The Definitive Guide to Real Estate Partition Actions In New Jersey
Explained by A NJ Partition Lawyer

When co-owners don’t agree with what to do with the property. A New Jersey Partition lawyer can help bring a partition action 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 by the other out at a fair price. It is best when this is done voluntary when all co-owners agree. If a co-owner does not agree to what is happening with the property they partially own they can move 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 received funds 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 or who is responsible for it. The court may order partition through actual division, or through sale of real estate.

Dividing property is rare and normally only applies to vacant land. When 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 through out, 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 spit between the brothers.

An example of selling property would be if the property cannot be easily divided such as a 1 story house. It is hard to evenly divide a house, so the house would be sold and the money divided between the owners.

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 the property is located. NEW JERSEY COURT RULE 4:3. DIVISIONS; VENUE; TRANSFER OF ACTIONS 4:3-1. Divisions of Court; Commencement and Transfer of 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.

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. 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 )

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 cost of maintenance, or when to pay for improvements to the property or even an agreed 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.

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.

Basically, all family members including parents, children, aunts, uncles, cousins, nieces, nephews, in-laws, grandparents can bring a partition action lawsuit in New Jersey if they own or have an interest in real property. 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 to pay the mortgage and taxes. Disputes such as these can create substantial family turmoil. 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. Now all of the children will take equally of the home as heirs to the estate of their mother under New Jersey’s intestate laws. The person living in the home may not want to sell or feels they are entitled to more as they gave up her 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 that make money are the lawyers. So, we recommend mediation prior to court action when possible for partition actions.

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. 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).

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 judgement creditors the IRS, the State of New Jersey and one that would hold a tax lien certificate. Etc. 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 dealing 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 of where the property is located.  List of Lis Pendens for the state of New Jersey can be purchased from the State of New Jersey or Njlispendens.com. 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 passed in the law things can escalate quickly in costs. If everyone is on board with the partition, odds are the action would not have ended up in court, but once an attorney explains someone’s rights to them in regards to a partition action it then generally becomes less contentious when it is less about what a person feels is right, compared to what the court is most likely going to rule. 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 in a case.  Basically no one gets to speak to the court without everyone knowing what is happening. 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 fare 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 that 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 were set-up. For instance a tenant in common is not going to have 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.

People will be credited or debited for the expense 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 of their share of the proceeds.  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 that was not fully covered by insurance and the other siblings agreed, that sibbing would be credited for the repair from the sale proceeds.  If on the other hand the let say 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.  Paying the mortgage and taxes above the siblings fair share would also be credited from the sale.

As NJ Real Estate Attorneys, we have had to mediate, negotiate and sue parents, children, cousins, brother 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 was 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 lawsuit and then tax lien foreclosure later.

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 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.

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 ways 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 vale may or may not go through because it is too low.

If there is an on going 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 he property during the course of the partition action. This is another added expense that the owners would be paying for when they cannot agree.

In most cases, the answer is “no.” 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.

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

• When co-owners cannot agree to how to manage or sell a property mediation, the partition action will get the property sold
• Some chance of reimbursed costs associated with the property ordered by the court including attorney fees

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

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.

If both sides agree to partition a property, the costs usually will not exceed what normally is expected from the sale of any real property in New Jersey.  However, if litigations ensues the costs can range from $5,000 to $30,000 in legal fees depending on how litigious both sides become.

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 was eventually denied on appeal. See https://www.njcourts.gov/attorneys/assets/opinions/appellate/unpublished/a1210-15.pdf

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.

https://njlawconnect.com/wp-content/uploads/2013/04/Chedid.Brief_.12.14.12.pdf

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 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.

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 taking 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 than later to avoid unnecessary delay and costs outside of the legal aspects.

To win 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.  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

We recommend finding an experienced New Jersey partition action attorney familiar with the county probate 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 probate lawyer in Jersey City. A Jersey City probate lawyer will generally be more familiar with the Hudson County Chancery Probate Attorney versus an out of state attorney.

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 than anyone elses. 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.

While partition action forms are available online, we highly recommend speaking with an experienced probate litigation 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 really be a kick in the pants to have to start over because the IRS was served incorrectly, or services 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 all together.  I once was 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 know can cost you the entire case because something simple was missed.  

While partition action forms are available online, we highly recommend speaking with an experienced probate litigation attorney. No partition is identical and if you try to use a form, you may waive your rights or defenses.

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