In some cases, real estate investors are not going to be able to agree on what to do with the property that they own. Maybe you and a partner started an investment firm. You purchased some property and now you want to sell. Your partner doesn’t want to sell and doesn’t believe it’s the right time. What are you supposed to do?
If a case like this goes to court, the court may use a tool known as a partition action. This is done to divide real property between two individuals. There are two ways to do it, which we will examine below.
Splitting the property itself
First and foremost, you can use a partition in kind. This divides the property itself. You end up with different ownership shares and the paperwork is adjusted to show that you both own a different portion of that property. This way, one person could sell their portion and the other person could retain theirs, dividing their investment.
Splitting up the earnings
The other type of partition action focuses on dividing the money earned in the sale. This is done if it’s a type of property that can’t realistically be divided between two owners. The only remaining outcome is to sell the property to a third party and then split the money between the two owners. This isn’t necessarily the ideal outcome for all involved, but it might be the only one that makes sense.
Either way, if you find yourself in a dispute with your investment partner, it’s important to know about all of the legal options at your disposal. You may have a lot of money on the line and you need to know what steps you can take.