Explained by a NJ Partition Lawyer: Partitioning Real Estate in NJ: When Co-Owners Don’t Agree
What is a New Jersey Partition Action?
When co-owners don’t agree on what to do with the property, a New Jersey partition lawyer can help bring a partition action that can be used to divide the property into separate lots or, most often, have the property sold to divide the proceeds equitably or have one side buy the other out at a fair price. It is best when this is done voluntarily, with the agreement of all co-owners. If a co-owner does not agree to what is happening with the property they partially own, they can file a partition action lawsuit in New Jersey.
The word “partition” means to divide into parts. A partition action in New Jersey refers to the division of property among co-owners, or, most of the time, the actual sale of the property resulting in the division of the funds received from the sale. A New Jersey partition action is a lawsuit that is used to divide or sell real property owned by two or more co-owners when one or more owners do not agree to the sale or splitting of the property or the general management of the property, such as maintenance, how it is used, and who is responsible for it. The court may order partition through actual division or through the sale of real estate.
Types of Partition in New Jersey
Partition in Kind (Physical Division):
Dividing property is rare and normally only applies to vacant land. When an actual physical partition is ordered, this is called “Partition in Kind.” An example of dividing property would be if two brothers owned 1000 acres of farmland together. If the land is equal in value throughout, it would not be hard for a judge to appoint a commissioner to divide the property equally between the brothers, but if they are not happy with the proposed division, then sale of the property is an option where the judge could allow one side to buy the other side out or have the property sold on the open market and the profits split between the brothers.
Partition by Sale:
An example of selling property would be if the property cannot be easily divided, such as a one-story house. It is hard to evenly divide a house, so the house would be sold and the money divided between the owners. Partition by sale is the most common form of dividing property, as most properties cannot be physically divided when they include a home or structure on the land.
Where is a New Jersey Partition Action Lawsuit Filed?
When partition is the only cause of action, a New Jersey partition action lawsuit is filed in the Chancery Division, General Equity division of the Superior Court of New Jersey in the county where the property is located. NEW JERSEY COURT RULE 4:3-1. Divisions of Court; Commencement and Transfer of Actions (2024)
Family-Related Partition Actions
If any other form of relief is sought that affects the family or family-type relationship, such as divorce, termination of domestic partnership, dissolution of civil union, spousal support, child support, custody, parenting time, property distribution, or palimony, the matter shall be filed and heard in the Chancery Division, Family Part division of the Superior Court of New Jersey, generally where the family resides. A property could be in Hudson County, but the family resides in Monmouth County. Monmouth County would take precedence for the court to hear the matter.
Who Can Seek a Partition Action in New Jersey?
Any co-owner(s) may seek a partition of property, as long as he or she has not previously waived his or her right to do so or is prohibited by contract (even in these cases, it still may be possible to file a partition action). Two or more people can own a property together, and it can be held in different ways.
Types of Co-Ownership
Co-owners such as:
- Tenants In Common (TIC)
- Joint Tenants
- Joint Tenants With Rights of Survivorship (JTWRS)
- Heirs of an estate
- Members of a joint venture (this includes a boyfriend and girlfriend when they buy a house and do not formalize their agreements and eventually separate and have to involve the court to divide their interests). See ALENA KOLEGAROVA v. EDWARD SKUBINSKI
Business and Partnership Disputes
Many times, business owners, partners, friends, including boyfriends and girlfriends, may also find themselves in the need to file a partition action, and especially family members, which we will get to shortly. Often, this type of joint property ownership can result in disputes not foreseen during happier business times when the property was purchased, whether it is commercial property or vacant land, and everyone thought problems would never arise.
Business partners do not always iron out how a property will be managed prior to a purchase. Some partners may value long-term appreciation, while others may want to take out as much profit as soon as possible. These conflicting goals make it difficult to prioritize or agree on the cost of maintenance, or when to pay for improvements to the property, or even an agreed-upon time to pay taxes. For example, one group of co-owners may want to cash out by selling a property, but the other co-owner group can’t afford to buy them out or does not want to sell, as it is a long-term investment for them.
