FAQ: Selling a Co‑Owned Property Through a Partition Action — Arkansas
This FAQ explains how a court-ordered sale works when co‑owners cannot agree and someone files a partition action in Arkansas. It uses a simple hypothetical to illustrate steps, rights, and likely outcomes.
Detailed Answer
Baseline concept: When two or more people own real property together (as tenants in common, joint tenants, etc.) and they cannot agree on what to do with the property, Arkansas law allows a co‑owner to ask a court to divide the property or to force a sale. This remedy is called a partition action. The court will try to divide the land in kind (physically) if that is practical; if not, the court orders a sale and divides proceeds among the owners after paying liens, costs, and expenses.
Short hypothetical
Two siblings own a rental house as tenants in common. One sibling wants to sell; the other wants to keep it. The sibling who wants to sell files a partition action in the county where the property sits asking the court to sell the house and divide the money.
Who may file
Any co‑owner of record may file a partition action against other co‑owners. The court requires that all persons with a legal or equitable interest in the property be made parties so the title can be cleared and the division final.
Typical step‑by‑step process in Arkansas
- Filing the complaint: The plaintiff files a complaint for partition in the circuit court where the property is located. The complaint describes the property, states each co‑owner’s interest, and asks the court for partition in kind or, if in kind is not practical, a sale.
- Service and joinder of parties: All co‑owners, lienholders (mortgagees), and any recorded interest holders must be named and served so the court can resolve everyone’s rights. If someone cannot be located, the court may allow service by publication.
- Possession and temporary orders: The court may issue temporary orders about possession, rents, maintenance, insurance, and who pays ongoing expenses while the case proceeds.
- Valuation and whether partition in kind is practicable: The court evaluates whether the property can be fairly divided. For some parcels, dividing on the ground is possible (partition in kind). For many single‑building properties or irregular parcels, division in kind would be impractical or inequitable, so the court orders a sale.
- Appointment of a commissioner or receiver: If the court orders sale, it typically appoints a commissioner (or sometimes a receiver) to handle the sale process, conduct an appraisal or set a sale price, advertise the sale, and carry out a public sale according to court directions.
- Sale procedure: The sale may be a public auction or other court‑ordered sale method. The court or commissioner will follow state procedural rules and any specific directions in the judgment (advertisement length, minimum bid or upset price, terms of sale, etc.).
- Paying liens, costs, and expenses: Sale proceeds are used first to pay valid liens (taxes, mortgages), then court costs, commissioner’s fees, advertising and sale costs, and any rents or repairs ordered by the court.
- Distribution of net proceeds: After liens and costs, the remaining proceeds are divided among the co‑owners according to their legal interests (percentage ownership) unless the court fixes a different equitable split based on contribution, improvements, or other factors.
- Confirmation and transfer of title: The court confirms the sale, signs an order approving the report of sale, and directs transfer of title to the purchaser. The court’s decree settles the interests of the named parties and clears title to the buyer, subject to any remaining unaddressed claims.
Key legal considerations under Arkansas law
- Partition is an equitable remedy. The court balances fairness and practicality when choosing between in‑kind division and sale.
- Liens (including mortgages and tax liens) typically survive the partition until paid from sale proceeds. Co‑owners remain responsible for liens that exceed their share unless the court orders otherwise.
- All interested parties must be joined for the court to issue final, binding relief affecting title.
- State statutes and court rules set the procedural framework for partition actions. See Ark. Code Ann. Title 18, Chapter 60 (Partition statutes) for statutory provisions and consult the Arkansas Rules of Civil Procedure for case management and sale procedures. For statutory text and updates, see the Arkansas General Assembly website: https://www.arkleg.state.ar.us/ and the Arkansas Judiciary rules page: https://www.arcourts.gov/rules
Practical outcomes and common variations
Outcomes vary. Courts often prefer sale where division would significantly reduce value or be unfair. Sometimes the court allows a co‑owner to buy out the others before sale by paying the court‑ordered share. In other cases, co‑owners agree to sell privately and submit their agreement to the court for approval, which can simplify and speed up the process.
Timeframe and costs
Partition actions can take months to over a year depending on contested issues, complexity of title, number of parties, and court calendar. Costs include filing fees, service fees, appraisal and commissioner fees, attorney fees (if awarded), and sale expenses — all of which reduce net proceeds.
Helpful Hints
- Before filing, try negotiation or mediation. A negotiated sale or buyout is almost always faster and cheaper than litigation.
- Gather title documents, deeds, mortgage statements, property tax bills, leases, and receipts for repairs and improvements. The court will want clear documentation of ownership shares and encumbrances.
- Consider an appraisal early. A professional valuation helps the court decide whether division in kind is practical and establishes a reasonable sale price range.
- If you want to keep the property, be prepared to prove ability to buy out other co‑owners or to secure financing to purchase the court‑ordered share.
- Watch for liens and unpaid taxes. They reduce the proceeds and can complicate sale and distribution unless addressed in the lawsuit.
- Ask the court about interim orders to collect rents or force repairs if a co‑owner is damaging value or withholding income from the property.
- Keep records of all expenditures and contributions; the court may consider unequal contributions when allocating proceeds.
- Tax implications: A court‑ordered sale can trigger capital gains tax or change basis calculations. Talk with a tax advisor before completing a sale.
- Consult a local attorney. Partition procedure and courtroom practice vary by county and judge. An attorney can help name proper parties, protect your rights, and present your valuation or buyout proposal effectively.