Property Partition Actions in New York State

Often in New York, property is jointly owned by two or more individuals or legal entities, such as corporations. This can happen with both residential property and commercial property. One of the major causes of joint ownership of property can occur when the original owner passes away and leaves the property in their will to their children, or other multiple owners. In addition, there can be situations where two or more individuals buy property jointly, and then one of those individuals transfers their interest in the property to another person.

In the case of residential property, conflicts can arise when there are multiple owners of property. It may be that one of the joint co-owners lives at the property, and the other does not. In that case, the person who lives at the property is usually responsible for the upkeep of the property, including routine maintenance, as well as paying the costs and expenses of the property. These costs and expenses can include property insurance, utilities such as electricity and heating, and property taxes. However, the person living at the property also derives the benefit of living at the property without paying rent. The non-occupying party may not agree to be financially responsible for a property in which he does not live. Having co-owners who do not both live at the property can be an inherent source of conflict.

Where the property is commercial in nature, there can be similar conflicts, although of course no one is living at the premises. If the property was purchased as an investment, the joint owners may not agree on the proper time, if at all, to sell the property. There can also be disagreements as to the type of commercial tenants to seek for rental of the property, the length of the lease to offer to potential tenants, as well as other lease terms.

Legally, a disgruntled co-owner may bring a partition action against his fellow co-owners regarding the property. A partition action arises when the owners cannot agree as to the management of the property. The disgruntled owner is asking the Court to resolve the conflicts between the owners.

There are several remedies which the Court may order. The first is the complete sale of the property by a Court appointed referee. The referee will sell the property, and then divide the profits between the owners, based upon their ownership interest. The referee will also allow the parties to submit their expenditures regarding the property, and will give each owner credit for the amounts they spent on property maintenance. Obviously, this process can be costly and time consuming, and the referee and other parties retained by him, such as a real estate broker, must be compensated by the litigants for the work performed in marketing and selling the property.

Another option is that, after a partition suit has been brought, one of the owners agrees to buy the interest of the other owners. An appraisal should be obtained for the property to insure that a fair price is obtained for the partial ownership interest. This solution is best when one co-owner wants to keep the property, but the other co-owner no longer wishes to retain their interest. Of course, problems can arise when the parties cannot agree on a proper price for the partial ownership interest. A neutral third party such as a mediator or Judge can be of assistance in helping the parties reach an agreement on this issue. Our firm has found that the Settlement Part in Westchester Supreme Court to be very accommodating in assisting the parties in reaching an agreement on the disposition of the property.

If the parties cannot agree, the Court will generally order the property to be sold and the proceeds distributed among the owners. Therefore, if one party wants to retain ownership, it is in their best interests to negotiate an agreement where said party purchases the interests of the other owners. Our firm has vast experience in negotiating partition agreements and in navigating the litigation process on behalf of all interested parties.