Can Family Members Seek Partition in New Jersey?
Any family member, including parents, children, aunts, uncles, cousins, nieces, nephews, in-laws, and grandparents, can bring a partition action lawsuit in New Jersey if they own or have an interest in real property.
Common Family Disputes
Family disputes often arise that no one ever thought would happen when money and property are involved, that were not anticipated when people bought the property, or the property was left through an inheritance to family members.
Family disputes may also center around:
- Who should live at a property
- Who is responsible for repairs and maintenance or paying for the general upkeep
- Who is responsible for paying the mortgage and taxes
Disputes such as these can create substantial family turmoil.
Real-World Example
As an example, imagine one sister out of 4 siblings was caring for an ailing mother in the family house for 10 years before the mother passed away without a will. Under New Jersey’s intestate laws, all of the children will now inherit equal shares of their mother’s home. The person living in the home may not want to sell or feel they are entitled to more, as they gave up their life to take care of Mother, at which point the other siblings may just want their share of the value of the childhood home.
In situations like this, the person living in the home could buy out the other siblings at fair market value. At times, this firm has both had to have the sole provider removed from the home to sell the property, and in others, we have represented the family member who did not want to leave to purchase the home.
When families cannot agree, the only people who make money are the lawyers. So, we recommend mediation prior to any court action when possible for partition actions.
What Documents Should You Gather Before Filing a Partition Action?
Before consulting with an attorney or filing a partition action, gather these essential documents:
Property Documentation
- Deed to the property (showing how title is held)
- Property tax records for the last 3 years
- Mortgage documents and current loan statements
- Property insurance policies
- Recent property appraisal or comparative market analysis
Financial Records
- Records of property expenses paid by each co-owner
- Rental income documentation (if applicable)
- Receipts for improvements or repairs made to the property
- Utility bills and maintenance costs
- Property management agreements (if applicable)
Legal Documents
- Will or estate documents (for inherited property)
- Partnership agreements or business formation documents
- Any existing co-ownership agreements
- Previous legal correspondence about the property
- Lien searches or title reports
Communication Records
- Emails or letters between co-owners about the property
- Documentation of disagreements or failed negotiations
- Records of occupancy (who lives in or uses the property)
Having these documents organized will help your attorney assess your case more efficiently and potentially reduce legal costs.
What is the Controlling Law on Partition Actions in New Jersey?
The process and legal authority for performing a partition action is governed by New Jersey under the statutory framework of N.J.S.A. 2A:56-1 et seq. (current through 2024 legislative session). Partition is not a new invention of the legal world. Partition suits date back to at least the reign of King Henry VIII in England, according to the New Jersey Partition Action Wujciak v. Wujciak, 140 N.J. Eq. 487, 489. (Ch. Div. 1947).
What Happens During a Partition Action Lawsuit in New Jersey?
Initial Filing Process
The first step in a real estate partition is to file a partition action lawsuit in the Chancery Division of the County Superior Court where the property is located. All of the co-owners must be named, along with anyone with present or future interests in the property. This includes people who have liens against the property, such as judgment creditors, the IRS, the State of New Jersey, or anyone holding a tax lien certificate.
Lis Pendens Filing
Also, a “lis pendens” is also filed at the same time as the petition. A lis pendens notifies everyone who may come into contact with dealings related to the property that a court action is taking place. Lis pendens are also filed for mortgage foreclosures, tax lien foreclosures, and any lawsuit in general that involves the property to make sure that the public is on notice the property is subject to litigation. Lis Pendens lists for New Jersey are recorded at the county recorder’s office of the county in which the property is located. Lists of Lis Pendens for the state of New Jersey can be purchased from the State of New Jersey or Njlispendens.com.
Response and Settlement Process
What happens after everyone is served can go one of many different ways. The other co-owners may file an answer disputing a co-owner’s right to ask for partition. This alone can increase the litigation costs. If someone starts filing motions to ask for other things not involved with the partition or pro se defendants start demanding things not recognized in the law, things can escalate quickly in costs.
