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Dan
Dan, Retired JD
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Regarding Joint Tenancy With The Right Of Survivorship; has ...

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Regarding Joint Tenancy With The Right Of Survivorship; has any VT Court ruled when one owner sued the other owner to end the ownership arrangement and force a sale or other disposition of the property?
My matter involves an owner being added to the deed that was changed to Joint Tenancy With The Right Of Survivorship, in exchange for money to be used to rehabilitate the dwelling and let the new owner move in. The prior owner, and now the other Joint Tenant, has been a continuous occupant. The five month project has dragged on for years. To date the cost is 260% of the prior owner's original plan. At least another 150% of the original plan amount is needed to eventually complete this rehabilitation. The new owner who put up the money has never been able to move in and now would like to move on.
Submitted: 7 years ago.
Category: Legal
Expert:  Dan replied 7 years ago.

Fred:

The procedure you are referencing is called a "partition action", and it does exactly what you are describing.

Partition actions date back to days when families had large tracts of land and they left it to their sons, but one son wanted out so they would bring this action asking the court to 'partition' the property into shares. Instead of being a 1/3 owner of 900 acres, the party wanted to be 100% owner of 300 acres. Then he could do with his land as he saw fit, including sell it.

That is still the basis of a partition action today, except that we add another provision: at the time of filing the action you tell the court whether or not the property can be 'divided'. It it is not suitable for division, the court orders the property sold instead and the proceeds divided.

Keep in mind that the ultimate end of a partition action is a court ordered sale, much like a foreclosure sale, which usually does not get the highest final value. A partition action is often used as a sledge hammer to convince the other co-owners that you are serious, that it is time to close out this deal, and that one way or another this property is going to get sold. Usually, once the parties realize you are serious, and before it can go to the public auction, they agree to list with a Realtor and sell or to buy out your interest. A filed partition action is a 'bluff' few are willing to let run to the end.

Here is description of the property rights involved (from the web info page sponsored by The Real Estate Bar Association for Massachusetts):
"A joint tenancy may be broken by any of the joint tenants. Certain actions will break it, even against the wishes of the other join tenants, and convert it to a tenancy-in-common so that the survivorship feature will not take effect.
Each co-owner [of a tenancy-in-common] has the right to transfer or convey his interest or share in the property by selling it, giving it away or transferring it to persons of his choice at death, without the consent of the other co-owners. If tenants-in-common wish to terminate their joint ownership of the property they may voluntarily do so, by agreement, into separate ownerships. Or they may file a court action for partition in the Land Court or Superior Court. The court may either divide the property into parcels according to each owner's share, or it may sell the property and apportion the proceeds among the co-owners."
See http://www.massrelaw.org/shareownership.htm

Here is an excerpt from a Vermont case which addresses the specific subject under Vermont law:
". . . Vermont property law gives each owner the right to force a division of the undivided interests. "A person having or holding real estate with others, as joint tenants,
tenants in common or coparceners, may have partition thereof." 12 V.S.A. § 5161. The right to partition "is a right incident to common ownership which a co-owner may demand absolutely." Coolidge v. Coolidge, 130 Vt. 132, 134, 287 A.2d 566 (1972). The
commissioners appointed to partition the property may physically divide the parcel among common owners, 12 V.S.A. § 5171, assign the entire parcel to one party "provided he pays to the other party such sum ... as the commissioners judge equitable," 12 V.S.A. §5174, or sell the entire parcel and divide the proceeds. 12 V.S.A.
§§ 5175-77."
See: http://www.vermontcounsel.com/pdf/1995_wl_547808.pdf at page 4.

I hope this has helped. Let me know if you have any followup questions. If none, please remember to click on the ACCEPT link so that I may receive credit for working on this topic with you. (I’d greatly appreciate it!)

Thank you,
Dan

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The information provided is general in nature only and should not be construed as legal advice or to create an attorney-client relationship. You should always consult with a lawyer in your state.

PS: If an answer appears to you to have been very helpful, or to have taken above average expertise and/or research, or if the answer shows an above average amount of time and dedication devoted to your issue, a bonus is nice way to say “Thank you”.

