What is suit for Partition in Florida?

Attorney Tom Olsen: Where are partition actions used here in the State of Florida?

Attorney Caleb Maggio: They're used in a scenario where multiple people own real estate or personal property and you have a scenario where some owners may want to actually sell, liquidate that asset, some owners want to hang on to it, and so the owners that want to sell that asset can actually force the sale of that asset with a partition lawsuit.

Tom: Caleb, I can think of some situations where I've seen that arise, and that is one is that a boyfriend, girlfriend bought a piece of property, guess what, they split up and one has moved out, and the one that's moved out certainly want to have their share of the equity in that property. Another situation is that mom and dad have passed away and the four kids have inherited that property, and one of the kids lives in the home and wants to continue to live there, but the other three kids, they want to sell the home and get their share. Both those situations, the parties cannot work it out and get it done. That's where they need to see an action, a lawyer, and start the partition action.

Caleb: That's right, Tom.

Tom: Now, Caleb, I've never heard about this using it for a personal property because I've had a lot of people over the years call me and say, "Tom, I bought a car with my son, my girlfriend, we co-own a car, and they're not making payments on the car, what are we supposed to do? Is that a partition action?"

Caleb: That's right, Tom. Personal property under the statute can be partitioned, so you're looking at things like vehicles, boats, motorcycles, anything like that.

Tom: Caleb, we're talking about partition actions and the forced sale of a piece of property where multiple owners own a piece of property. One wants to sell, others don't want to sell. A suit for partition, the court will order that the property be sold. Of course, back in the old days, if we're talking about acreage, the court could have ordered that the property literally be divided. Each kid gets 10 acres, but these days, we're talking about a home, you can't divide that down the middle, so the court will order that the property be sold. If your client hires you to begin a partition action and you start it, you file the action, you serve the other parties, can the other parties somehow defend it or stop that partition action?

Caleb: Tom, as far as stopping the partition action, there's really only two ways that a defendant can stop the forced sale of that property. The first way is if they can show that you actually do not have title to the property, you being the person that's moving for the partition. That's almost never going to happen. The second way is if they can show that you, by agreement, had previously waived your right to file the partition, which, again, is just not something you see very often, but if you did make that agreement for some reason in the past, no, you're not going to be able to make that partition now.

Tom: Could that be an oral agreement or it must have been in writing?

Caleb: It could be oral, Tom.

Tom: That would be unusual circumstances. We're talking about a suit for partition. The court will order that the property be sold. Caleb, from a practical point of view, how does that sale go down? Traditionally, maybe it happened on the courthouse steps at an auction, but it's probably something more modern is happening these days.

Caleb: Right, Tom. You can get to that point where you're having an auction, but typically, what happens is the parties are either going to agree to list the property with a specific broker and agree to some terms, or the court is going to appoint a magistrate to do those things for you. At the end of the day, if everyone's being very, very difficult, then that property could be sold at auction, but typically, you can avoid that these days.

Tom: In a partition action, when it comes down to the final sale, either the parties have agreed or the magistrate has chosen who the real estate broker is going to be, do they also dictate about what the listing price is going to be and ultimately what the sale price would be?

Caleb: That's right, Tom. If the parties cannot agree to a listing price, the court is going to get an appraisal done, and that appraisal is going to be the value you use for that sales price.

Tom: If the property gets sold, what happens to the net sale price? After they pay the closing costs, after they pay the broker's commission, what happens to the sale proceeds?

Caleb: Tom, you pay, like you said, the costs. You pay typically attorney's fees from that amount, and then the general rule is that each owner is getting a percentage of the remaining proceeds in proportion to their ownership interest.

Tom: If there are four parties and two of them have lawyers involved, are both lawyers getting paid out of the sale proceeds?

Caleb: That's right, Tom. The statute is unique in that it actually allows for the parties to share in the costs of the legal proceeds. The court's going to determine what is the fairest way to pay those fees. Do they take them equally from everyone's share, or do they take more from others' share? They're going to use equitable principles for that.

Tom: Then what happens if one of the parties said, "Hey, yes, I agree, I own this piece of property with you, but at the moment we bought it, I put down $50,000 on it. You did not. You didn't come to closing with any money." How is that party going to get their $50,000 back?

Caleb: Tom, if you put somebody's name on the deed at the time of the purchase and you paid the purchase price, it is presumed that it's a gift unless there was an intention otherwise. The court will come in and impose a constructive trust if it was not intended to be a gift, if there was going to be some quid pro quo or something of that nature. At that point, then the court will grant you the purchase price back in addition to the percentage of the proceeds that you're entitled to via your ownership interest.

