Right of Partition

When you own land with someone else and you stop getting along with that person, what can you do? Especially when someone owns a large piece of investment property with someone else, it can be very difficult to figure out how to work with someone who doesn’t want to spend the money to keep the property up or who doesn’t have the same vision as you do for the future of the property. Here are two ways that you can handle a real estate dispute with a co-owner:

1. A Written Agreement Between the Parties

The most obvious and best way of approaching a problem like this is a written agreement with your co-owner that clearly lays out the responsibilities of each party. Whether the property is making money or not, a written agreement can help to clarify how much money each party is required to put into the property and how profits will be split up. 

You might think that a 50/50 agreement is the simplest way to handle something like this but often, it’s not. Perhaps one party is willing to make the financial investment into the property to clean it up or improve it, but expects a higher percentage of the returns in exchange. And what do you do if one party wants out during an up year for the property? How much do you have to pay them? Can one owner force the other to take a fair buy-out offer?

Drafting a clear agreement means thinking about possibilities that you may not want to consider, but in our experience, figuring this out now will save you pain and money down the line. Indeed, just having an agreement sometimes helps avoid breakups and keeps all parties involved happy with the investment that they’re making in the property.

2. A Partition Action

Unfortunately, many parties don’t start talking about these issues until a conflict has already arisen. If you’re in this boat, don’t panic! There is still a legal way to get out of the situation. In this case, you can either divide the property in two, or have a court order that it be sold and have the profits of the sale split between the owners.

How do you split a property in two? You can do this by reviewing the technical drawings for the buildings or property and agreeing to a line drawn through the property along an appropriate dividing line. In some cases, the parties can agree to give a valuable but small piece to one side and leave a larger but equally valuable piece to the other party. This process typically involves lawyers, appraisers, real estate agents, and brokers to find the proper balance.

But in many cases, the best remedy is for the parties to agree to sell the property. But what if the other party doesn’t want to sell? What if they think that the status quo is working out just fine? Or, what if vindictively, they just want to keep you from benefiting from the property?

In that case, you can petition a court for an order to sell the property in lieu of having it partitioned. In other words, if you prevail in proving that the property is not going to be usable or valuable if it’s split in two, you can have a court order the property sold the open market. At that point, they’ll usually come to the negotiating table. If they want to keep the property, they’ll have to put up fair market value for your half.

Trust an Experienced Real Estate Attorney with Your Concerns

If you have a problem like this with real estate, you should contact an experienced real estate attorney. Partition actions can be complicated, and there are many issues to consider. If you have questions about your situation, contact Cornerstone Law Firm, and let’s discuss how we can help you.

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Time to File a Property Tax Appeal?

Wise management of real estate requires owners to periodically check their tax assessments to ensure they are being assessed correctly. You pay taxes based on the “assessed” value of your home, so ensuring correct assessment can lower your tax liability each year. This applies to both homeowners and owners of commercial property.

There are several times that your property can be reassessed. First, you may have just recently purchased property and based on the purchase price, you may realize that the assessed value, when factored by the common level ratio, is showing an assessed price based on a market price which is significantly more than you paid for the property. If this is the case, your property is ripe for a tax assessment appeal in order to lower your taxes. Another time to consider filing an appeal is when there has been a recent condemnation of part of your property or there has just been a general downturn in the market from when the property was last assessed. In addition, every year, you have the opportunity to file a tax appeal from July 1 to August 15 (the must be received by then).

While the end goal for a tax assessment appeal is to lower the tax liability, it is also important to note that a lower tax liability may make the property significantly more rentable or make it more attractive to buyers at a higher price.

Prudent property owners conduct a periodic or annual review of their real property holdings to find out if they are being properly assessed. Should you have an interest in filing a tax assessment appeal, please contact Cornerstone Law Firm for assistance.