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Dan, Retired JD
Category: Legal
Satisfied Customers: 1164
Experience: Retired attorney, general practice, with an additional background in financial planning,
Dan and 12 other Legal Specialists are ready to help you
Customer: replied 7 years ago.
Dan,
     This is a very good start. And could be the end of the judicial line also. I imagine that individuals in Vermont caught in Joint Tenancy With The Right Of Survivorship arrangements have filed partition actions with the Court and, like you write, before it goes to auction, or I would add, even before it goes too much further, the other Joint Tenancy With The Right Of Survivorship owner agrees to list and sell conventionally. But if the filing did not get to a Court ordered auction then there probably is not an adjudicated case to cite. If you are able to find a Vermont Joint Tenancy With The Right Of Survivorship case where the Court did hand down a ruling, even if it denied Petitioner’s partition request, that would be excellent and for which I’ll pay another $30. And if you find more than one on point ruling contact me and we’ll arrange for additional payment.
     Thanks in advance.
Fred
Expert:  Dan replied 7 years ago.

Fred:

The starting point is to understand that partition is a statutory right. Notice that under §5161, "A person having or holding real estate with others, as joint tenants, tenants in common or coparceners, may have partition thereof." When a party files a partition action, it triggers a process. The outcome of the process varies by the facts of the case, but the process will proceed!

In a nutshell, here is the procedure: A petition for partition is filed. Defendants may file answers. The only real defense is if "it is determined that the plaintiff has no right or share in the estate claimed." Otherwise "the court shall render judgment that partition be made and appoint three disinterested residents of the county as commissioners." The commissioners either determine how to equitably divide the property, or if they determine that the property is not divisible, they value the property and then give one or more parties the right to buy out the other (based on their fractional shares). If no one is willing to pay for and take over the other's share, the commissioners report back to the judge and the property is ordered sold. (This process has one step I hadn't mentioned to you earlier, that they first give one party the option to buy out the other before the property is ordered sold.)

Here is a copy of the relevant statutes:
Title 12: Court Procedure
Chapter 179: PARTITION OF REAL ESTATE
§ 5161. Who may have partition. A person having or holding real estate with others, as joint tenants, tenants in common or coparceners, may have partition thereof.
§ 5163. Complaint and summons; venue. A person designated in section 5161 of this title may, by serving a complaint and summons on all persons interested in the estate, bring an action to partition the real estate in the superior court of the county where the real estate or any part thereof is situated. The complaint shall state the title by which the real estate is held, the names of the several owners, as far as known, and a particular description of the premises.
§ 5169. Judgment for plaintiff; commissioners. When the issue is determined in favor of the plaintiff, or if the person interested defaults, the court shall render judgment that partition be made and appoint three disinterested residents of the county as commissioners. The commissioners shall make partition of the estate and set off each share of the several persons interested, according to their respective titles, and shall award to the plaintiff reasonable costs against the adverse party.
§ 5170. When defendant prevails in whole or in part. When, on trial, it is determined that the plaintiff has no right or share in the estate claimed, or that he holds a smaller share than alleged in his complaint, the adverse party shall recover against him reasonable costs. If the plaintiff holds a smaller share than claimed in his complaint, the judgment shall be that partition of the estate be made according to the title of the respective owners.
§ 5171. Notice by commissioners; oath; partition. The commissioners shall give notice to each party interested or to his agent or attorney, of the time when they will make such partition. Such commissioners shall be sworn and shall make partition of the estate by dividing and setting out to each owner his share thereof by metes and bounds.
§ 5172. Report; judgment. Having made partition, the commissioners shall make return to the court of their doings, with a description of each portion of the estate set off, and a certificate of their having been sworn. Unless cause is shown, such report shall be accepted by the court and judgment rendered thereon.
§ 5173. Recording of report and judgment; effect. A certified copy of the report of the commissioners, with the judgment of the court accepting the same thereon, shall be recorded in the office where by law a deed of such estate is required to be recorded, and, when so recorded, shall give such owner his share of the estate so set off in severalty.
§ 5174. Assignment or sale of estate-Assignment to party. When it appears that the real estate, or a portion thereof, cannot be divided without great inconvenience to the parties interested, the court may order it assigned to one of the parties, provided he pays to the other party such sum of money, at such times and in such manner as the commissioners judge equitable.
§ 5175. Sale, when ordered. In case one of the parties interested will not take such assignment and pay such sum, the court shall order the commissioners to sell such estate at public or private sale.
§ 5176. Sale and conveyance. The commissioners shall sell the estate agreeably to the order and execute conveyances to the purchaser thereof, which shall be a complete bar against the owners and persons claiming under them.
§ 5177. Disposal of proceeds. The commissioners shall pay the proceeds of the sale to the several parties interested or their representatives, as the court directs, first deducting such sum as is allowed by the court for the plaintiff's costs, which shall be paid the plaintiff.

