Partitioning real property in dissolution of marriage actions and suits between unmarried co-tenants: credits, setoffs, ouster, division, and sale.

• Author: Hipler, Harry M.
• Position: Florida

There are advantages and disadvantages of sharing ownership of real property. These partnerships can involve married adults, unmarried adults living together, and cotenants investing in jointly owned real property as a business enterprise. The partnership progresses smoothly for a while, and then friction and dissention sets in. After consulting with an attorney, the parties finally come to the realization that the partnership must end. They cannot agree on what to do with their real property, so the parties turn to the court. A suit to partition real property may be the only answer for unmarried adults, (1) and a petition for dissolution of marriage will be necessary for married adults who have accumulated real and personal property. (2) This article will discuss partition of real property in dissolutions of marriage, situations in which two or more unmarried cotenants live together in jointly owned real property, and when cotenants band their money and resources together and invest in jointly titled real property as a business activity.

Partitioning Land

Partition of real property is a severance of undivided and coexisting interests in real property. Under F.S. Ch. 64, a partition action may be brought by "any one or more of several joint tenants, tenants in common, or coparceners, against their cotenants, coparceners, or others interested in the lands to be divided." (3) Partition is an option when two or more parties have a right to immediate possession of real property as tenants in common, joint tenants with right of survivorship, or life tenants. (4) The policy behind a partition is to encourage trade and to pass title with a minimum of ill will and interference between joint owners. (5) Partition suits can be pled in dissolution of marriage actions, but an estate by the entireties is not subject to partition until after the entry of a final judgment of dissolution of marriage (FJDM), when the ownership becomes a tenancy in common. (6) When there is a dispute as to title or right to possession of real property, a suit to quiet title, ejectment, or adverse possession can be filed to determine the lawful owners and possessors. (7)

Location, Location, Location: Local vs. Transitory Actions

F.S. [section] 64.022 provides that partition "shall be brought in any county where the lands or any part thereof lie...." (8) There is a dispute among the appellate courts as to whether a court can compel the sale of real property located outside the court's geographical boundaries or order a change in title. In local actions--proceedings against the property having a fixed location--the venue lies only in the county and state where the subject real property is located. (9) Under this view, the appellate courts have held that a trial court in a FJDM or partition action cannot sell or transfer real property located outside the territorial boundary of the court.(10) Where the action is personal or transitory--an action on a debt, contract, FJDM, or other suit relating to a person-- a defendant has the right to be sued in the county of his or her residence or where the cause of action accrued. (11) Under this view, a court has inherent jurisdiction to compel a sale of foreign real property located outside of the geographical boundary of the court as part of its power to create an equitable distribution plan in a FJDM. Gil v. Mendelson, 870 So. 2d 825 (Fla. 3d DCA 2003), held that the trial court could order the sale of Israeli real property, where the pleadings requested the trial court to take jurisdiction and equitably distribute all real and personal property of the parties. (12)

Calculating Proceeds of the Partition Sale

The general rule is that each cotenant is ultimately liable for his or her proportionate share of the obligations and expenses of real property. The rationale is that the equity of one cotenant should not be increased by expenditures of another cotenant. (13) Upon partition, a cotenant paying more than his or her proportionate share is entitled to a credit from the proceeds of sale from the other cotenant's proportionate share of the expenses. These guidelines are provided to help the parties and the court achieve compliance. First, each party's proportionate share must be determined by using each party's percentage of ownership. In relationships outside of marriage, each cotenant can own the real property equally or disproportionately. (14) In marriages, if the spouses own real property jointly, upon entry of a FJDM, it becomes a tenancy in common. 15 If real property is in the name of one spouse and was purchased and paid for during the marriage through marital labor or with marital funds, it is marital property. (16) The enhanced portion of nonmarital real property inherited or brought into the marriage and titled solely in the name of the owner spouse constitutes marital property. (17) The court always begins with the premise that marital property should be equally divided, because equitable distribution is based on the premise of an equal partnership in marriage. (18) However, the court has authority pursuant to F.S. [section] 61.075 (1) to award one spouse more than 50 percent of marital property in a plan to equitably distribute the property. (19) Second, the court must decide which "household expenses" are reimbursable. The most common household expenses necessary to preserve and maintain the real property include the mortgage (principal, income, taxes, and insurance), association fees, maintenance, replacement, and repairs that need to be paid in accordance with the proportionate share of the cotenants. (20)

Third, there must be a determination of the amount and percentage of expenses paid by one party that should be reimbursed from the nonpaying cotenant's share. In dissolutions of marriage, the analysis begins upon separation or filing of the action, but in no event later than the entry of the FJDM. (21) In a business or personal relationship outside of marriage, the analysis begins from the date of the original closing of the joint tenancy. (22) If one cotenant pays for 100 percent of an obligation for which the joint owners are liable, he or she is entitled to have the other cotenant reimburse his or her proportionate share of the expenses. (23) Where one cotenant makes a down payment on the purchase of real property, the cotenant not making a down payment is liable for 50 percent of the original down payment at a future sale. (24) But where the FJDM awards one cotenant exclusive possession of the marital residence and directs the cotenant to pay the entire household expenses, the cotenant paying 100 percent of the household expenses is entitled to a 50 percent credit for amounts paid to preserve and maintain the property from the proceeds of sale from the other cotenant's proportionate share of the expenses at a future partition and sale. (25) Florida appellate courts have consistently reversed lower courts awarding a cotenant a 100 percent credit for reimbursable household expenses. The appellate courts have held that a cotenant paying 100 percent of these household expenses is entitled to a 50 percent credit from the proceeds of sale from the other cotenant's proportionate share of the expenses. (26)

Fourth, the real property subject to partition must be given a fair market value. If the size of the real property is large or has many financial mechanisms, a value should be placed on the entirety of the land and each component, so that there is a determination of its rental value, productive value, and live-in value. (27)

Improvements on Real Property

Where a cotenant adds improvements over and above what is needed to preserve the property, the law refuses to make another cotenant pay for improvements made without his or her approval. (28) To the extent that an improvement enhances the value of the real property, the cotenant paying for such improvement can obtain part of the proceeds attributable to the improvement in excess of the share otherwise due. This can be determined by getting an appraisal or valuation of the improvements that enhanced the real property's value. (29)

Forms of Relief

Where the allegation and proof sought to be partitioned is indivisible and not subject to partition without prejudice to the other owners, a court must order a private or public sale. If a trial court fails to do so, the ruling will be reversed on appeal and a partition sale will be ordered in the absence of unusual circumstances. (30)

Where the real property is divisible without prejudice to the owners, a partition in kind, e.g., a division of...