Many Owners, Many Problem: What to Do?
So what happens if two or more people own property and can’t agree on how to manage it, or what should be done with it? Under Massachusetts law, the remedy for that problem is known as a petition for partition. The term “partition” means the selling of the property. But there’s more to the process than meets the eye.
In a partition case, someone known as a “commissioner” is appointed to market and sell the property. In most instances this requires the commissioner to hire a real estate broker.
The real “action” in partition cases is usually in two areas: (a) questions relating to adjustment of the sales proceeds; and (b) questions of whether one owner will buy out the other(s).
Expenses present a challenge all their own. The law provides that the proceeds from the sale of partitioned property can be adjusted to reflect the expenses that each owner contributed to the property. But what if one of the owners lived at the property rent-free and paid the lion’s share of the expenses?
You would think that that owner wouldn’t get the benefit of both worlds and that an expense adjustment would not be appropriate in that circumstance. Here’s where the law and logic do not necessarily walk hand in hand.
An owner who both pays expenses and lives exclusively at the property can in fact have an adjustment of the sales proceeds in their favor. However, that can only occur if the owner was permitted to live their without objection by the other owner(s). If at any time the other owner(s) demonstrated an intent to live there, or wanted to displace the “resident” owner with a tenant, then the resident owner cannot “double dip”, and the proceeds of the sale must be adjusted to reflect the fair rental value of the property.
Many partition disputes also become involved with questions of whether one owner can or should buy out the other(s). Depending on the court where the partition case is being heard, this may or may not be a solution promoted by the court.
Partition cases can be filed in either the Land Court or the Probate Court. Land Court judges are (to their eternal credit) constantly focused on practical solutions to partition cases, and conduct periodic “check-ins” with the attorneys to assess whether a buyout may be accomplished. Probate Court judges, who command a much heavier load of cases, are less involved in that process. For this reason I nearly always want to file a partition case in the Land Court.