Partition – How to Force a Sale of Co-Owned Property in Oklahoma
What happens when co-owners of real estate no longer wish to co-own property in Oklahoma? Fortunately, Oklahoma statutes allow an owner of real estate, even if they only own a small percentage of the property, to force a sale of the co-owned property in court. Unfortunately, it can take a lot of time and money in order to finally obtain a court order which requires the property to be sold.
Here are quick answers to the most frequently asked questions about how to partition real estate in Oklahoma:
What if all owners agree to sell the property? This is usually the best-case scenario for all owners. If all co-owners voluntarily agree to sell, the property can be publicly listed for sale, either for sale by owner or with a real estate agent/realtor, and the co-owners are certain to obtain a higher sale price than through partition proceedings (below).
What if one owner wants to keep the property? If all parties agree, all co-owners who wish to sell the property can choose to sell to another co-owner who wishes to keep the property. This buyout option may be another way for the exiting co-owners to maximize their sale proceeds while selling to a friendly party. This takes private agreement of all co-owners, and may not be an option if there is one person who does not want to sell. Alternatively, if multiple co-owners have fractional interests in the property, less than all co-owners can agree to sell their interest to a single continuing owner. Oklahoma allows private agreement for the sale of a co-owner’s portion of ownership in a property.
What if more than one owner wants to keep the property? Similar to the scenario above, multiple co-owners may want to keep their interest in the property and can agree to purchase the interests of the outgoing co-owners. This option may lead to a bidding war between the co-owners who wish to keep the property.
What if my co-owner does not want to sell and cannot buy my interest in the property? This is extremely common in Oklahoma. If the co-owners cannot agree to voluntarily sell the whole property, and other co-owners do not wish to purchase the others’ interests in the property, Oklahoma law allows a forced sale by partition, which is a court procedure to force a sale over the objection of your co-owners.
Who can file for partition? When real estate is owned by more than one person, any of the co-owners can file a partition lawsuit.
What does the court do in a partition lawsuit? Oklahoma court judges generally have two options when hearing a partition lawsuit; the court must physically divide the property and give each co-owner a piece of the property in proportion to their ownership interest, or, if physical division is impossible, the court must order a sale of the property and divide the proceeds of the sale between the co-owners.
Losing money in partition sale: Under Oklahoma law, properties sold at a partition sale (hosted by the county sheriff) may be sold for a minimum of two-thirds (2/3) of the appraised value of the property. That means the sale price of a property with a $300,000 value is likely to be $200,000; if the proceeds are supposed to be split 50/50 between two co-owners, each co-owner has just lost $50,000 in value. A forced partition sale is very often the worst financial outcome for the co-owners involved, making an agreed sale or buyout much more appealing options.
What if a co-owner of my property dies before we sell? The impact of an individual dying while being a co-owner at the time of their death is largely dependent upon how the legal title was held prior to the owner’s passing. There may have been a joint tenancy deed (sometimes in the form of a joint tenancy warranty deed or joint tenancy quit claim deed), warranty deed, quit claim deed, deed of trust, transfer on death deed, or more; each of these types of deeds can create different co-ownership dynamics.
A simple document recording, such as an affidavit of surviving joint tenant, may be all that is required to fix the issue after a co-owner of Oklahoma real estate dies.
However, a probate may be required in order to fix the deed/title to the co-owned property. For more on probate, see our article on the normal probate process in Oklahoma or our article on the summary probate or summary administration of a probate in Oklahoma. If the co-owner was not an Oklahoma resident at the time of passing, see our article on ancillary probate in Oklahoma.
What if a recording or probate is required and title is never fixed? This typically requires a quiet title action to resolve. See our guide to quiet title actions in Oklahoma.
Be warned! The Oklahoma statute of frauds applies to real estate: Certain types of contracts must be written and signed in order to be enforced by Oklahoma courts; agreements for the sale of real property, or an interest in real property, must be in writing and signed by the party which is being forced to comply with the contract’s terms.
Contact Avenue Legal Group to discuss the possibility of a partition lawsuit, as well as alternative strategies for maximizing the value of a co-owned property.
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