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Partition Lawsuits in Tennessee: Practical Considerations

Where parties own real property jointly, and one party has announced his or her intention to sell, the most sensible approach for the other owner or owners to take is to cooperate with the owner who wants to sell.  If co-owners can cooperate, they can save themselves attorneys’ fees and a substantial amount of hassle.  The key agreements which co-owners must reach are the agreement on the terms of the sale and the agreement on how the net sales proceeds will be divided.

Many times, it is not possible for co-owners to agree on how to go about selling the property. The reasons are many.

Once I take on a partition case, I will first try to determine whether any type of agreement can be reached regarding the sale of the property before I file a partition lawsuit.  In most cases, by the time I am hired, there is no hope of agreement between the co-owners, at least until a partition action is underway and the other co-owners are forced to accept the reality of the situation.

The second thing which I do is to try to determine if my client is owed money in addition to the amount to which my client is entitled to just for his or her ownership interest.  For example, where my client is a 50% owner, he or she may be entitled to more than 50% of the net sale proceeds for any number of reasons, including: my client paid more than the other owner towards the property for a down payment or for mortgage payments, taxes or maintenance; my client was not given his or her fair share of rent or other proceeds derived from the property; or, the other owner used the property without paying rent.

If I determine that my client is owed more than his or her share of the net proceeds, I will include a claim for that in the partition lawsuit.  In many cases, after the partition lawsuit is filed, I will send requests for documents to the other owner to force him or her to produce financial records that may help be prove my client’s claim.  If necessary, I will issue subpoenas and take depositions or subpoena records from banks or other financial institutions.

Typically, the things that co-owners need to agree upon in order to proceed with selling the property are:

  • The person or agency who will sell the property
  • how the property will be sold, whether by listing it with an agent or auctioning it
  • if the property is to be listed, the terms of the sale, including the initial asking price, the minimum price at which the property will be sold, and how long the property will have to be on the market before the minimum price is accepted
  • the commission to be paid and the other terms of the listing agreement

It is possible, and generally advisable, to proceed with trying to sell the property even if the co-owners disagree about how the proceeds from the sale will be distributed.  This can be accomplished by the co-owners agreeing that the proceeds from the sale of the property be deposited with the court clerk and that they not be released until the court has entered an order as to how the proceeds should be distributed.

By reaching such an agreement at the outset, the sale of the property does not have to wait until the court has resolved any dispute among the co-owners about how the proceeds should be divided.  While the property is being sold, or after, the court can hear and resolve any dispute about how the proceeds will be divided.

In cases where the parties cannot agree about how to sell the property, I will file a motion with the court asking the court to order that the sale be conducted in a particular way.   How a court will resolve a situation where the co-owners cannot agree on how to sell the property will depend on the particular facts of the case including whether a co-owner is just trying to be obstreperous by not agreeing or whether he or she has a real estate agent or auctioneer with a different opinion about value or one who is willing to handle the sale on different terms.