In Arizona, real property can be owned by more than one person or entity. So what happens when one owner wants to sell the property and divide the proceeds, and the other does not? Or worse, what happens when one owner wants to sell the property, and the other owner wants to continue occupying it? In other words, what happens if two owners of real estate can’t agree on what to do with the property?
Luckily, Arizona law provides a solution, called a partition action. In a partition action, the Court can divide, or partition, property by ordering that it be sold, with the net proceeds distributed to the owners in proportion to their individual ownership interests.
Under the statutory procedures for a partition action, the Court first conducts a hearing to determine each owner’s individual share or interest in the property. After the hearing, the Court enters a judgment specifying each owner’s interest and directing that the property be sold.
Sometimes the owners agree on how the property should be sold, and in those instances, they may simply hire their own real estate agent to sell it. All too often, however, the owners do not agree on how the property should be sold (or that it should be sold at all). In those instances, the Court will appoint a commissioner, who then in turn may hire a real estate agent to sell the property. The compensation for the real estate agent and/or commissioner is considered a cost of the action and is assessed against the owners in proportion to the value of their individual share or interest.
The remedies available under the Arizona partition statutes are limited to only those that are necessary to partition the property. For example, the partition statutes do not authorize the Court to issue an eviction order if one of the owners occupies the property and refuses to vacate it. In such an instance, the property must first be sold pursuant to the Court’s order for partition, and thereafter, the buyer (i.e., the new owner) of the property will attain the right to pursue an action to evict the prior owner/occupant.
Similarly, the partition statutes do not authorize the Court to assess attorneys’ fees or expert witness fees against an owner in a partition action, or award other relief commonly sought in civil lawsuits such as breach of contract actions. Rather, if an owner intends to seek damages or fees from another owner, that owner must assert separate civil claims along with the action for partition.
If you have any questions regarding a real estate partition or other dispute, please contact our office. Our firm has extensive experience in a wide variety of real estate disputes and can help in virtually any Arizona real estate matter.