Two or more people own a house, and one co-owner decides that he or she no longer wants to be an owner. What, can be done? It’s called ‘partition’ and it happens all the time, in a variety of circumstances.
Let’s say you inherited the family home with your siblings, and you don’t live in the property, so you want out; or you bought a condo with a girlfriend who moved out when you broke up and she wants her name off of the unit; or you bought a house for your sister to live in, but her nefarious son weaseled his way onto the title. There are dozens of examples.
When you are co-owner of Property (with someone other than a spouse), the relationship sours and one party wants to sell, their right to do so is nearly absolute. Under the D.C. Partition Law the Court can require a division of the property or where the property cannot be divided without a loss in value, the Court can sell it and split the proceeds among the owners. D.C. Code §16-2901.
There are some narrow exceptions to a co-owner’s right of partition, such as where the parties have a contract which waves partition rights, but, the exceptions are few and far between.
In partition cases, co-owners usually cut a deal
As a result, in cases of partition, the issue usually is not whether the property can be sold, but, how the proceeds of the sale will be split.
Partition cases are rarely litigated to conclusion because of the financial disincentives. Specifically the parties must absorb their own legal fees and the substantial cost of the Court conducting the sale, such as Trustee’s fees and other administrative costs. Since all of this money comes out of the owners’ share of the proceeds, it just make economic sense to agree on a split.
Where one of the owners is living in the property, and wants to stay, often the solution is a negotiated buyout of the non-resident owner.
In 2017, there was an attempt by the Council to legislate a solution to jointly owned property through inheritance. The Uniform Partition of Heirs Property Act would provide additional protections to co-owners such as the right of first refusal, an appraisal, and a ‘commercially reasonable sale supervised by the court.’ But, since we are nearing the end of the Council Period and there has been no movement on the law in months, it seems that it will die on the vine.
If you are in a co-ownership situation that is coming to an end, either because you, or your co-owner want to sell, there are legal options. I’d be glad to assist you in making the decision that is right for you. Please feel free to contact me or use the scheduling tool on my website to book a free case evaluation at a time that is convent for you.