The Dilemma of Jointly Owned Real Estate
All too often, parents with good intentions leave real estate to multiple children as co-owners. This can be done through lifetime gifting (i.e., through a quit claim deed) or upon death through a transfer on death deed, by will or by trust. Unfortunately, this strategy often creates family feuds when some siblings wish to keep the property and others wish to sell. Further, when some siblings won’t (or are unable to) cover their share of the costs involved in the maintenance and upkeep of the property, the others will understandably become resentful over time.
Provided all owners can come to an agreement, the division or sale of the property can be arranged on a voluntary basis. However, if all owners are unable to agree, a judge can order a partition of the property based on a single owner’s request when he or she files a lawsuit known as a partition action. Depending on what the judge determines is most appropriate under the circumstances, this can result in either a partition in kind where each owner ends up controlling an individual, divided portion of the property or a partition by sale where the entire property is sold and the proceeds are divided equitably among the owners.
A partition action can be costly and typically takes more than a year to conclude. Therefore, if you are having disagreements with your siblings (or other family members) regarding jointly owned real estate, it is typically best if you can work out these issues outside of a courtroom. However, if you have come to an impasse, a partition action might be your best option.
Of course, parents can avoid this unfortunately situation for their children entirely through proper estate planning!