The co-ownership of real and personal property can have many benefits to the parties. But when there is discord and the owners cannot agree on the use, improvement, or disposition of the property, all states have laws that permit the remedy of partition.
Most cases of partition involve real property. Persons can own property as tenants in common or joint tenants. As common owners of the property, they have equal rights in the use and enjoyment of the property. Partition statutes allow those who own property in common to sever their interests and take their individual share of the property.
Partition may be either voluntary or compulsory. Voluntary partition is when the cotenants (owners) divide the property themselves, usually by exchanging individual deeds. Each co-owner owns a part of the property and ceases to have an undivided interest in the whole. The parties can also provide for the sale of the property and divide the proceeds among themselves.
When the co-owners cannot agree on the value of the property and their rightful shares, they may select a disinterested third person, such as an arbitrator or an appraiser, to divide the property and to allot the shares. A voluntary partition by all the co-owners is legally effective unless there is a contractual challenge to its recognition. These challenges include allegations of Fraud or unconscionability, or the allegation that the parties are seeking to defraud a third party by agreeing to the partition.
When the co-owners cannot agree to a voluntary partition, a lawsuit to compel partition can be filed to sever property interests. Unless there are exceptional circumstances, a tenant in common or a joint tenant has the absolute right to seek a compulsory partition. Partition must be made even if every other owner objects to it. The motives of the party seeking partition are irrelevant, and the court that hears the lawsuit has no discretion to deny partition. Its main function is to determine the method of executing the partition. Commonly the court will order the property sold and the proceeds divided, instead of ordering a physical partition of the property. If the title to the property is put into issue, most states permit the court to resolve this issue as well as the partition.
Both real and personal property can be subject to compulsory partition. Real property that can be subject to partition includes a building, a story of a building, the land on which a building rests, or the surface of land where there is an oil or gas lease.
Similarly, personal property can be subjected to compulsory partition. The fact that the property is owned in unequal shares does not affect the partition. The right has been enforced with respect to a cashier's check payable jointly to those who share a Tenancy in Common, promissory notes, shares of stock in a corporation, and stocks of merchandise.