Partition Actions in New Jersey
“Partition” means to divide into parts. Legally, a partition action is a lawsuit that refers to the division of property amongst co-owners. This division can be literal, by subdividing or carving out new plats; or it can be the forced sale of the property. Most common is the sale of the property where one co-owner will purchase the share of the other’s, or the court will force a sale of the property at market; the proceeds from that partition sale are then distributed to each co-owner according to their respective share.
Partitions are brought about when co-owners can no lnoger agree on how to manage property, dispute each other’s contributions, no longer wish to own with one another and cannot agree on how best to transfer those ownership shares, and more. A New Jersey partition lawyer can help file a partition action in order to expedite the process, divide the property quickly, and ensure their client is getting a fair deal.
Normally, only vacant, rural, or undeveloped land will be literally partitioned. In most circumstances - for instance, multiple people own a two-family home in an urban city or town - the property is forced to be sold. When literal partition is ordered, this is called a “Partition in Kind.” There, a judge may also order a new survey for each plat and for each survey and deed to be filed with the county clerk. However, if co-tenants or any of them who have had their property divided as a result of a literal partition are not happy with the proposed division, another option would be a sale of the property wherein 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 them.
Another example of selling property would be if the property cannot be easily divided such as a 2-family residence. It would be impossible to divide a residential home, so the house would be sold and the money divided between the owners, where one would have the right to buy out the other. These types of partitions are called “partitions by sale.”
Where do I file a New Jersey Partition action?
A New Jersey Partition lawsuit is filed in the Chancery Division, General Equity division of the Superior Court of New Jersey in the county the property is located.
If any other form of relief is sought that affects the family, the matter would be filed in the Chancery Division, Family Part of the Superior Court of New Jersey where the family resides. A property could be situated in Hudson County, but if the family resides in Monmouth County, Monmouth County would take precedence for the court to hear the matter.
Who has standing for Partition Actions in New Jersey?
Any co-owner(s) may seek a partition of property if they have not waived their right to do so or are prohibited by contract (caveat: it may be possible to file a partition action anyway). 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, boyfriend-girlfriend and similar relationships. Even a friend investing money into another friend’s home may have standing to file partition regardless of whether they are on the mortgage and the deed or not. This last one is important because you DO NOT have to be on the deed in order to have an interest in property.
Since partition is an action in equity, all situations are considered upon their specific circumstances. Business owners, partners, friends, boyfriends and girlfriends, even family members may find themselves in position to file a partition action. Often this type of joint property ownership can result in disputes not foreseen when the property was purchased. This applies to commercial property, vacant land, residential property, investment property, and more. Business partners cannot always agree how a property will be managed. Some partners may value long term appreciation while others may want to take out as much profit in the short-term. Sometimes, these conflicts arise many years down the road and were never contemplated or problematic earlier! Conflicting goals and philosophies make it difficult to prioritize or agree on cost of maintenance, or when to pay for improvements to the property, or even in paying taxes.
Partitions for Families in New Jersey
Any and all family members may have standing to file a partition action lawsuit in New Jersey if they own or have an interest in real property. This typically occurs from the joint purchase or investment in a property, or through a bequest of inheritance to family members. Family disputes may also center around who should: live at the property, be responsible for repairs and maintenance, pay for the general upkeep, pay the mortgage and taxes, and even rent out unused units in the property. 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 her 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. When families cannot agree prior to partition, the only people that make money are the lawyers.
Where does the law for Partition Actions in New Jersey derive its authority?
Partition is an equitable action. This means it is the power of the Chancery Court in each county to ultimately decide the case. However, the New Jersey Legislature has created statutory framework to apply to different situations. N.J.S.A. 2A:56-1, et seq.; N.J.S.A. 3B:23-8; R. 4:63-1 et seq.; are some statutes and court rules that attorneys may rely upon in their filing for partition actions, although his is not a wholly conclusive list. Partition is not a new invention of the legal world. As a concept, partition action lawsuits date back to the reign of King Henry VIII in England according to the opinion of a New Jersey Chancery Court in the partition case Wujciak v. Wujciak, 140 N.J. Eq. 487, 489. (Ch. Div. 1947).
The Partition Process in New Jersey
Before filing a partition action lawsuit in New Jersey, you and your attorney should ensure you have all the relevant background information prepared for the court. This investigation is referred to as -pre-petition due diligence, and it is especially important in a partition action lawsuit because it is critical that the property is adequately identified for the court with specificity. Obviously you want to ensure your property is partitioned.
