A partition action is a legal proceeding to force the sale of real estate that is held by multiple owners, and to fairly divide the sale proceeds among the owners. A partition action is often used a last resort when one or more owners want to sell, but cannot agree with the other owners on the terms of the sale. Partition actions are governed entirely by Chapter 241 of the Massachusetts General Laws. “Any person, except a tenant by the entirety [a married couple], owning a present undivided legal estate in land, not subject to redemption” has a right to partition under Chapter 241. M.G.L. c. 241, § 1.
A partition is initiated by filing a Petition for Partition in either the Land Court or a county Probate and Family Court. (For more, read our article on proper venue.) After filing a Petition for Partition, the petitioner must serve the petition on all other owners and anyone else holding an interest in the land (e.g., a mortgage company), publish a legal notice in a local newspaper, and record a notice of partition with the Registry of Deeds.
After a petition for partition is filed, served, published, and recorded, the court’s first task is to determine whether the property can be physically divided. In the case of single-family residences, physical division is generally considered impractical, but for other types of properties, such as undeveloped land, physical division may be possible. If the court determines that the property cannot be physically divided, then the court will order a sale, either by public auction, private sale (i.e., listing the property on the open market), or “set-off” (a buy-out by one owner of the other owners’ shares at fair market value). The court may appoint a commissioner to oversee the sale of the property and the collection of proceeds. Regardless of how the court decides to dispose of the property, it must seek the highest possible return for all owners at current fair market value.
After the property is sold, the court must divide the proceeds. Generally, the presumption is that the proceeds will be divided according to the respective owners’ share of ownership. Hence, if there are two owners who each own 50% of the real estate, the court presumes they will each receive 50% of the proceeds. However, any owner can make a claim to a larger share of the proceeds by showing that he or she has contributed more than his or her fair share towards past property expenses, such as mortgage, insurance, and tax payments.
In a partition sale, the costs of selling will almost always be higher, and the ultimate sales price will typically be lower, than in an ordinary market sale. Accounting proceedings to determine fair division of the proceeds may take months and require expensive expert testimony. Thus, a sale by agreement of all owners, outside the court system, is usually far preferable to a partition sale. However, when an amicable sale by all owners is not possible, the partition laws provide owners of jointly-held real estate with a mechanism for forcing a sale and “cashing out.”
To learn more, see our articles on selecting proper venue for partition actions, methods for disposing of partitioned property, and division of partition sale proceeds.