Detailed Answer
In Nebraska, a partition action lets co-owners force a sale of jointly held real estate when they cannot agree on use or division. Existing mortgages remain attached to the property and must be satisfied from sale proceeds before any owner receives distribution.
When a court orders a sale under Neb. Rev. Stat. § 25-21,188, the property sells at public auction. The court directs the proceeds to pay:
- Sale costs (advertising, auctioneer fees, court costs).
- Senior mortgage liens, in order of recording date, per Neb. Rev. Stat. § 38-1206.
- Junior liens and judgments, in their recorded priority.
- Any unpaid real estate taxes or assessments.
After satisfying liens and costs, the remaining balance divides among co-owners according to their ownership interests or as the court decree specifies. For example, if two siblings each hold a 50% interest, and a mortgage balance of $100,000 plus $5,000 in costs is paid from a $200,000 sale, the net $95,000 splits $47,500 to each sibling.
If the sale proceeds cannot cover the full mortgage balance, the lender may seek deficiency judgments against the responsible owner(s). Nebraska law treats each co-owner’s liability based on their share and any personal guarantees.
Purchasers at a partition sale acquire title subject to all recorded encumbrances. They cannot demand the court clear liens that the sale proceeds did not extinguish.
Courts rely on Neb. Rev. Stat. § 25-21,180 through § 25-21,191 to govern partition procedure and distribution. Always verify the latest statutes at the Nebraska Legislature’s website.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Helpful Hints
- Obtain a title report to identify all mortgages and liens before filing for partition.
- Check lien priority by recording dates to estimate how proceeds will distribute.
- Ask the court for a lien payoff statement to calculate exact amounts due.
- Consider mediation to negotiate payoff splits and avoid auction costs.
- Consult a real estate attorney to review deficiency risk if sale proceeds fall short.