Our firm frequently receives calls from property owners who want to sell but the co-owner does not agree. Without all owners' agreement the property cannot be sold. Is there a way to sell without the other owner's agreement? Yes. The the sale can be accomplished through a “Partition Action”.
Partition is a statutory remedy by which one owner may force the sale of the property absent the participation of the other owner(s). The statute, A.R.S. §12-1211, et seq., is designed to allow one or more owners to compel a sale of co-owned property where the other owners refuse to agree to a voluntary sale.
The action is called “partition” because, historically, these disputes involved raw acreage, farm land or tracts of land that could be physically divided into smaller parcels. The land was surveyed, separate parcels were created and then allotted to the owners. Today, most owner disputes involve single family residences or improved land. Our modern statute provides for a sale where a physical division would be impossible or would diminish the value of the property.
Partition is a rather unique civil action because there is no defense available, except for protection of certain reversions or remainder interests, which are rare and are not usually present in most deeds.
“The owner or claimant of real property or any interest therein may compel a partition of the property between him and other owners or claimants by filing a complaint in the superior court of the county in which the property, or a portion thereof, is situated.” A.R.S. §12-1211(A)
The statute does not define “claimant” or “interest”. Assuming a claimant is not named on the deed, the interest would be equitable. Whether partition would apply in these instances has to be determined on a case-by-case analysis.
The statute uses mandatory terms such as “compel” and “shall”. These terms make it clear that the order to sell is not up to the court's discretion. “The court shall enter a judgment directing that partition of the real property be made in accordance with the shares or interests of the parties entitled thereto and specifying the share or interest of each party. A.R.S. §12-1215(A)
The judge will appoint a “Commissioner”, usually a real estate agent, to conduct the sale of the property and deposit the net proceeds into court. The judge then determines each party's share of the sales proceeds for distribution. This is the issue that triggers emotions and the conflict over money gets heated. One party contends he is entitled to more of the proceeds than his percent interest would indicate, reducing the other's share of the funds. This contention is not without merit, if more than his share was expended on the property. For example, if the down payment was $30,000 and a 50% owner paid $20,000, while the other paid $10,000 there is a discrepancy of contribution. If proven, the first owner can claim she is entitled to 2/3 of the proceeds. Similarly, if a 50% owner made all of the loan payments, property taxes, etc., he can claim reimbursement from the proceeds for 50% of those payments (joint owners are each responsible for their percentage share of the property costs).
Since strangers do not normally buy property together, the parties to partition action have a history—family, friends, brothers, sisters, ex-spouses, ex-partners. By definition, these parties can not agree on disposition of the property, leading ultimately to a partition suit. Emotions can get heated when the issue of money is involved. Invariably, one party disputes the amount or fact of the other's financial contribution.
Because of these relationships, our firm makes every attempt to settle disputes, if possible, before the suit is filed. In as much as there is no defense, it makes financial sense for the parties agree to list the property and get market price, rather than leaving it to a court-appointed agent who owes neither party a duty to obtain the highest price. An amicable resolution also saves each owner the expense of legal fees and costs, which, incidentally, are not recoverable by either party.