Detailed Answer
Short answer: After a court-ordered partition sale in North Dakota, your share of the net proceeds is paid according to the court’s final decree or distribution order. To get your money you must (1) obtain the court’s final distribution order or the escrow closing statement, (2) confirm the payoff of liens, mortgages, and sale costs, and (3) present the order or closing documents to the party holding the funds (court clerk, sheriff, or escrow agent). If someone refuses to turn over funds, you can ask the court to enforce the decree.
What a partition sale does and who decides distribution
A partition action asks the court to divide property owned by co-owners who cannot agree. When physical division is impossible or impractical, the court orders a sale and directs how to distribute the proceeds. The court’s judgment of partition (sometimes called a final decree of sale and distribution) controls how the net sale proceeds are divided among the co-owners.
North Dakota law governs partition actions through the state statutes on real property. For the statutory framework on real property and partition procedures, see the North Dakota Century Code, Title 32 (Real Property): https://www.legis.nd.gov/cencode/titles/32. The court’s order and any accompanying sale procedures determine timing and method for distribution.
Step-by-step: How to get your share
- Get a copy of the final decree and closing documents. Ask the county clerk of court for the final judgment of partition and the clerk’s register entries. If an escrow agent handled the sale, obtain the closing statement (HUD-1 or settlement statement) from the escrow or title company.
- Confirm who holds the sale proceeds. Proceeds may be held by:
- the court clerk or county treasurer;
- a court-appointed commissioner or sheriff;
- the escrow or title company that closed the sale.
The final decree or sale order normally identifies the holder.
- Review the payoff accounting. The net proceeds equal the gross sale price minus valid encumbrances and costs: mortgages and other liens, property taxes, sale expenses (real estate commission, advertising), closing costs, court costs, and any fees awarded by the court (attorney fees if awarded). Ask the clerk or escrow officer for an itemized payoff statement and compare it with your records.
- Provide required paperwork to receive payment. The paying party will usually require identification and a completed payee form (for example, W-9) before issuing payment. If you are receiving a check, specify whether you want direct deposit, check mailed, or pick-up at the clerk’s office.
- Collect your payment. Once the holder has the final order and has confirmed payee information, they should issue your share according to the percentage or interest the court ordered. Keep records: a copy of the decree, the closing statement, and your receipt of funds.
- If funds are withheld or a co-owner objects. If someone refuses to cooperate or the holder refuses to disburse funds as ordered, you can file a motion in the partition case asking the court to enforce its decree. Remedies include an order directing payment, an order holding someone in contempt, or a writ of execution to compel payment. The court may also appoint a receiver or order garnishment if appropriate.
Common issues and how to resolve them
- Outstanding liens or later claims: The court pays liens with priority before dividing the remainder. If a previously unknown lien appears after sale, the holder may retain funds until the issue resolves. You may need to return to court to correct distributions.
- Dispute over ownership shares: If co-owners argue about ownership percentages, the court resolves ownership first; distributions follow the resolved percentages.
- Money held by escrow: If the sale closed through an escrow or title company, that company will distribute according to the court order and the closing statement. Provide identification and a W-9 and ask for a copy of the settlement statement.
- Delays in distribution: Normal delays include time to pay off mortgages, confirm lien releases, satisfy tax obligations, or wait for the appeal period to expire. If delay is unreasonable, file a motion for distribution.
Practical example (hypothetical)
Suppose the house sold for $200,000. Valid liens (mortgage and a judgment) total $140,000. Real estate commission and closing costs are $10,000. Court costs and fees are $2,000. Net proceeds = $200,000 – $140,000 – $10,000 – $2,000 = $48,000. If you own a one-half undivided interest, your share is $24,000 (subject to any adjustment the court orders).
Tax and paperwork considerations
- The sale may generate tax reporting (for example IRS forms such as 1099-S) and potential capital gains. Consult a tax advisor about filing and whether you qualify for any exclusion.
- Keep copies of the decree, closing statements, lien releases, and the deed. These records protect you if questions arise later.
When to get a lawyer
You should consider hiring an attorney if:
- the distribution calculation is contested;
- unknown liens arise after the sale;
- a co-owner refuses to cooperate with distribution;
- you need help enforcing the court’s order or pursuing contempt or execution remedies.
Helpful Hints
- Obtain and keep a certified copy of the court’s final decree and the escrow closing statement.
- Get an itemized payoff showing mortgages, liens, commissions, and costs before distribution occurs.
- Provide identification and a completed W-9 early so the paying party can issue your payment quickly.
- Check county clerk records to confirm the deed and sale have been recorded; distribution often follows recording and lien releases.
- If you believe the holder is withholding funds improperly, file a short, focused motion in the partition case asking the court to order disbursement.
- Talk to a tax professional about reporting the sale and any capital gains consequences. Keep the settlement statement for tax records.
- When in doubt about procedure or disputes, consult a North Dakota real property attorney to protect your rights and speed the distribution.
Disclaimer: This article explains general information about partition sales and distributions under North Dakota law. It does not constitute legal advice and is not a substitute for an attorney’s guidance. For advice specific to your situation, consult a licensed North Dakota attorney.