What do you do if you find yourself owning real property with someone else, but you want out and the other doesn’t? So long as you’re not married to the other person (family law is a completely different beast), you file a relatively simple lawsuit that seeks what’s called “Partition.” A partition action asks the court to force a sale and ultimately a division of the net sale proceeds.
Whether the court forces a sale to a third party, or forces one co-owner to buy out the other, is part of the process and which option is available to you depends upon the facts of the case. In certain circumstances, the attorneys’ fees are paid from the gross sale proceeds. The reality is that the filing of a partition action typically forces the parties to a settlement because the endgame is made clear – the only thing left to really discuss is terms, and either the parties set those terms themselves or the court will.
Why is a transactional attorney writing a blog post on a litigation matter? Because, as I wrote, the filing of a partition action forces the parties to the negotiating table and they enter into an agreement (i.e., it quickly turns from litigation into a business transaction). I recently represented a married couple who owned a home 75/25 with a relative. That relationship soured and we filed a partition action. I was able to get my clients everything they wanted and, with a very well drafted settlement agreement, I even forced the other party and her lawyers into some very uncomfortable legal and financial positions that drove the other party to perform quickly so she could be out from under the burdens we created for her. This is no guarantee that your case will be as successful, but it’s representative of what can happen when you file a partition action.
Greg Borman is an attorney in San Diego, California, who advises and represents businesses of all sizes and stages, as well as their owners. He can be reached at firstname.lastname@example.org or at (858) 232-7100.