Over 85% of partition actions settle without going to trial, typically during the discovery and negotiation phase.
If everyone is on board with the partition, the action is unlikely to end up in court. However, once an attorney explains a person’s rights regarding the partition, the situation usually becomes less contentious. This shift happens when the focus moves from what someone feels is right to what the court is most likely to rule.
Pro Se Defendant Challenges
However, when pro se defendants, those unrepresented by an attorney, become tied up in litigation and want to enforce their rights based on cases they found from 50 years ago or in another state, it can be frustrating for everyone involved, including the court. We had one case where a defendant told the court, no less than 6 times, they were going to get an attorney but failed to do so. We know this as the court forwards all correspondence to the attorneys on a case as to not have ex-parte communication with someone on a case. Basically, no one gets to speak to the court without everyone knowing what is happening.
Expense Adjustments
Once everyone is on board that stopping a partition action is unlikely, then it is not unusual for a party to the partition action to seek an adjustment in what they are to receive of the sale proceeds by asking the court to take into account their fair share of expenses. So the Court will ask that adjustments be made for any taxes, maintenance, improvements, or other expenses paid by an owner in excess of that owner’s fair share be credited. And at the same time, ask that any co-owner who was using the property or receiving rent that was not shared have their portion of the proposed sale be reduced, depending on how the ownership interest was set up. For instance, a tenant in common is not required to pay rent because another tenant in common chooses not to live in the property. The New Jersey courts have a system in place to make sure that a partition action is equitable in the way that funds are divided based on ownership interests.
Before You File: Essential Checklist
Before pursuing a partition action, consider this checklist:
Communication Attempts
- Have you tried direct negotiation with co-owners?
- Have you proposed mediation or alternative dispute resolution?
- Have you documented all attempts to resolve the dispute?
Financial Considerations
- Do you understand the estimated legal costs ($5,000-$30,000+ for contested cases)?
- Have you considered that court-ordered sales typically generate 10-15% less than private market sales?
- Can you afford the upfront costs and potential delays?
Legal Requirements
- Do you have clear title and ownership documentation?
- Are all co-owners properly identified?
- Have you checked for any contractual restrictions on partition?
- Do you have standing to file the action?
Practical Matters
- Have you considered the emotional impact on family relationships?
- Is there a co-owner willing and able to buy out others?
- Have you obtained a current property appraisal?
- Are you prepared for a process that may take 6-18+ months?
Are People Credited for Expenses Incurred Prior to a Partition Action in New Jersey?
People will be credited or debited for the expenses they incur and for the usage of the property above and beyond their fair share. For instance, if four siblings now own a house after their parents passed, and two live in the property and two do not, while one pays the taxes and another pays the mortgage, they all will have credits or debts from their share of the proceeds.
Credit and Debit Examples
Credits (amounts added to your share):
- The two living in the house would have the fair value of market rent deducted from their share of sale proceeds
- If one of the siblings living there put on a new roof to improve the value of the house and protect the home from being damaged, which was not fully covered by insurance, and the other siblings agreed, that sibling would be credited for the repair from the sale proceeds
- Paying the mortgage and taxes above the siblings’ fair share would also be credited from the sale
Debits (amounts subtracted from your share):
- If, for example, one sibling hired his son to paint the house against the wishes of the other siblings, while the house did not need painting, since the work did not add to the value of the home, and no one agreed to the expense, this would most likely not be allowed as a credit
As NJ real estate attorneys, we have had to mediate, negotiate, and sue parents, children, cousins, brothers and sisters, half-sisters, half-brothers, adopted children, former spouses, in-laws, and distant cousins, all to partition property. We have had family trees that spanned 4 generations that were never deeded the property for the last two generations for probate. The scope of these partition actions can seem enormous, but when everyone realizes that they either agree to partition and sell or no one gets a dime, or the one person who wants to argue is going to eat the costs of the suit, most families eventually come to understand partition now is better than a lawsuit and then tax lien foreclosure later.
