Disclaimer: This article is for educational purposes only and does not constitute legal advice. For guidance on your specific situation, consult a licensed attorney.
Detailed Answer
Partition Sale Process
In Arkansas, co-owners of real property who cannot agree on its use may seek a court-ordered partition. If subdividing the land in kind is impractical, the court orders a public sale. Commissioners appointed by the court oversee the sale and deliver clear title to the purchaser free of co-owner claims. See Ark. Code Ann. § 18-60-310.
Mortgage Liens in Partition Sales
Existing mortgages create liens that attach to the property and survive a partition sale. Before co-owners receive any funds, the court must identify all recorded encumbrances, including first and subordinate mortgages. In practice, the clerk or commissioner uses sale proceeds to satisfy these liens in order of priority. If a purchaser buys the property subject to a mortgage, the lien remains until paid off or foreclosed.
Distribution of Net Proceeds
After paying sale costs, taxes, and satisfying mortgage liens, the remaining proceeds are distributed to co-owners according to their ownership interests. Under Ark. Code Ann. § 18-60-312, the commissioners must report the net proceeds and each co-owner’s share. The court then confirms the distribution, ensuring mortgage lenders receive payment before co-owner disbursements.
Helpful Hints
- Gather all loan documents and mortgage statements before filing for partition.
- Verify lien priority through a title search to estimate costs.
- Consider negotiating a payoff or refinance to simplify the sale process.
- Budget for sale expenses, including advertising, commission, and clerk fees.
- Consult a real estate attorney to ensure all encumbrances are properly handled.