Our firm handles many partition matters. As discussed in prior blog posts, a partition action occurs when one (or more) co-owners of a property no longer wish to co-own the property. A partition action is a legal mechanism wherein a co-owner can petition the Court for an order to have the property sold, and the proceeds divided among the co-owners. Usually a Court-appointed Referee is responsible for selling the property, either through a public auction sale, or by hiring a real estate broker. The Referee will also determine, after hearing evidence submitted by the parties, exactly how the proceeds will be divided.
As the property at issue may be co-owned by several people, it is not always clear who is responsible for paying the carrying charges on the property, either before or during a partition action. For example, three siblings inherit a house after the death of their parents. They cannot agree on who should pay the mortgage and property taxes, and these obligations must be paid, regardless of the current dispute over the ownership.
Once this occurs, there may be a foreclosure action brought by the mortgage holder. All of the c0-owners would be named as defendants in such an action. In addition, if the property taxes are not paid by any of the co-owners, and the mortgage remains unpaid, the property taxes may be in arrears. In this situation, the entity to whom the taxes are owed may obtain a tax lien against the property. Often, these liens are then sold to a third party. This third party may then commence a tax lien foreclosure action against the property, and name all the co-owners as defendants in that action.