How is a Property Sold in a New Jersey Partition Action?
Public Sale Process
Unless all the co-owners agree to a private sale, any sale ordered by the court will be a “public sale.” If a public sale is ordered, the sheriff of the county will sell the property at auction. This tends to generate less money than a private sale, as most people who go to auctions are buying as is without any inspections and taking a risk, so they expect to pay less for a property than on the open market.
After the sale, the sheriff will distribute the money to the parties as specified in the judgment or deposit the money with the Clerk of the Superior Court. If the money is deposited with the clerk, an order for distribution from the court will be needed to release the funds.
Private Sale Process
A private sale normally raises more money and is subject to court approval. The parties involved in the partition action lawsuit will be given notice of the sale, which should include affidavits of two independent appraisers that show that the deal is fair. If a co-owner objects, the only way the objection will win is if a better bona fide offer is proffered or if it can be shown the value of the property exceeds the proposed contract price by an amount that makes the offer unacceptable. An offer of $5,000 under the lowest appraisal will most likely go through on a $500,000 property if no better offer comes in, as a 1% difference is unlikely to stop a sale; however, an offer $50,000 under the appraisal value may or may not go through because it is too low.
What Happens to Commercial Property in Partition Actions in New Jersey?
If there is an ongoing business, such as a commercial property that is being sought to be partitioned, the court may appoint a receiver if everyone cannot agree on the way the property should be run. A court-appointed receiver will collect rents and any other income generated by the property and pay the expenses associated with the property during the course of the partition action. This is another added expense that the owners would be paying for when they cannot agree.
Frequently Asked Questions
Can a New Jersey partition action be stopped?
Quick Answer: In most cases, no.
Detailed Explanation: Unless the person who brought the partition lawsuit has no standing, the partition action will likely succeed. Or if there was a contract in place barring partition, it also may require arbitration or mediation, or the person had previously waived their right to partition. However, there may be legal defenses that can prevent or slow a forced sale or allow for a greater advantage in the lawsuit for the defendant trying to stop the sale.
For instance, if someone lives in the property, negotiating when they move out or what they pay for rent is possible. Credits for improvements can also be negotiable. Most people prefer to settle a partition action lawsuit before a judge decides it for them.
A partition action cannot be “stopped” by a party who does not wish to sell the property unless the parties can resolve the dispute. The action can be stopped when everyone agrees to the next steps.
What are the pros and cons of a partition action in New Jersey?
We always recommend mediation prior to bringing a partition action lawsuit. However, if you are at your wits’ end, a partition action may be your only option. There are pros and cons to a partition action lawsuit in New Jersey. The main pro is that a partition action breaks a stalemate between you and your co-owners. The main con is the cost.
PROS
- If, through mediation, co-owners cannot agree on how to manage or sell a property, the partition action will get the property sold
- Some chance of reimbursed costs associated with the property ordered by the court, including attorney fees
- High success rate with over 85% of cases settling without trial
CONS
- Court costs and attorney fees
- Time to get the process done can take a year or more in a litigious matter
- Forced sales normally are for less money than if your property was sold at market rate
How much does a partition action cost in New Jersey?
Quick Answer: $5,000 to $30,000+ in legal fees for contested cases.
Detailed Explanation: If both sides agree to partition a property, the costs usually will not exceed what is normally expected from the sale of any real property in New Jersey. However, if litigation ensues, the costs can range from $5,000 to $30,000 in legal fees, depending on how litigious both sides become. The good news is that costs are often recoverable from sale proceeds when the action benefits all parties.
Let’s look at one particular litigious New Jersey partition case: MCDERMOTT-GUBER. After appeals, one side in the partition action BART J. MCDERMOTT, INC., Plaintiff, v. JOY MCDERMOTT-GUBER, a/k/a JOY MCDERMOTT, Defendant. DOCKET NO. A-1210-15T3, decided May 19, 2017, asked for over $200,000 in sanctions, which were eventually denied on appeal.
