Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
Under Oklahoma law, co-owners can seek a judicial partition of real property under the Uniform Partition of Heirs Property Act (codified at 12 O.S. §§ 1141.1–1141.7). When the court orders a sale, the property transfers to a third‐party purchaser, and the proceeds become the fund for distribution.
All existing mortgage liens “follow the land.” A lender’s recorded mortgage remains attached to the property and must be satisfied out of the sale proceeds in order of priority. Oklahoma recognizes a “first in time, first in right” rule: the earliest recorded lien has priority over later liens (16 O.S. §§ 1–2).
1. Settlement of Costs and Liens
- Costs of sale (advertising, trustee or court costs).
- Senior mortgage liens paid in full.
- Junior liens (e.g., second mortgages, home-equity lines) in order of recording.
2. Distribution of Surplus
Any remaining funds after lien satisfaction constitute the net proceeds. The court divides these surplus proceeds among co-owners based on their undivided interests. For example, two co-owners with equal one‐half shares each receive half of the net balance.
3. Insufficient Proceeds and Deficiency Claims
If the sale price does not cover a mortgage balance, the lender may pursue a deficiency judgment under certain conditions (16 O.S. § 28). This deficiency action runs against the borrower and does not alter the division of sale proceeds.
Helpful Hints
- Obtain a current title and lien search to identify all encumbrances.
- Order a professional appraisal to set realistic sale expectations.
- Review lien priority before proceeding with partition.
- Consider negotiating payoff amounts with lenders prior to sale.
- Work with a qualified attorney or title professional for complex lien issues.