Co-owners do not always agree on what they should do with the real estate that they have purchased together. This could happen when two people are working together as investors, for example. It could also happen when two people are getting divorced and jointly own a home. They have to figure out what to do with that real estate, and they both have a right to make the decision.
If they cannot come to a solution on their own, then the court may be forced to use a partition action. What is this and how is it going to impact the case?
Dividing real estate assets
Essentially, a partition action is one way that the court can help people divide assets if they can’t find a way to do so on their own. Real estate itself cannot usually be divided between two individuals, and the only solution is to sell that real estate and split the money. A partition action is a legal action the court can take to force the sale and then help the individuals divide the money that they earned.
This does not mean that it is always going to be a satisfactory solution for both sides. For instance, perhaps one investor thinks that the market is at its peak and wants to sell, but the other investor believes they will make far more money if they sell in the future. Forcing a sale at the time could make that second investor feel that they are still losing out on some of the financial assets that they would have earned.
However, the court does not always have another solution to split up an asset between two people as they go their separate ways. That’s why this can get so complicated and why those involved need to make sure that they understand all of their legal options.