There are many ways to own property jointly in New Jersey, In some instances, if owners cannot agree to how to handle a property, a partition action may be the only option to resolve the dispute. When deciding to own property with another person or people, you should carefully consider what arrangement works best for you and the other parties involved. In the unfortunate event that one owner dies, the other property owners should be prepared for how that will impact their agreement.
What is Partition Action?
A partition is a legal action taken that divides real estate property between people. This may occur when co-owners of property share it through tenancy in common or as joint tenants. On the other hand, tenants by entirety cannot be partitioned.
Partition may occur for a number of reasons: from disputes between the co-owners, to the death of one of them. Sometimes partition means that the property will be sold and the profit split between the owners as designated by the partition action. Alternatively, one owner may be given the chance to purchase the full property from the other owner(s).
Tenancy in Common vs. Tenants in Entirety
As mentioned above, partition actions can be field for property owned as tenancy in common. On the other hand, it cannot when property is shared as tenants by the entirety. So, what is the difference between these two arrangements?
Tenancy in common is an arrangement in which all owners have equal rights and ownership over the shared property. Tenancy by the entirety can only occur between two married people. The major difference between these agreements is what happens when one of the owners passes away. In tenancy in common agreements, the ownership would not go to the existing owners. Instead, it would go according to the Decedent’s will, or intestacy.
If the Parties Cannot Agree, Partition May be The Last Resort
When the owners cannot come to an agreement on the sale or use of a property, a complaint for partition is normally the last available option. It may be one person is residing in the property and refuses to leave, or they do not have the funds to buy out the other owners. Financial situations may change or there may be a dispute over what value the property has, or should sell for. In any event, if you own a property with another person and they refuse to sell or buy out your interest, a partition is a legal right in New Jersey, with only limited exceptions.
If you have questions about filing a partition action or other dispute regarding any residential or commercial property you own, please contact Ward, Shindle & Hall for more information.
