), as the court may direct. A public or private sale is always, of course, subject to any and all liens and other encumbrances. A lien holder, e.g. mortgage lender, may credit bid at a private or public sale up to the amount of the debt secured thereby.
If you own property in common with one or more other parties, and you cannot agree on terms to dispose of one or another interest, consult with a Pennsylvania real estate attorney about partition options.