Tom: Then what about the situation where maybe the parties got into the home with equal amounts down, but over the years, only one of the parties has paid the mortgage, taxes, insurance, et cetera.? Are they going to get more of the sale proceeds?

Caleb: Yes, Tom. That's what we call a credit. If one party is contributing disproportionately to the costs of maintaining the house, paying the mortgage, insurance, and things like that, they can make up for that in the proceeds of the sale of the house.

Tom: The point about that is when it comes to dividing up the money, it is not necessarily equal. The court has the ability to award special equities and say, "Look, first thing we're going to do is we're going to pay the attorney's fees and court costs off the top. Next thing we're going to do is we're going to reimburse one of the parties for special equity that they may have gotten over the years. After that, we split it all up."

Caleb: That's right, Tom. The most typical way that happens is typically boyfriend and girlfriend have a house, break up, and say boyfriend remains in that house and girlfriend leaves, boyfriend keeps on paying the full mortgage. Boyfriend's going to get a credit for 50% of that mortgage because he theoretically has that 50% interest, but he's paying 100% of it.

Tom: Caleb, in my 40 years of law practice, I've written a lot of letters to other parties where we threaten the suit for partition, and that threatening letter, it says, "Hey, if you make us do this, you're going to have to share an attorney's fees and court costs." Usually, people realize there's no defense to it, there's no stopping it, might as well cooperate and get it done, but it seems like in the last few years, those letters have not been working, and therefore, we have been required to actually file the legal partition action.

Caleb: Tom, some people are difficult about it, and a lot of times the threat of a lawsuit is not enough these days, but filing the actual lawsuit is, a lot of times, as much threat as you need for that other party to really start cooperating with you because, at some point, they realize, "Okay, I'm going to have to go get an attorney and pay them a considerable sum to defend this thing to the end, so why don't I just make some concessions here?"

Tom: Sometimes the parties realize, "Hey, I agree, we're going to have to sell this property," but the dispute comes in about how we're going to divide the monies. Who's lived there longer? Who's not lived there? Who's been making the mortgage payment? Who put up the down payment? Who paid to put the pool in the backyard?

Caleb: Right. Improvements, Tom. That's a good thing to discuss. If you made improvements to real estate with your own funds, you can get a credit on the proceeds of the sale in proportion to what that improvement increased the total market value. If you spent $10,000 on a pool, Tom, you're not getting $10,000 back, but if the pool increased the market value of the home by $5,000, you're getting $5,000 back on that sale.

Tom: Necessarily equal, the court has the ability to award special equities and say, "Look, first thing we're going to do is we're going to pay the attorney's fees and court costs off the top. Next thing we're going to do is we're going to reimburse one of the parties for special equity that they may have gotten over the years, and after that, we split it all up."

Caleb: That's right, Tom, and the most typical way that happens is typically, you boyfriend and girlfriend have a house, break up, and say boyfriend remains in that house and girlfriend leaves. Boyfriend keeps on paying the full mortgage. Boyfriend's going to get a credit for 50% of that mortgage because he theoretically has that 50% interest, but he's paying 100% of it.

Tom: Caleb, in my 40 years of law practice, I've written a lot of letters to other parties where we threaten the suit for partition, and that threatening letter, it says, "Hey, if you make us do this, you're going to have to share an attorney's fees and court costs." Usually, people realize there's no defense to it, there's no stopping it, might as well cooperate and get it done, but it seems like in the last few years, those letters have not been working, and therefore, we have been required to actually file the legal partition action.

Caleb: Tom, some people are difficult about it, and a lot of times, the threat of a lawsuit is not enough these days, but filing the actual lawsuit is, a lot of times, as much threat as you need for that other party to really start cooperating with you, because at some point, they realize, "Okay, I'm going to have to go get an attorney and pay them a considerable sum to defend this thing to the end, so why don't I just make some concessions here?"

Tom: Sometimes the parties realize, "Hey, I agree, we're going to have to sell this property," but the dispute comes in about how we're going to divide the monies. Who's lived there longer, who's not lived there, who's been making the mortgage payment, who put up the down payment, who paid to put the pool in the backyard?

Caleb: Right, improvements, Tom, that's a good thing to discuss. If you made improvements to real estate with your own funds, you can get a credit on the proceeds of the sale in proportion to what that improvement increased the total market value. If you spent $10,000 on a pool, Tom, you're not getting $10,000 back, but if the pool increased the market value of the home by $5,000, you're getting $5,000 back on that sale.