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A Partition Referee Can Help Make Breaking Up Real Estate Ownership Easier

September 27, 2016

Posted in Real Estate Law

photo - partition refereeIf you are a part owner of a piece of real estate you may have disagreements with your fellow owners about what should be done with it. If these disagreements are serious enough the best option may be to sell the property and the owners can go their separate ways. One way this can be done is through a court ordered partition referee.

The referee’s job is to get past the differences and the problems the owners may have with each other and implement a court order to sell the property. He or she needs to determine the value of the property, sell it at a fair price and distribute the proceeds according to instructions by the judge.

Disagreements between the property owners may be caused by the property itself and what to do with it now and/or in the future or there may be other differences that spill over onto the property. Business partners or shareholders may disagree about the overall management of a company that happens to own some real estate.

Partition referees enter the scene after being appointed by a judge after the judge decides the share of ownership each party has and orders the partition through an interlocutory judgement (an order which does not spell out the final outcome of the case). To get this far a party would need to prove to the court co-ownership of the property and the owners disagree as to whether it should be sold or not. Once that’s done a judge may appoint a partition referee and oversee his or her work until it’s completed.

  • The judge may require the referee to post a bond.
  • Either party may file a motion for instructions for the referee’s duties.
  • The referee may hire an attorney, real estate agents or auctioneers with court approval.

The referee should try to get the highest possible price at the best terms. Any final sale contract should state that court confirmation is needed before any sale can be finalized and the property is sold “as is.” Overbidding is allowed. At the confirmation hearing another buyer may overbid the prior highest bid. The overbid must be in writing and needs to exceed the sales price by at least 10% of the first $10,000 of the offered price and by 5% of the balance.

When the judge approves the sale the court will direct the referee to sell the property to a specific buyer with a given set of terms. After the sale or escrow closes, the referee files a report to the court and will ask for instructions on how to distribute the proceeds and ask for payment for fees, costs and to be discharged from his or her duties. When the final report is approved, an order is entered, the referee does the job as instructed then the job is complete.

If you own property with others and there are serious disagreements about the property selling it with the help of a partition referee may be a resolution worth seeking. If you have questions about partitioning real estate or think this might be right for you, contact our office so we can discuss the situation, applicable laws and the best ways to protect your legal interests and rights.