Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for advice on your specific situation.
Detailed Answer
In Connecticut, a partition action under Conn. Gen. Stat. § 52-495 et seq. allows co-owners to divide real property when one or more owners no longer wish to maintain joint ownership. When the property is subject to an existing mortgage, the court-ordered sale and distribution of proceeds must address that lien before allocating net funds to the parties.
1. Filing a Partition and Identifying Liens
To begin, any co-owner (plaintiff) files a complaint for partition in the Superior Court. The complaint must name all co-owners (defendants) and describe the property. At this stage, the plaintiff should disclose existing mortgages, deeds of trust, or other encumbrances.
2. Court-Ordered Sale Under Conn. Gen. Stat. § 52-503
If physical division is impractical, the court orders a sale of the entire parcel. Under Conn. Gen. Stat. § 52-503 (link), the property is sold at public auction unless parties agree to a private sale.
3. Payment of Mortgage and Other Liabilities
Before distributing sale proceeds, the court applies Conn. Gen. Stat. § 52-505 (link) to pay:
- All costs of the partition action (filing fees, appraisal, auction expenses).
- Liens and encumbrances, including the outstanding mortgage balance and any senior liens.
- Real estate taxes and assessments.
If the sale price does not cover the mortgage balance, the mortgagee may pursue a deficiency judgment against the debtor-owner(s) outside the partition action, subject to state statutory limits and federal protections.
4. Division of Net Proceeds Among Co-Owners
After satisfying liens and expenses, the remaining proceeds are divided according to each owner’s fractional interest in the property, as defined by deed or by court determination if unclear. The court distributes funds by issuing checks directly to each co-owner.
5. Handling Priority and Subordination
Priority of liens controls the order of payment. A first mortgage must be paid before a second mortgage or mechanic’s lien. Co-owners should review title reports or conduct a title search to confirm lien priority before sale.
Helpful Hints
- Obtain a title report early to identify all liens and encumbrances.
- Estimate sale costs (appraisal, auctioneer’s fees) to forecast net proceeds.
- Consult with a real estate attorney to ensure proper lien satisfaction and deficiency handling.
- Consider mediation if co-owners dispute division of interests or sale terms.
- Review your mortgage agreement for clauses on sale proceeds and deficiency rights.
- Keep records of all court orders and payment receipts related to the partition sale.