Although any co-owner has the right to partition a property (meaning selling a property through a legal proceeding called a partition action), irrespective of the consent of the other co-owners, there is an exception: a partition action is not available to tenants by the entirety (a type of ownership limited to married couples). Once divorced, however, the parties may pursue a partition action because a judgment of divorce converts a tenancy by the entirety to a tenancy in common.
The other exception to the right to partition exists when a co-owner by agreement forfeits his right to transfer his property interest under certain circumstances, which is considered a restraint on alienation. A restraint on alienation that is “unreasonable” is contrary to public policy and will not be enforceable.
The Appeals Court recently considered whether a divorced party could pursue a petition for partition notwithstanding the fact that he had signed a separation agreement prohibiting him from selling the house without his ex-wife’s consent, in Oscar Bonilla vs. Rosa Lidia Yanes Najera.
The Bonilla case involved a married couple who had purchased a house as tenants by the entirety. Several years later, they entered into a separation agreement and a judgement nisi approving the separation agreement entered. Mr. Bonilla moved out while his ex-wife continued to live in the house.
The separation agreement provided that the house could only be sold or transferred “by agreement of both parties.” When Mr. Bonilla filed a petition for partition in the Probate and Family Court, seeking to have the house sold, the Court dismissed the petition on the basis that the agreement was unambiguous insofar as it precluded Mr. Bonilla from selling the house without his ex-wife’s consent. The judge’s decision, however, did not address Mr. Bonilla’s argument that the agreement’s restraint on alienation was unenforceable.
Mr. Bonilla appealed, reiterating his argument that the agreement’s restraint on alienation was unenforceable. The Appeals Court considered, among other factors, the fact that the restraint extended indefinitely by binding not only the Mr. Bonilla and his ex-wife but also their respective estates (heirs, devisees, etc.) and was, thus, was invalid on public policy grounds; the fact that Mr. Bonilla’s ex-wife had not articulated how keeping divorced parties and their estates economically bound to one another indefinitely accomplishes a “worthwhile purpose,” as required by law; and the fact that the number of people affected by the restraint was unlimited, because the provision prohibited any sale or transfer without the consent of both parties.
Relying on those factors, the Appeals Court concluded that the restraint on alienation imposed by the separation agreement was unreasonable and was, thus, unenforceable and ruled that Mr. Bonilla was entitled to pursue his petition for partition.