Co-ownership of property among family members or unrelated parties is common in Maine. While co-ownership can make property more affordable, problems often arise when the owners cannot agree on use of the property, how to allocate the costs associated with maintenance and/or improvements, or if/when to sell the property.
When co-owners cannot resolve property disputes amongst themselves, a co-owner has the right to seek a partition of the property through the court system. Depending on the form of partition action initiated, the court will order the physical division of the property (also known as a “statutory partition”) or order an equitable resolution, such as a timeshare or buyout (an “equitable partition”) to resolve the dispute.
Physical/Statutory Partition
Statutory partition pursuant to 14 M.R.S. § 6501 is only appropriate in situations where the property at issue can be physically divided among co-owners.
In order to initiate a statutory partition, a co-owner must commence the action in the Superior Court or District Court in the county for which the property is located. The partition action must include all parties who may have an interest in the property; including all co-owners, as well as individuals or entities that may have an easement, right of way, or other encumbrance or interest in the property.
If a statutory partition is ordered by the Court, the Court will appoint 3 to 5 disinterested individuals to serve as commissioners. The commissioners are tasked with making a partition recommendation by majority decision and issuing a written report to the Court. The Court will then either confirm, reject, or ask the commissioners to reevaluate their decision.
The Court also has the ability to order the parties involved to share the costs associated with the partition action or order one party to be responsible for all costs. If the final division of the property is not equal, the court may order the party with the larger share to proportionately compensate the party or parties who received the smaller share.
Once the Court confirms the commissioners’ report and a judgment is entered, the judgment is conclusive to ownership rights. However, it is important to note that the final judgment may be vulnerable to collateral attack by interested persons who were not joined in the initial lawsuit for up to three years after a partition judgment is final.
Equitable Partition
Maine courts also have the authority to order an equitable partition in cases between co-owners of real property pursuant to 14 M.R.S. § 6051(7). An equitable partition is appropriate in circumstances where the physical division of property is impractical or would seriously injure the rights of the other co-owner(s).
In general, the procedure for an equitable partition is more flexible and the Court has broad discretion to fashion relief that includes, but is not limited to, ordering the sale of the property and dividing proceeds among co-owners, awarding the property to one co-owner with the obligation that he or she compensate the other co-owner(s) for his or her or their share, the establishment of a time share schedule, or any other appropriate non-physical division.
When partition is accomplished by sale, the Court will consider the contributions of each owner when determining how to divide the sale proceeds. This includes the amount that each owner spent on improvements or monies spent to maintain the property. A co-owner may also be entitled to reimbursement if he paid a larger portion of mortgage, taxes, insurance, or other necessary expenses.
If you are considering a partition action, it is best to consult with an attorney to determine which form of action to pursue. If you would like assistance in evaluating a potential partition claim, contact Perkins Thompson by phone at 207-774-2635.