Massachusetts partition law provides four methods for partitioning real estate: physical division, private sale, public auction, and “set-off” (a buy-out of the entire property by one or more co-owners). Each method has its advantages and disadvantages, as well as particular procedural requirements. Any owner of real estate considering a partition action should decide on a method to pursue before filing a Petition for Partition.
In any partition action, the court’s first task is to determine whether the property can or cannot be physically divided without destroying its value. Large plots of open land can often be physically divided among co-owners while preserving the value of each owner’s post-partition share. Other types of properties, such as single-family homes, usually cannot be physically divided as a practical matter. If a property can be physically divided, it must be physically divided; the court can only order a sale if it first determines that the property cannot be physically divided without causing financial harm to the owners.
To oversee the physical division or sale of the property, the court will usually appoint one or more disinterested persons, called “commissioners,” who are often attorneys or real estate professionals that are paid by the co-owners for their services, usually on an hourly basis or as a percentage of the sale. If the court orders partition by sale rather than physical division, the court may set a particular minimum price and order that one of three sale methods be used: private sale (engaging a real estate broker to list the property on the open market), public auction (engaging an auctioneer to auction the property), or “set-off” (allowing one or more co-owners to buy out the other co-owners at a certain minimum price). Alternatively, the court may leave it to the commissioner(s) to decide the minimum price and sale method. Regardless of who makes the decision, Massachusetts law requires courts and commissioners to pursue the highest possible price for the property, for the benefit of all co-owners.
By agreement of the owners, or upon an owner’s request, the court may order a property to be sold using a particular method at a particular minimum price, without appointing a commissioner. Co-owners who can agree on a broker and a minimum price will often realize a higher net return because they will save themselves the expense of paying for commissioners or engaging in protracted legal proceedings to determine the appropriate sale method and minimum price. If co-owners cannot agree, an early investment in alternative dispute resolution, such as mediation, may help co-owners reach agreement and thereby reduce the costs of partition for everyone.
To learn more, see our articles on partition actions in general, selecting proper venue for partition actions, and division of partition sale proceeds.