Are you familiar with the concept of a real estate forced sale?? Navigating the challenges of forced real estate sales can feel like an uphill battle for homeowners and investors alike. Whether facing financial strain, legal pressures, or personal circumstances, the urgency to sell can complicate an already stressful situation. However, understanding the intricacies of this process can turn obstacles into opportunities.
It’s not uncommon for a single property to be jointly owned by two or more people. Significant others may have purchased a home together, investment-minded friends could have pooled money together to purchase rentable properties, or siblings might have inherited a house or land from a deceased parent. Those events can be the impetus of a partition action or lawsuit. But what happens when there is a serious dispute over how to manage said property or the business or couple parts way, and one of the co-owners wants out? Can you proceed with a real estate forced sale if your co-owned property is in Florida? ? Here’s what you need to know about the costs, strategy to win, and whether or not you can stop a partition action.
When co-owners of a property get into a dispute over how that property is to be divided or used, they need to first get together and try to resolve the issue without relying on the courts. A common remedy is simply for one co-owner to buy the other one out, purchasing his or her part of the property. They can also agree to sell the property. If neither of these are a possibility, and an agreement cannot be made, it falls on the court system to resolve the issue.
Understanding Forced Real Estate Sales In Florida
In Florida, partition actions are governed by specific statutes and legal principles designed to ensure a fair and orderly resolution. The process is initiated by filing a complaint in the circuit court where the property is located. The court then evaluates the circumstances and determines the most appropriate method of partition, which can be either partition in kind or partition by sale. Partition in kind involves physically dividing the property, while partition by sale results in selling the property and dividing the proceeds among the co-owners. Understanding the differences between these two methods can help co-owners determine their preferred outcome.
One critical aspect of partition actions in Florida is the equitable distribution of the property or its proceeds. The court aims to ensure that each co-owner receives a fair share based on their ownership interest.
Dividing the Asset
Once the plaintiff files a partition lawsuit, the court has two methods for completing the action. It will either order that the property be divided equally among the parties, referred to as partition in kind; or order that the property be sold, and the proceeds divided equally among the co-owners, also known as partition by sale.
With undeveloped tracts of land, a common remedy is what is known as partition in kind, dividing the parcel equally between or among the co-owners. But when the land contains a house, apartment building, condominium, or other commercial structure, things get a bit more complicated, and a partition by sale is called for. This is when the court orders the property to be sold, either through a public auction or a private sale conducted by either a clerk or a magistrate.
What About the Mortgage?
If the property under dispute has a mortgage, then under Florida law the mortgage lender becomes a party to the partition lawsuit, at which time they may legally foreclose the mortgage in the partition lawsuit. This can result in additional as costs for all of the co-owners.
While a best-case scenario outcome for all parties of a Florida partition action is entirely possible, keep in mind, it should be reserved as a last resort, because once this legal action is taken, the owners have no control over the outcome. The process can cause a great deal of uncertainty on the part of the owners surrounding the court’s decision, and in the end, one or more co-owners might not like the outcome.
While it’s always better for co-owners to work through differences out of court, once any party decides take legal action, it’s always best to discuss your particular situation with an experienced, board-certified Florida real estate lawyer before pursuing a partition action. While the right lawyer will be your strongest ally throughout any litigation, he may also be able to help you avoid the court process by negotiating a buyout or a sale to a third party without filing a partition action.
How Much Does a Partician Action Cost?
The cost for a partition lawsuit usually includes a retainer, court filing fees, and various legal costs. A nonrefundable minimum legal fee is sometimes charged upfront where the amount depends on whether the firm is filing or defending against the partition lawsuit. Some attorneys offer a contingency option where both legal cost and attorney fees are deducted from the proceeds of the property sale.
In Florida, the average cost of a partition action generally falls between $10,000 and $30,000. However, the exact cost can vary widely depending on the complexity of the case, the value of the property, and whether the matter is resolved through negotiation or goes to trial.
Can a Partition Action Be Stopped?
A partition action usually cannot be stopped once it’s filed, however, if the contract prohibits partition, or if one of the owner’s has breached their contract, the court may factor that in, specifically if the breached contract is not in the best interest of the parties.
The usual remedy for a breached contract is either equitable, referred to as Specific Performance, or monetary. A monetary remedy is when one party has to pay the other for damages associated with the breach. A breached contract could be used as a defense tactic against the partition action, or to slow down the process.
Contact Florida Bar Board-Certified Attorneys David E. Klein, Esq. and Guy Rabideau at Rabideauklein.com. They have the expertise and experience you need to ensure that your interests are protected throughout your real estate transactions across the Palm Beaches and throughout Florida. Contact Rabideau Klein today to discuss the legal implications of your Florida property transactions.