These fees requested were not typical, and sanctions are rarely awarded if one side has even the thinnest of legal theories to argue. Sanctions are usually only awarded for frivolous conduct.
The costs of a partition action in New Jersey may be paid from the proceeds of the sale of the property if the court agrees that the lawsuit was brought in good faith. The partition action has to be shown to have benefited all of the co-tenants. The court has discretion to award fees if the partition action lawsuit can be shown not to have been for the sole purpose of advancing the interests of the co-owner filing the partition action. Since this is discretionary, it is also not guaranteed that fees will be awarded.
How do I win a New Jersey partition action?
Quick Answer: “Winning” depends on your specific goals.
Detailed Explanation: Winning a New Jersey partition action is relative and depends on your goals. If you are trying to stop a partition action, your options are limited. Some co-owners of property want to keep the property, which may be possible at a fair market price. Parcels of land may be able to be physically partitioned, which may be your goal. Physically dividing up a property is not always possible, as in the case of a single-family home; a win may be when a co-owner wishes to sell the home. In other cases, you may want to take full possession of a home/property and “buy out” your co-owners, or you may want to be bought out. Each partition case is different, and we can go over your goals to see what we can achieve together.
Attorney and court fees chip away at the property’s original value to each owner. When settlement cannot be achieved, costs may drive the case to trial sooner rather than later to avoid unnecessary delay and costs outside of the legal aspects.
How Long Does It Take to Win a New Jersey Partition Action?
Quick Answer: 3 months to 18+ months, depending on cooperation and complexity.
Detailed Explanation: To resolve a partition action in New Jersey, it can take anywhere from a couple of months to reach a settlement agreement to a year or more if the partition action goes to a court trial. Here’s what to expect:
Timeline Breakdown:
- Simple cases with cooperation: 3-6 months
- Contested cases that settle: 6-12 months
- Cases going to trial: 12-18+ months
- Family dispute cases: Often take longer due to emotional factors
The vast majority of New Jersey partition actions settle without a final judgment by a judge. This reduces the time frame from filing the lawsuit to resolution. Settling before trial is cheaper and faster. Before filing a partition action in New Jersey, it is important to consider the benefits, potential consequences, and likely outcome of your case.
Do I need a New Jersey partition action lawyer near me?
Quick Answer: Yes, especially one familiar with your county’s courts.
Detailed Explanation: We recommend finding an experienced New Jersey partition action attorney familiar with the county chancery court in the county where the real estate property is located. For example, if the co-owner lives in New York, NY, yet the real estate property is in Jersey City, New Jersey, we recommend working with a partition action lawyer in Jersey City. A Jersey City partition action lawyer will generally be more familiar with the Hudson County Chancery Court procedures versus an out-of-state attorney.
How do I choose a NJ partition action attorney?
Quick Answer: Look for experience, local knowledge, and clear communication.
Detailed Explanation: It is important to seek the advice of a qualified New Jersey real estate attorney for partition matters. Each partition action is unique. Your facts are different from anyone else’s. You need a lawyer who will understand your concerns and advocate for you. Our experienced partition attorneys represent clients through all phases of partition actions in court.
If you have any questions about partitioning your property, please do not hesitate to call us.
Where can I find NJ Partition Action Forms?
Quick Answer: Forms are available, but professional help is strongly recommended.
Detailed Explanation: While partition action forms are available online, we highly recommend speaking with an experienced partition action attorney. Handling a residential or commercial partition is basically the same, but are you sure you have all of the people with interests in your property served? It would be a real kick in the pants to have to start over because the IRS was served incorrectly, or service was done improperly. No partition action is identical, and if you try to use a form, you may waive your rights or defenses. Or, just miss the mark altogether. I once saw a contractor lose an $83,000 claim because he did not have his contract number on his free forms for contracts he downloaded online. NJ laws can be ridiculous at times. Trying to save a dollar now can cost you the entire case because something simple was missed.
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