What is Partition of Real Property?
When two or more co-owners of real property disagree over its use or management, one mechanism to resolve such disagreement is by partition. Partition of real property is a formal legal proceeding governed by Chapter 64, Florida Statutes. There are two types of partition: (i) partition “in kind,” where legal title to the property is divided among the owners in an equitable manner (i.e., each owner will own a fraction of the divided property); and (ii) partition by sale, where the property is sold at auction and the proceeds are equitably distributed among the owners (i.e., each owner will receive a share of the proceeds). Partition by sale may occur if the court concludes that partition in kind cannot occur without prejudice to the owners. In the case of a partition by sale, the court may order the associated fees and costs to be paid out of the sale proceeds. In addition, any state, county, and municipal taxes due at the time of the sale must be paid from the proceeds.
When Is Partition Appropriate?
Co-owners of real property often disagree about the use, management, or other aspects of real property ownership. Perhaps one owner desires to sell the property for an immediate profit, but another owner wants to wait to see if the property will further appreciate. Maybe one owner intends to develop unimproved real property, but the other owner wants to keep the property in its natural state for recreational purposes. Perhaps the property is encumbered by a mortgage, and the co-owners cannot agree about whether to pay off mortgage debt or refinance debt. If co-owners cannot resolve such matters among themselves, then formal partition may be appropriate.
Who May File for Partition?
A lawsuit for partition may be filed by either a natural person or a corporate entity. The lawsuit may be filed by one or more joint tenants, tenants in common, or coparceners (joint heirs), or others interested in the lands to be divided. However, a lawsuit for partition may not be filed by one married spouse against another if the married couple owns the property as tenants by the entireties. Naurison v. Naurison, 132 So. 2d 623 (Fla. 3d DCA 1961). Dissolution of the marriage transforms the property ownership into tenants in common, and thereafter the property may be partitioned. In addition, “[i]nterests which are merely successive, and not concurrent, are not partitionable.” Barden v. Pappas, 532 So. 2d 707 (Fla. 5th DCA 1988). This means that a remainderman may not maintain an action for partition against the holder of a life estate (and vice versa).
While the general rule is that partition of real property by a co-owner is a matter of right, the right to partition may be waived by agreement. Condrey v. Condrey, 92 So. 2d 423, 426 (Fla. 1957). Nevertheless, under Condrey, an agreement not to partition must be for a reasonable and definite period of time and not otherwise unduly restrictive.
Where is the Partition Lawsuit Filed?
The lawsuit for partition must be filed in the county where the real party or any part thereof is located. Partition is an in rem cause of action and is subject to the local action rule, notwithstanding where the co-owners reside. Harvey v. Mattes, 484 So. 2d 1382 (Fla. 5th DCA 1986). Where the lawsuit for partition cannot be personally served on a co-owner, service of process by publication is permitted by Section 49.021, Florida Statutes.
What About Mortgages on the Property?
If the subject real property is subject to a mortgage, the mortgagee (lender) is a proper party to the partition lawsuit. Once the mortgagee has been made a party to the partition lawsuit, the mortgagee may foreclose its mortgage in the partition lawsuit. Miles v. Miles, 158 So. 520 (Fla. 1935). Foreclosure of the mortgage could result in additional complexities and costs to the co-owners of the real property.
How Is Partition Accomplished?
If the court determines that the real property should be partitioned, the court will appoint three commissioners to support with the partition pursuant to Section 64.061, Florida Statutes. The commissioners have the power to retain a surveyor to assist with their efforts, and the commissioners are entitled to reasonable compensation for their services. The commissioners will prepare a report for the court concerning the partition, though the parties may object to the commissioner’s report. If there are no objections to the report or if the court concludes that the objections are without merit, then the court will enter a final judgment entered vesting the parties with title to the parcels of the lands allotted to them.
If partition in kind is not possible without prejudice to one of the co-owners, then the court has three options for ordering a partition sale: “(1) a judicial sale by public auction under section 64.071, (2) a private sale conducted by the clerk or a magistrate under section 64.061(4), or (3) a private sale based on the stipulation of the parties in accordance with Carlsen.” Marks v. Stein, 160 So. 3d 502 (Fla. 2d DCA 2015) (citing Carlsen v. Carlsen, 346 So. 2d 132 (Fla. 2d DCA 1977)). If the third option under Carlsen is selected, then the co-owners have the opportunity to negotiate a buyout among themselves or arrange a private sale to a third party, subject to a reasonable deadline. If the deadline is not achieved, then judicial sale of the property will take place in accordance with Chapter 64, Florida Statutes.
What Alternatives to Partition Exist?
When co-owners of real property cannot agree on about the use, management, or other aspects of real property ownership, they should first explore alternatives such as a buyout among themselves or sale to a third party. This may entail hiring one or more appraisers to ascertain the fair market value of the property, communicating with mortgage lenders, and/or selecting a broker to assist with the sale of the property, all the while ensuring that the property is maintained and that taxes and insurance are paid.
Legal counsel should be retained as soon as it becomes apparent to a co-owner that they are approaching an impasse with another co-owner regarding the use, management, or other aspects of real property ownership. Legal counsel can facilitate the division of title to the property among the co-owners, arrange for a buyout among the co-owners, or negotiate the sale of the property to a third party without the need file a formal legal partition lawsuit (and its attendant costs and delays).