When title to land is disputed or co-owners of real property can’t agree on what to do with it, the next step is often filing a partition action—a lawsuit brought by one of the parties asking the court to sort matters out.
What can a court do in a partition action?
In Colorado, partition actions are governed by a set of statutes that allow anyone with an interest in the property to petition the court. The court will appoint one or more commissioners to either divide the property or sell it in a public sale and split proceeds among owners. Alternately, parties may specifically request that the court order a sale.
In partition actions, Colorado law favors dividing up real property so that its parts may be separately owned by the interested parties. Some situations, however, such as a single family residence, don’t allow for dividing the property, and in those cases, a sale is the only viable option. Also, if the court finds “manifest prejudice” would occur with partition, a public sale is the appropriate remedy.
Note that everyone with an interest in the property—including lenders—must be party to the lawsuit, otherwise a final adjudication could be delayed until all interested parties are added.
When may a partition action be necessary?
Circumstances surrounding partition actions vary, but some of the most common situations involve unmarried couples, relatives who jointly inherited property, and friends who bought investment properties together.
Another common scenario, particularly in rural areas, is a dispute over the ownership of land that no one has maintained for years.
Partition actions can be complex and get contentious fast, so you’ll want an experienced attorney on your side to make sure your interests are well represented. Give us a call at 303-962-2690 or send us a message today if you are involved in a partition action.
Division of Proceeds in Colorado Partition Actions
In Colorado, any party with an interest in real property can file a partition action and request that the court decide who owns the property. Then, the court will rule on if the property should be divided between the claimants. If the property cannot be divided, then it will be sold outright, with the proceeds similarly divided. But then the next question is how to divide proceeds of the sale.
Many people mistakenly believe that sale proceeds must be divided equally. However, the court is required to make adjustments in the interest of an equitable resolution—that is, the court’s goal is to make sure everyone gets a fair share. Therefore, an equal split may be appropriate in many situations, but it isn’t required.
To aid the court in its decision, the parties present evidence to show why they deserve a larger share of the sale proceeds. First, the court considers the parties’ ownership interests in the property. For example, if the owners hold the property as “joint tenants,” each have an equal ownership interest. However, if the owners are “tenants in common,” the respective ownership shares may be based on a contractual agreement, which may or may not be 50/50.
From there, the court will take into account each party’s contributions to the property, including renovations, maintenance or payment of expenses. Regarding renovations and maintenance, the court usually looks at the increase in property value, from these expenses, rather than just how much the work cost, in the first place. of the work.
Note as well that any outstanding taxes, mortgages and other debts, usually come off the top of the sale proceeds before the remaining amount is split among the interested parties.
If your property rights are at stake in a partition action, you don’t want to let another day go by without knowing where you stand.
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