Also, your attorney will likely file a notice to the world called a “lis pendens” after filing for partition. “Lis pendens” is Latin for “suit pending;” the purpose is to put the whole world at notice that a lawsuit has been filed regarding the property in question. Lis pendens are also filed for mortgage foreclosures, tax lien foreclosures, and any lawsuit that involves real property to ensure the public is put on constructive notice that property is subject to litigation.
After filing the partition action, your co-tenants (or co-owners) will have 35 days to file an answer. Sometimes, people retain attorneys to help explain and represent them. Other times, they represent themselves pro se (or without a lawyer) in their partition case. The benefit of having an opposing attorney is someone is there to explain partition law to the other party. This can actually help keep costs down in some cases because prolonged litigation is usually more expensive to both sides than just coming to an agreement. When pro se defendants rely upon old law, bad law, or sympathy to enforce their rights, it can be frustrating for everyone involved. To be clear, everyone has a right to defend themselves, not just in partition actions, but obviously the assistance of counsel is powerful since they can also act as an educator to you regarding good, current law.
Nonetheless, if the partition must be tried, the plaintiff (party bringing the partition suit) has the burden of proving their case - that they are an owner, that partition is not unjust nor unreasonable, and that there may even be a need for an accounting or contribution for expenses and improvements. This obviously is quite costly as preparation for and arguing a trial takes the necessary due diligence to prove one’s case.
Alternatively, if the parties to a partition agree to a reasonable settlement of the partition action. This could be one party buying out the other’s share pro-rata, making adjustments for liens and expenses, or even agreeing to list the property at market for an agreed upon sale price. Ultimately, New Jersey Courts have a system in place to make sure that a partition action is equitable for both parties.
Sales of partitioned property in New Jersey
Typically, if all owners agree to a sale, the property will be listed at market and sold at a private sale. A private sale, even though it uses the word “private”, just means the property is sold under the normal circumstances for the sale of real property in New Jersey. Even as a result of trial, I have had courts order an appraisal and a private sale of the property.
In some instances, the court may even order a public sale. Unlike a private sale, where the individual parties manage the sale of the property, a “public sale” is handled by the sheriff of the county at an auction. These auctions tend to lead to lower sale prices than a private sale as the property is usually sold in an “as-is, where-is” manner. “As-is, where-is” means to take the property exactly as it is without any inspection or even appraisal concessions. Since buyers at auctions are taking a greater risk, they expect to pay less for the property than they would on the open market, at a private sale.
After the private sale, the partition owners can split the proceeds pro rata per their ownership and go on their way. Alternatively, after a public 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 partition funds to the parties.
The parties involved in the partition action lawsuit will be given notice of the sale, after agreeing to the price or an independent appraisal. An appraisal can only be performed by a licensed appraiser; realtors provide comparative market analyses - these are not appraisals. If a co-owner objects to the appraisal, it is typically up to that party to prove the offer was undervalued by an amount to require a new offer. I usually would request that party to submit their own appraisal or request the court order an apprasial be appointed. The benefit of going to court with your own appraisal is in being prepared - the more prepared you are, the less there is to argue about. And if your co-tenant thinks your appraisal is low, they can pay to prove it!
What happens to commercial property in Partition Actions in New Jersey?
Commercial property includes investment property, properties operated as or for a business or for-profit purpose, and properties that generate income. If there is commercial property co-owned by parties that no longer wish to co-own the property, partition may be a solution. The court in a commercial partition action may appoint a receiver to continue to operate the business or income under the right circumstances. A Court Appointed Receiver will collect rents and any other income generated by the property and pay the expenses associated therewith during the partition action proceedings. This, unfortunately, is another expense co-tenants must pay when they cannot agree to a settlement of partition.
Stopping Partition Actions in New Jersey
Typically, partition, once filed, cannot be stopped unless the parties agree upon a settlement or the complaint is withdrawn or dismissed. As we discussed above, the partition action must be supported by some ownership interest (express or implied). Alternatively, the parties may have signed agreements, joint ventures, or other types of contracts barring partition or requiring arbitration or mediation instead.
However, it may be possible to negotiate for time to allow tenants to move out or if someone lives in the property, negotiating when they move out or what they pay for rent is possible. Parties can also negotiate for credits for improvements, contribution towards unpaid expenses, liens, other improvements, or even for a reallocation of ownership interest. It may be preferrable to settle a partition action lawsuit before a judge decides it for them, as even the best arguments must be interpreted and decided by the judge. This only means you are leaving the decision of what happens in your partition action to someone else! Nevertheless, if your goal is a trial, I will confidently step into the courtroom and argue your partition fervently and professionally.
