Whether it is a romantic, business, or familial relationship, sometimes people choose to co-own real estate. When the relationship sours, it can be difficult to agree on what should happen to the property. If the property was owned by a married couple that splits, its fate is typically determined in the divorce proceedings. For most other situations, the parties may need to run to the courthouse to ask that the property be physically divided or sold at a public auction. In New York, this special proceeding is known as a partition action and is governed by the Real Property and Procedures Law (the RPAPL.)
Generally, under RPAPL §900, a person holding and in possession of real property as joint tenant or tenant in common may maintain an action for the partition of the property or for a sale if it appears that a partition cannot be made without great prejudice to the owners. What that means is that if it is not possible for the property to be physically divided, the court can order a public sale. The parties would then split the proceeds from the sale in accordance with their respective interest in the property.
Take, for example, a house that is owned by two disgruntled, unmarried partners as joint tenants who decide to split. Now, assume that they each own a 50% interest in the home and that the house cannot be physically split down the middle. If the parties each contributed the same amount towards the property during the course of the relationship, any proceeds from the public sale of the home should be split 50/50.
Of course, it is never that cut and dry. Sometimes one party puts the entire down payment on the home, or makes the mortgage payments each month, or pays all of the property taxes, or does not physically reside on the property, or any number of other circumstances. In these instances, the court will conduct an accounting. Taking into consideration each of the parties’ respective contributions as well as any outstanding debts on the property (including mortgages and liens,) the court will then equitably allocate the sale proceeds between them.
Partition actions can be long and drawn out affairs. Depending on the circumstances, it may make sense for the parties to hire a mediator to try to work out a deal so that time and resources aren’t wasted in the courthouse. There are many nuances to a partition action in New York – you don’t want to try this one on your own. Canales PLLC has experience in handling partition actions and we are available for virtual consultation.
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