Here is a case that you should find interesting. Wilk v Wilk, No. 2000-316, is a 2001 Vermont Supreme Court case. The appeal was over the fact that the trial court had ordered the petitioner's 1/8 share transferred over to the 7/8 share owner in exchange for 1/8 of $125,000 (the value of the whole property as determined by the commissioners). Petitioner wanted the whole property ordered sold instead of an order that his 1/8 could be bought out by the 7/8 holder.

The Supreme Court said:
"Furthermore, as the Billings dissent noted, partition by sale is not a favored remedy. Our statutory scheme appears to make it the exception, rather than the rule, by placing it last in priority among the powers of a trial court: sections 5169 through 5173 provide that when a party owning a partial interest in a property seeks a partition, the property should be divided among those with interests in the property by a judgment of the trial court, which is then recorded in the registry of deeds. Only if the property cannot be physically divided conveniently may the court then consider the option of assigning the
property to one of the parties in exchange for an equitable sum. 12 V.S.A. § 5174. Finally, if one of the parties will not take an assignment, the court is compelled to order the property sold. Id. § 5175. In sum, under the statutory scheme, partition in kind is preferable to assignment, and assignment is preferable to sale."
http://dol.state.vt.us/gopher_root3/supct/173/2000-316.op at page 5

The fact that partition is a given (whether it results in a physical division of the property, or an assignment of an interest that results in an equitable buy out, or a court ordered sale) is what brings people to the bargaining table usually when one party lays down the gauntlet and files this action. It is a powerful negotiating tool. The parties can come to these same ends on their own, at less cost. But often they are not willing to believe that their co-owner is really serious when they say it is time to terminate the present arrangement.

For reference, here is a 2006 case (Begin v. Benoit (2006-030) 2006 VT 130) also be the Vermont Supreme Court, which cites back to the Wilks case in support of its holding:
From ¶ 6. We first deal with defendant's argument that in deciding the parties' respective interests upon partition, the trial court lacked authority to consider plaintiff's contributions to the home prior to acquiring a legal interest in the property. In Vermont, partition is governed by statute. 12 V.S.A. §§ 5161-5188. We have recently ruled, however, that the statutes dealing with partition of real estate "should be interpreted to give the trial court as many options as possible to achieve equity between the parties, including an expansive power to assign property to one of the co-tenants." Wilk v. Wilk, 173 Vt. 343, 346, 795 A.2d 1191, 1194 (2002). Furthermore, we noted that partition actions are equitable in nature and that in such actions, "courts should consider all relevant circumstances to ensure that complete justice is done." Id. (quoting 7 R. Powell, Powell on Real Property § 50.07[3][a], at 50-40 (M. Wolf ed. 2001)). Thus, we find that while plaintiff was entitled to partition under 12 V.S.A. § 5161 only upon acquiring her joint tenancy in the property, once she brought the partition action, the court was within its right to consider her prior financial contributions to the property in an effort to equitably divide the parties' interests."
See: http://dol.state.vt.us/gopher_root3/supct/current/2006-030.eo

The key line from this excerpt is "partition actions are equitable in nature and that in such actions, "courts should consider all relevant circumstances to ensure that complete justice is done"."

If a partition action becomes necessary and has to be seen through to the end, the court will "ensure that complete justice is done". But it will come at a cost of attorney fees and court costs, because the parties could have achieved that same end on their own had they cooperated.

I hope this is what you were looking for, and that it has been helpful. Let me know if you have any followup questions. If none, please remember to click on the ACCEPT link so that I may receive credit for working on this topic with you. (I’d greatly appreciate it!)

Thank you,
Dan

--------------

The information provided is general in nature only and should not be construed as legal advice or to create an attorney-client relationship. You should always consult with a lawyer in your state.

PS: If an answer appears to you to have been very helpful, or to have taken above average expertise and/or research, or if the answer shows an above average amount of time and dedication devoted to your issue, a bonus is nice way to say “Thank you”.

Thanks!





Dan, Retired JD
Category: Legal
Satisfied Customers: 1164
Experience: Retired attorney, general practice, with an additional background in financial planning,
Dan and 12 other Legal Specialists are ready to help you

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