Understanding Partition Actions in New York

When people own property as tenants in common, they own it with other co-tenants and any one of them can force a partition (division) and sale of the property. For centuries, partition actions have had unfortunate consequences for many individuals trying to retain property. More recently, real estate investors used this tactic to their advantage by acquiring shares of property at well-below market rates; often, with the end result forcing owners to leave their family home. To help combat this, states like New York have passed a version of the Uniform Partition of Heirs Property Act (UPHPA). 

Tenants in Common

Family members can inherit property from a parent or other relative from a will or through New York’s

intestacy laws when the relative doesn’t have a will. The UPHPA only applies if the family members were left the property as tenants in common with their other family members. 

A tenant in common relationship is one where two or more individuals share the ownership rights in property. Each independent tenant in common is considered an individual owner.  For example, a father dies and leaves his home to his four daughters as four tenants in common, with each one owning a 25 percent interest in the house. Alternatively, they could own different shares. For instance, one daughter could be a tenant who owns 40 percent, and the other three daughter/tenants could each own 20 percent. 

Tenants in common have the right to pass down their own share of the property to any beneficiary in a will or trust; family members can independently sell their part of the ownership, or they can borrow against it. However, one tenant can’t sell their portion without the approval of the other owners unless the court issues a partition action. 

When Owners Don’t Agree

If there is disagreement about whether or not to sell the property, the owner that wants to sell may file a lawsuit for a partition. These types of lawsuits have grown in popularity due to an increase in property values and more siblings inheriting property they want to sell while their sibling/co-owners (often those living on the property) don’t. 

In these situations, (prior to the enactment of the UPHPA) many commercial real estate investors would buy a share of the property. Then the investors would request a partition action, which would result in family members being forced to sell their family home at an auction sale; these homes sell for much less at auction than they do on the open market. 

What the UPHPA Does

Although the owner still has the right to force the sale of jointly owned property, the New York legislature wants to ensure that family members have the opportunity to first buy out one another’s interest before selling the property to a third party. When families can’t agree as to whether or not to sell a property, they will need to attend a mediation session. The purpose of the mediation is to work out the issue before a partition occurs. If the owners can’t reach a resolution through mediation, then a New York judge may require the sale of the property through the open market, not an auction.  

New York Real Estate Lawyers

If own property with someone else and are having difficulty agreeing with them, then you might have to consider a partition action. Although this impasse may be difficult, talking to an experienced real estate lawyer can help you through the strain going through this process. That’s why it’s a good idea to get in touch with the skilled MOWK real estate lawyers. Let us answer your questions. Contact us today.