What is a Partition Action?

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Sometimes, co-owners of a property, such as family members, cohabitating couples, or business associates, are unable to settle conflicts between themselves when it comes to how the property should be handled. Disputes can arise regarding how to renovate, improve, or use the property. They can also occur when co-owners disagree about how a property should be disposed of — or when co-owners disagree on how to handle financial obligations, such as maintenance costs, property taxes, and mortgage payments. When negotiations break down and a compromise cannot be reached, a partition action may be necessary to resolve the issue.   

What is a Partition Action?

A partition action is the legal process of dividing real property co-owned by two or more individuals. These actions can be filed by any co-owner when an agreement cannot be reached regarding how the property should be managed or disposed of. The result of a partition action is a court order dividing or selling the property in order to distribute ownership separately to the parties involved. Importantly, only interests that are recorded generally need to be included in the partition action. 

When is a Partition Action Necessary?

There are a number of scenarios in which a partition action may be necessary. When multiple individuals hold title to the same parcel of land — and one or more wishes to sell their interests — it may be necessary to bring a partition action. These actions commonly arise in cases where children inherit property from a parent who has passed and do not share the same goals for it. For instance, some of the beneficiaries may wish to keep the property and rent it out, while others may want to sell it and split the proceeds. 

Partition actions may also be needed in divorce cases, or situations where an unmarried couple who jointly owns property parts ways and cannot decide how the property should be used. In addition, partition actions might be required when business partners who jointly own real estate dissolve their partnership and cannot agree on how the property should be divided. 

How Can Partition Actions Be Avoided?

Even after a partition lawsuit has commenced, the parties can reach an agreement among themselves at any time. However, there are several ways a partition action can be avoided from the outset. For example, a clear co-ownership agreement that details each owner’s rights, responsibilities, and expectations concerning the property can help to avoid a partition action. It’s also essential for co-owners to communicate on a regular basis to prevent misunderstandings that could lead to disputes — any changes to the property or financial matters in connection with it should be openly discussed. 

Co-owners who cannot agree on what to do with the property may decide that selling it and dividing the proceeds among them is the best solution. But in some cases, a buyout may be the best option to avoid a partition action. With a buyout, the remaining co-owners can purchase their share in the property if one co-owner wishes to exit. 

In the event a dispute arises concerning property division, it’s crucial to understand that litigation may not be the only option. Mediation or arbitration are two alternatives to litigation that can help co-owners reach an agreement regarding their property disputes outside the courtroom.     

Common Methods of Partitioning a Property in North Dakota

A partition action doesn’t always involve a forced sale of the property — there are three different methods that may be used to partition a property. Depending on the specific circumstances, a court may order the following types of partition actions: 

  • Partition by sale — A partition by sale allows a co-owner to force the sale of the entire parcel. With this method, the proceeds are distributed based on each owner’s share. This method is commonly used in cases where dividing the property into separate parcels would be impractical or result in financial hardship.                          
  • Partition by physical division — Also referred to as a “partition in kind,” a partition by physical division involves dividing the property into separate portions. This allows each co-owner to possess a designated equal share of the land. However, if the property is a single-family home or otherwise difficult to divide, a court may determine that a partition by sale or appraisal is a better solution.     
  • Partition by appraisal — Some states allow partition by appraisal, but not North Dakota or Minnesota unless it is specifically agreed to by the owners. A partition by appraisal divides co-owned property based on its fair market value. This method is best used when one owner wants to buy out the others and retain full ownership.   

To determine how the land should be partitioned, the court will typically appoint a referee to evaluate the viable options for division and assess the value of the property. This individual is often a certified real estate appraiser who will draft a report for the court. If it seems, based on the report, that the partition will not compensate each party equally, the court may order a party to offset the inequality with additional compensation.                  

Contact an Experienced North Dakota Real Estate Attorney

Partition actions can be emotionally charged and legally complex. It’s best to have a knowledgeable real estate attorney by your side who can best advise you and represent your interests. Located in Fargo, Fremstad Law offers reliable counsel for a wide range of real estate disputes in North Dakota and Minnesota, including those involving partition actions. We welcome you to contact us online or call 701-401-9220 to learn how we can assist you.