Costs and expenses of filing and fighting a partition action in New Jersey
As an attorney who has regularly handled partition actions in New Jersey, I would recommend an appraisal of the subject property. For many properties, the price of an appraisal usually ranges between $400 to $750 depending upon the size of the property and other factors. An alternative would be a broker’s opinion of value, or a comparative market analysis. These are typically cheaper, around $250 to $500. In a worst case scenario, I can calculate a fair market analysis based upon the average ratio assessed to true value. This is based upon the municipality’s tax assessor’s assessed value and calculating the average ratio. It is important to note that this is a last resort as an option, as the judge will likely order an appraisal of the property, with the cost split between the co-tenants pro rata.
I may also order searches with the county clerk and upper court for any liens, judgments, mortgages, and lawsuits that may affect title to the property. This could range from $100-$450. These searches affect the dollar value of the property since liens, judgements, and mortgages must be paid off or transferred during a sale.
Therefore, the cheapest option is if both sides agree to a partition settlement or agreement. The costs in this scenario may not too far exceed what normally is expected from the sale of any real property in New Jersey. However, failure to agree results in litigation and drives up costs. I cannot quote litigation fees because each case is unique, but I do handle litigation on an hourly basis. So, the amount of hours I put in (again, this is unique to each case) multiplied by my hourly rate would be the final costs. This also does not count the other owner(s)’s attorney and their fees.
The good news is that costs of a partition action in New Jersey are usually paid or reimbursed from the proceeds of the sale. I always take some retainer up front for costs and expenses, as well as some time up front, but I am flexible in working with you on fulfilling the total payment for the entire partition process. Sometimes, if the other party is found to be acting in bad faith or in breach of an order of the court or a litigant’s right (a party may even motion the court for sanctions, like striking pleadings or attorneys fees as well), the other party may even have to pay some attorney fees as a result. This is discretionary to the court and should not be relied upon.
Typical Length of a Partition Lawsuit
As we learned above, partition actions are filed in the Chancery Division of the Superior Court. Chancery actions must be resolved within twelve (12) months of filing. One attorney I know even referred to the Chancery Court as a “rocket docket” because of how quickly (according to legal circles) matters in dispute in Chancery, like partition, can be handled. This may not sound quick to you, but that also depends upon whether the parties agree to settle or go to trial, whether there are additional costs and expenses that need to be considered or whether an accounting or ouster has taken place. There are so many factors that go into each case - not just partitions - that affect the overall length.
CAVEAT: do be aware that “resolved” regarding Chancery matters refers to the matter being resolved by the/in court. This means it could take months for the judge to render an opinion after a partition trial or months for the agreed upon sale to be finalized. Worst case, you may even have to go back to court to enforce your partition settlements. Also, the twelve month timeframe is from the filing of the partition action, not from hiring a partition attorney, so the length can be greater than twelve months.
Do I need a New Jersey partition action lawyer near me?
As a licensed attorney in New Jersey, I have represented clients in counties ranging from Sussex to Atlantic, but I am willing to represent a client anywhere in New Jersey. Having handled partitions for so many clients, arising from different areas of the law, I feel it is important that you have an attorney represent you. I you feel it is important that the attorney be from your area, that is fine (and fair). However, I feel I can step into a courtroom in Bergen County with the same confidence that I could step into a courtroom in Mercer County and zealously represent you in your partition action. After all, the law is that of the State of New Jersey!
Do I need an attorney to file or fight a partition action in New Jersey?
It is always advised to seek the advice of a qualified New Jersey attorney for partition matters. Partition my stem from a probate and estate administration matter, a commercial or business dispute, or even simply a real estate matter. Regardless the genesis, each partition action is unique. It is important that you have someone in your corner who can counsel, educate, and represent you throughout the process.
I thoroughly enjoy representing clients in all matters, especially partition actions as I feel it is imperative as an attorney to ensure you are informed and given the options best for your individual case. I handle all aspects of partition actions, from negotiations through trial. While you are certainly allowed to represent yourself pro se in a partition action, it is always advisable to have a licensed attorney provide their knowledge and training to you so your partition case is best presented to the judge and the court; after all, that’s who is (usually) hearing the case!
If you are looking for a partition attorney in New Jersey to represent you in your potential partition action you can email me at Ranalli@ranalli-law.com. Your rights and privacy are 100% protected. We never share or sell your information or email. No one wants spam email and I respect your right to privacy. I am here to help you.
