When married persons own real property together and they divorce, the Superior Court will determine what happens to the real property as part of the overall equitable division of assets. But what happens outside the context of a divorce when two or more people (or even business entities) own real property together, and there is a dispute about what to do with the real property? Unless the parties can agree on how to proceed, the law provides for a partition lawsuit whereby real property is either physically divided between the co-owners (which is usually infeasible) or sold through a Court-supervised auction or via a private sale or buy-out if certain conditions are met.
Co-owners of real property in Connecticut have an absolute right to partition. However, practical problems can arise when there is a significant mortgage or other encumbrance against the property. Also, it is often the case one owner wants to maintain the status quo or keep living at the real property, and the other owner wants to either get bought out or sell to a third party at the highest possible price. Once a partition action is commenced, the parties will often cooperate regarding a private sale of the property, as that is in all parties’ best interests. After expenses of the sale are paid, the court will equitably divide the net proceeds of the sale between the co-owners. Where one owner has made improvements to the premises or otherwise shouldered more of the burden with regard to taxes, insurance, and other expenses associated with the property, the Court may award that owner more than fifty percent of the net proceeds.
If you would like more information on this topic, please contact Attorney Tim Herring at (203) 902-4882.