FAQ: How are sale proceeds divided among co-owners after a partition sale in Georgia?

Short answer: In Georgia, when real property is sold by court-ordered partition, the net sale proceeds are distributed according to each owner’s legal share of the property, after first paying liens, mortgages, taxes, sale costs, and any court-ordered credits or adjustments (for improvements, advances, waste, or unequal contributions). The court supervises the process and can order equitable adjustments where appropriate.

Detailed answer — how the division works under Georgia law

Partition actions in Georgia are governed by state property law (see Title 44 of the Official Code of Georgia Annotated for partition rules). A partition proceeds in one of two basic ways:

Partition in kind: The court divides the physical land among co-owners if the property can reasonably be divided without unfairness.
Partition by sale: If the property cannot be fairly divided (most common for single-family homes, condos, or parcels not susceptible to fair division), the court orders a sale and the proceeds are divided.

When the court orders a sale, it will direct how the proceeds are handled. The normal order of distribution is:

Payment of the costs of the sale — including the commissioner’s fees or auction costs, closing costs and any court-ordered sale expenses.
Payment of valid liens that have priority against the property — typically recorded mortgages, tax liens, and other recorded encumbrances.
Payment of unpaid property taxes and assessments that are liens on the property.
Payment of court costs and attorney’s fees if the court orders them paid from sale proceeds.
After the above, remaining funds are distributed to the co-owners according to their ownership shares, subject to credits or debits the court orders. Examples of adjustments the court may make include crediting a co-owner who paid mortgage payments, taxes, or insurance; charging for waste or destruction by a co-owner; or crediting value of improvements made by a co-owner.

Two important points about the ownership share that controls distribution:

Legal title/express shares: If deeds, wills, or agreements record unequal shares (for example, A owns a 60% interest and B owns 40%), the sale proceeds generally follow those recorded ownership percentages.
Default rule — tenants in common: If multiple people own property as tenants in common and the deed does not specify percentages, Georgia treats them as owning equal shares by default. The court will divide proceeds equally unless evidence shows a different intent or contributions justify adjustments.

Credits, debits, and equitable adjustments

Georgia courts have equitable powers in partition proceedings. Even when legal title shows certain shares, the court can adjust final payments to reflect fairness: for example, it may give credit to a co-owner who paid the mortgage after purchase, paid taxes, or made valuable improvements that increased the sale value. Conversely, the court may charge a co-owner who committed waste (damaged the property) or unjustly withheld access.

Where the money goes after sale — practical flow

In practice, proceeds from the sale are usually deposited with the court or the court’s appointed commissioner. The clerk runs an accounting: liens/lenders are paid first from the proceeds; sale costs and taxes are paid; and the court then issues an order distributing net proceeds to owners in the amounts it determines proper.

Simple hypothetical example

Facts: Three co-owners own a house as tenants in common (no deeded shares). The home sells for $300,000. There is a mortgage of $120,000 and $6,000 in unpaid property taxes. Sale costs (commission, closing, commissioner fees) total $24,000.

Step-by-step:

Sale price: $300,000
Less mortgage payoff: $120,000 => $180,000 remaining
Less unpaid taxes: $6,000 => $174,000 remaining
Less sale costs: $24,000 => $150,000 net to distribute
If owners are equal (three owners, 1/3 each): each receives $50,000 — unless one can prove they paid extra mortgage payments or made improvements that merit a credit or a court orders otherwise.

Which Georgia statutes and rules apply?

Partition procedures and the court’s equitable powers are contained in the Georgia Code under Title 44 (Property). You can search the Official Code of Georgia Annotated and find the Partition provisions through the Georgia General Assembly website: https://www.legis.ga.gov/. Look under Title 44 (Property) for chapters and sections on partition and sale.

Common complications that change distribution

Recorded liens or mortgages against the property — these are paid first and reduce net proceeds.
Agreements among owners — written agreements that allocate shares or specify buyout formulas will control if lawful.
Contributions and improvements — a co-owner who paid the mortgage, taxes, or made valuable improvements may be entitled to a credit.
Unequal possession or rents — if one owner occupied the property and collected rents (or deprived others of rents), the court can account for that.
Creditors of individual co-owners — liens against a particular owner (not the property) are typically separate; but judgments that attach to a co-owner’s interest could affect distribution.

Helpful procedural notes for co-owners

Collect and preserve deeds, mortgage records, tax payment receipts, insurance payments, improvement invoices, and receipts for any expenses you paid — these support requests for credit.
If you think you own a greater share than the deed shows (based on contribution or agreement), raise that in the partition action and provide evidence.
If there are mortgages or liens, talk to the lender(s) early — payoff statements and lien releases speed up distribution.
Be prepared for the court to appoint a commissioner or sheriff to sell the property and to hold proceeds until distribution is ordered.
Understand that appeals or disputes about credits can delay the final distribution of funds.

When to talk to an attorney

Because partition actions mix statutory rules, recorded lien priority, and equitable adjustments, consult a Georgia property or real estate attorney if:

You dispute your ownership percentage;
You paid mortgages, taxes, or made improvements and want a credit;
There are complex liens, judgments, or claims against the property or an owner;
You want to file or defend a partition action.

Where to read the statutes: For the official text, search the Official Code of Georgia Annotated (Title 44) on the Georgia General Assembly website: https://www.legis.ga.gov/. That site contains the statutory provisions covering partition procedures and related rules.

Helpful Hints

Check the deed first — ownership percentages often appear in the recorded deed. If deed is silent and owners are tenants in common, the court may treat shares as equal.
Record and present proof of any payments you made (mortgage, taxes, insurance) to seek credit.
Know that recorded mortgages and tax liens usually take priority and are paid from sale proceeds before owner distributions.
Expect the court to handle sale proceeds through a commissioner or the clerk to ensure proper lien payoff and accounting.
Keep communication open with co-owners; negotiated buyouts or settlements often save time and fees compared with contested sales.
Get legal advice early if there are disputes about shares, liens, or credits — equitable adjustments can materially affect your payout.

Disclaimer: This article explains general principles of Georgia property law related to partition sales. It is for educational purposes only and is not legal advice. For advice about a specific situation, consult a licensed Georgia attorney who can review your deeds, liens, payment records, and the facts of your case.