Detailed answer: How Michigan divides sale proceeds after a partition sale

Short answer: After a court orders a partition by sale in Michigan, the court first pays the costs of sale and any valid liens (mortgages, tax liens, recorded judgments) from the gross sale proceeds. The remaining net proceeds are then divided among the co-owners according to their ownership interests, subject to court-ordered adjustments (credits or debits) for payments or improvements made by particular co-owners. The partition statutes for Michigan are found at MCL 600.2801 et seq.; see the statute start here: MCL 600.2801.

How the division process usually works (step-by-step)

Sale and collection: The property is sold (often at public sale or a court-approved private sale). The sheriff or court usually oversees collection and accounting.
Pay secured claims and sale costs: From the gross sale price the court or clerk pays: (a) recorded, valid secured liens (mortgages, tax liens, judgment liens) in their priority order; (b) costs of sale such as broker commission, closing costs, advertising, and court costs; and (c) any statutory costs the court orders. These payments are made before owners receive distribution.
Net proceeds calculated: After liens and sale expenses are paid, the remainder is the net distributable proceeds.
Adjustments for payments/benefits: The court may adjust the shares to reflect equitable claims. Examples: one co-owner paid taxes, mortgage payments, insurance, or made substantial improvements prior to sale. The court can allow credits (or charge debits) so each co-owner bears fair share of outlays. The partition statutes and equitable accounting guide the judge’s discretion (see MCL 600.2801 et seq.).
Distribute by ownership shares (adjusted): After adjustments, the court divides the net proceeds among owners according to their ownership interests (for example, 50/50, tenants in common shares, or other recorded fractional interests), as adjusted for credits/debits.

Common items deducted before distribution

Outstanding mortgages and recorded liens (paid in priority order).
Real estate brokerage commissions and closing costs.
Real property taxes and special assessments owing at sale.
Court costs, sheriff fees, advertising, and sale administration fees.
Reasonable attorney fees when allowed by statute or court order.

Examples (simple hypotheticals)

Example A — Straight split by ownership percentage:

Three co-owners hold the property: A 50%, B 25%, C 25%.
Sale price: $300,000. Liens and sale costs (mortgage payoff, broker fee, closing) total $73,000.
Net proceeds: $300,000 − $73,000 = $227,000.
Distribution: A gets 50% of $227,000 = $113,500; B and C each get 25% = $56,750.

Example B — credit for outlays by one co-owner:

Same ownership split, but B paid $10,000 in property taxes and emergency repairs to preserve the property.
The court may allow B a credit for those outlays before division, either reducing the lien burden or increasing B’s distributive share. If the court awards the full $10,000 credit, B’s distributive portion increases accordingly.

When the simple percentage split can change

If one co-owner has a prior recorded lien or judgment against them affecting the interest, the lien may be paid from that owner’s share or from the proceeds before distribution.
If one co-owner paid more than their fair share of mortgage or taxes, the court may order reimbursement or alter distributions to achieve equity.
If a co-owner successfully seeks partition in kind and keeps a portion of the land instead of sale, proceeds distribution will reflect the value allocated to each retained portion.
If the court orders attorneys’ fees or other equitable adjustments, those change net proceeds or individual shares.

Relevant Michigan law

Partition actions and orders in Michigan are governed by the partition statutes (MCL 600.2801 and following). Those statutes explain who may bring a partition action, how the court may order partition in kind or by sale, and how the court handles sale and distribution. See: MCL 600.2801 et seq.

How to protect your share before or during a partition

Keep clear written records: receipts for taxes, mortgage payments, repairs, and improvements you paid.
Record your ownership interest in the county land records (deed) so your interest and priority of liens are clear.
If you and co-owners can, try negotiation or buyout instead of court-ordered sale—this can save costs and allow an agreed split.
Ask the court for an accounting and for credits for necessary outlays you made to preserve the property.
Consider mediation before or during litigation to agree on distribution and reduce fees.

When to get an attorney

Partition law mixes statute, equity, and complex lien priority rules. You should consult a Michigan real property attorney if you have any of the following:

Competing claims about ownership percentages.
Disputes over credits for improvements, taxes, or mortgage payments.
Multiple liens (mortgage, tax, judgment) that affect distribution.
Possible deficiency or contested sale procedures.

An attorney can help request an accounting, argue for or against credits, and protect your share of the proceeds.

Helpful Hints

Document everything: keep invoices, bank statements, canceled checks, and photos for any work you paid for.
Ask for an interim accounting: courts can require a detailed accounting of receipts and disbursements related to the sale.
Confirm lien priority: secured creditors are paid first. If you want a particular lien paid from sale proceeds, ensure it is recorded.
Know common deductions: broker commissions, closing costs, real estate taxes, and mortgage payoffs reduce net proceeds before distribution.
Consider a buyout: a negotiated buyout can preserve value and avoid sale costs; get a professional appraisal to set fair price.
Meet procedural deadlines: respond to filings and appear at hearings; failing to act can forfeit rights or credits.

Disclaimer: This article explains general Michigan law about partition sales and distributions. It is not legal advice. For advice about your specific situation, contact a licensed Michigan attorney who can review all documents and facts. Laws and procedures change; rely on a lawyer for decisions affecting your rights.