I am a real estate law attorney is Mesa, Arizona and for this article, I am going to discuss what happens when property owners can’t agree how to deal with joint ownership issues. Let’s start by considering the following two scenarios, one more likely than the other:
- Derek and Jennifer meet, fall in love, get engaged and buy two acres of vacant land on which to build their dream house. However, a few weeks before the wedding date, Jennifer and Derek are watching a sporting event on television when Jennifer discovers that Derek cheers against Jennifer’s favorite team. Realizing she almost made a major mistake, she calls off the wedding. When she asks Derek to agree to sell the land so she can get her money back, however, Derek refuses, stating that he likes the land and still plans to build on it, even though he won’t agree to pay Jennifer for her share. He is, after all, an owner of the land, and he maintains he has the right to do what he wants with the property.
- Jason and Tony have been partners in various businesses and recently decided to try their hand at flipping houses. They purchase a new house in a community that was built on top of an old cemetery, but after conducting due diligence they are pretty sure that the graves were moved to another location. After purchasing the house, they send a contractor in to do some work, but the contractor reports back that the house is haunted by a poltergeist—apparently the graves were not moved. Although it seems the poltergeist is in fact friendly, Jason wants to sell the house as soon as possible (even if it means taking a loss), but Tony prefers to hold onto the house for a few years as he views the unique situation as a potential goldmine, with a profit to be made when the right buyer comes along.
Fortunately for Jason and Jennifer, there is a legal mechanism, known as a partition, which allows them to get out of their respective predicaments. Section 12-1211 of the Arizona Revised Statutes provides that an owner of real property “may compel a partition of the property between him and the other owners.” Although a partition typically refers to dividing into parts, it is clear that a house cannot be easily cut up in order to have each owner a fair share. Therefore, the statute also provides that, where a literal partition isn’t reasonable, the property may be sold, with each owner to receive the sales proceeds based on his or her respective ownership interest.
In the cases above, if the vacant land can be reasonably divided, then Jennifer can get her fair portion of the land and sell it, while Jason can keep his half for whatever purpose he chooses. Or, if the land can’t be divided easily, then the entire property can be sold, with Jennifer and Derek sharing in the proceeds of the sale. Likewise, with Jason and Tony—Jason can force a sale of the house, with the proceeds to be divided between the owners.
If you find yourself in a situation where joint owners of property cannot agree on what to do, then a partition action may be a viable solution for you as well. It is important to meet with an experienced real estate law attorney to discuss this option, along with other options that may be available to you. Please call me at (480) 833-1113 and I will be happy to assist you with your real estate law questions.