Disclaimer: This article is for educational purposes and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
In New Hampshire, partition actions are governed by RSA 547. When co-owners cannot agree on property division, the court may order sale of the property and distribution of sale proceeds. Existing mortgage obligations must be resolved before owners receive any funds.
Sale Free of Liens: Under RSA 547:5, the court-appointed commissioner sells the property free and clear of most liens and encumbrances. The commissioner then pays selling expenses, including court fees and closing costs.
Priority of Mortgages: New Hampshire follows the “first in time, first in right” rule per RSA 479:19. Mortgages recorded earlier rank senior to later ones. At closing, the commissioner satisfies the senior mortgage first, then any junior mortgages, until sale proceeds are exhausted.
Division of Net Proceeds: After paying the commissioner’s fees, sale expenses, and satisfying mortgage liens by priority, the commissioner divides remaining net proceeds among co-owners based on their ownership interests. If a specific co-owner separately mortgaged their share, that mortgage attaches to their share of the proceeds, not to other co-owners’ shares.
If sale proceeds are insufficient to cover all mortgage obligations, senior lienholders receive payment up to the available balance. Junior lienholders may receive a partial distribution or none at all, and co-owners receive their shares only after all lienholders are paid.
Helpful Hints
- Obtain a current title search to identify all mortgages and liens before filing a partition action.
- Verify mortgage recording dates at the county registry to confirm lien priorities.
- Consider mediation among co-owners to negotiate lien payoff or contribution before sale.
- Engage a real estate attorney to review potential deficiency judgments if sale proceeds fall short.
- Request a detailed accounting from the commissioner showing sale proceeds, expenses, and lien payoffs.