Partition: Forcing the Sale of Real Property When Co-Owners Cannot Agree

MAY 2020

By E. Tyler Howell
Attorney & Associate

So you purchased a home with your significant other (boyfriend, girlfriend, partner, etc.).  You thought that they were “the one,” and you reasoned that interest rates were “so low,” and real estate values are only going to continue to increase. You questioned yourself, “Why am I wasting money on rent each month, when I could be gaining equity by owning?”

If this is you, my hope is your relationship is going strong and your financial investment is paying off. I hope you love the condo in the Pearl District, even though you currently have to “self-isolate,” and cannot frequent your favorite hot spots.

But if you are like many others, after taking the big step to move in together and financially attaching yourself to your significant other through the purchase of real estate, you may find things just aren’t working out. The worldwide pandemic has forced us into confinement with the “ones we love,” and many are realizing that the unwashed dishes left in the sink, the living room toenail clipping, and that quirky laugh you were initially drawn to are now the collective “straw that broke the camel’s back.”

I get it, you want out.  Yet there is one problem: your significant other has become accustomed to the Lake Oswego lifestyle, and just can’t part with the condo or house. They want to keep it, but can’t afford to buy you out. You don’t want to leave your name on the mortgage, and you want your investment back.

While most people who find themselves in this situation eventually come to an amicable resolution, some do not. When that happens, there is a statutory tool that is at your disposal: Partition. In Oregon, the partition laws are outlined in ORS 105.205 et seq., and in Washington, they can be found at 7.52 et seq. If you venture out to read and familiarize yourself with these laws, you will find arcane terms of art, and confusing statutory procedures.

Like many of America’s laws, partition law came from Great Britain, and originated nearly five centuries ago. In Oregon and Washington, these laws were important early on because of the timber industry. Because of their origination in times where large parcels of land still existed, the partition laws are focused first on dividing land “in-kind.”

An in-kind division of property is demonstrated by the following illustration: Two unmarried people own a five acre parcel of land, and cannot agree on whether or not to harvest the timber on it. One cotenant* may maintain an action for partition. The court will appoint a “referee” to physically survey the land and divide the land in accordance with the ownership percentages.  Assume that both cotenants own an equal 50% interest, and the land is worth $100,000. The referee is charged with dividing the land so that each cotenant owns a new parcel of land that is worth $50,000. However, if the land cannot be divided without “great prejudice to the parties”, the court may order the land be sold at public auction, in a similar manner to a foreclosure sale, held on the steps of the court house.

Fast forward to present day, and reconsider the house in Lake Oswego. Obviously, you and your significant other cannot physically split the home – it just won’t work. Under the partition statutes, you are left with the second, somewhat undesirable option of asking the court to order partition by sale at public option. This option is undesirable to many because a public auction most likely will not get you the highest price for your real estate.

Lucky for you, there is a third option.  You can file a motion with the court to appoint a referee to conduct a private sale of your property. This means a referee (usually a real estate professional) will be hired to determine a listing price, and will sell your property through the multiple listing service. Once the sale is completed, you and your significant other will split the equity in the property in accordance with your ownership interest.

While this method of partition is usually the most desirable, it is not specifically outlined in the statutes. Combine this fact with the fact that these laws were written hundreds of years ago, before “condos” in their modern form were even “a thing,” and the result is that courts and judges often find themselves attempting to drive a square peg through a round hole. More specifically, they are trying to craft a legal solution for a modern situation with laws that were implemented during the reign of Henry VIII.  For that reason, counsel that is knowledgeable on the partition laws and their modern application is essential.

Don’t worry, you are not stuck owning that house or condo with your dishwashing-inhibited, soon to be ex. The partition laws have existed for hundreds of years, and Buckley Law can guide you and the courts through the process to get that property sold, and allow you to move on with your life.

While many people who find themselves needing to file a partition lawsuit acquired the real estate voluntarily (see above), some do not. Suppose your parents pass away and leave the family farm to you and  two siblings  You are now one of three owners of the real property, and you did not choose to own it with your siblings. It may be that one of your siblings lives at the property, and does not want to sell or leave; this is where partition becomes useful, as you can force the sale of the farm through a judicial partition action.

However you came to own the property, and regardless of your reasons for wanting out, we are here to help. If you have real estate partition question and/or need construction or real estate legal assistance, please contact Tyler Howell at 503-620-8900 or visit our website at www.buckley-law.com.

*NOTE: The word ‘Cotenant’ is a legal term of art that is synonymous with ‘co-owner’, but has technical legal implications in certain situations.

 

Real Estate, Condo, House, Partition, co-habitating, relationship, property, force sale, title, co-tenant, estate, own, co-own, sell, boyfriend, girlfriend, partner, co-owner


 

E. Tyler Howell is an associate in Buckley Law’s Real Estate & Construction Law group, working in tandem with the Litigation department. He is a litigator and transactional attorney with a diverse civil practice. Tyler brings his business experience to the practice of law, striving to deliver cost effective and efficient results, recognizing that his client’s bottom line is at the core of each matter’s success. He has extensive experience in both Oregon and Washington Courts, having litigated numerous construction and real estate related cases to resolution, and has intimate knowledge of the nuances of a broad range of real estate transactions, from a straight-forward residential purchase and sale, to complex commercial transactions.

The information contained in this article is for informational purposes only and does not constitute legal advice. This information is not intended to create an attorney-client relationship, and the receipt or viewing of it does not create or constitute an attorney-client relationship. You should not act upon any information contained in this article without consulting an attorney for individual advice regarding your own situation.

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