Dividing Land: Partitions in Oklahoma Real Estate
With shared ownership comes the potential for conflict. When that conflict occurs and co-owners of real estate wish to part ways, and cannot agree voluntarily, Oklahoma law allows for a process call a partition action. This allows the co-owners (or co-tenants) to seek a split of, or sale of, real property.
VOLUNTARY PARTITIONS:
Voluntary Partition: Before delving into the intricacies of the legal action of partition, we must not that it is not strictly required. If the parties can agree, they can negotiate and divide up the property without involving a judge/law suit. Of course, such agreement should be written and outline all the duties and obligations of the parties. Voluntarily agreeing to divide up the property is the most efficient approach and saves the parties the expense and time of litigation.
Remember that every partition is unique. However, there are a few best practices we suggest:
(1) Property Valuation/Appraisal. If money is exchanging hands, we always recommend having a professional appraiser determine the value of the property. While Zillow or County Tax records are decent guages, they should not be used as a determination of value. Tax records tend to value low while Zillow may value a property higher than market. Most realtors can provide you with comparables and provide you with a accurate value.
(2) Title Search. While the value of the property is being determined, you should also have an attorney perform a surface title examination. Such a review is somewhat expensive (between 500 to 1000); such a search ensures that ownership of the property is clear, there are no outstanding liens, and ensures a seamless transition.
(3) Tax Implications. Purchasing/selling a property will have tax implications. An accountant or tax expert should be contacted to see what tax liability you may have with regards to a voluntary partition.
(4) Drafting Agreements. Our final best practice is whatever voluntary agreement is made, NEEDS to be written down. An attorney should be contacted to draft the agreement and transfer documents (deed, affidavits, etc). If the title search reveals issues, an attorney will also be able to help with that as well.
If the parties cannot agree . . .
JUDICIAL PARTITIONS:
If the parties cannot agree, one of the co-owners may bring a lawsuit against the other. The lawsuit begins with a petition that should specify the owner’s interest and any liens/mortgages on the property. A time is set to have a hearing before a judge. At the hearing, an order specifying interests, directing a partition to be made, and to appoint appraisers is entered.
Three appraisers then review the property and determine its value. Once that is done, the parties only have 20 days to filed either an exception or an election. An exception is when one party disagrees with the appraiser’s valuation. An election is when one owner agrees with the appraiser’s value and wishes to “buy-out” the other owner. If neither occur, the property is then sold by the sheriff in a public sale. The proceeds of the sale are then divided amongst the owners.
CONCLUSION:
Whether pursuing a voluntary or judicial partition, having the guidance of an experience Oklahoma Real Estate Attorney is crucial. They can advise you on the best course of action, draft up the necessary documents/agreements, and navigate the court procedure (if necessary). Give us a call at 828.851.2963 or through our contact page above.