Joint Ownership Rights - Partition, Exceptions, and Homestead

May 28, 2022

Partition usually arises when people in close relationships (family members, romantic partners, etc.) purchase or inherit property and the relationships then deteriorate to the point where the parties cannot agree on how to use or share the property at issue.

There are two forms of partition: partition in kind and partition by sale. Partition in kind is when the property at issue is physically divided between the co-owners to use as they wish. Partition by sale is when the property at issue is sold, and the co-owners split the sale proceeds. The reality is that partition in kind is usually not possible unless the real property has no buildings or other significant improvements.

Let’s look at an example. A romantic couple buys a house together and puts the title in both of their names as joint tenants. The couple eventually breaks up. It is important to highlight that the couple in this scenario is not married. Separate law governs the division of marital property, which this article does not cover. Thus, the question arises of how this couple splits their house, which is the issue that partition ultimately resolves.

The law presumes that co-owners have equal shares, so the presumption in the example above would be that the couple would evenly split the proceeds of a partition by sale. However, a party can rebut this presumption by proving that they contributed more to the property. For instance, one person may have been responsible for all the mortgage payments and utility bills while the other paid for some minor landscaping. A court will adjust both parties’ interests in the property based on the amounts of their respective contributions, so the party that paid the mortgage and utilities will come away with a larger share of the proceeds in the case of a partition by sale.

While partition by sale seems like a straightforward concept, it can quickly become very complicated. What if one member of the couple noted above had their children, and they remained in the house while the other member left to stay elsewhere. Does the fact that children live in the house change the partition analysis?

A property where parents or guardians raise children is referred to in legal terms as a homestead. If a co-owner is raising their children in a house that the other co-owner wants to partition, can the court still require partition by sale? The answer is yes.

Any individual interested in real property has the absolute right to partition by statute subject to only two exceptions in Colorado. These exceptions are: (1) when an individual has either expressly or impliedly waived the right to partition based on a separate agreement, and (2) when the property interests among the parties are not contemporaneous (e.g., one party has a life estate while the other has a remainder interest).

Colorado courts have previously referenced homestead as an “exception” to partition. Colo. Korean Ass’n v. Korean Senior Ass’n, 151 P.3d 626, 630 (Colo. App. 2006). However, the homestead exception was recently challenged in Colorado. The court found that Colorado has never formally recognized the homestead exception, and doing so would contravene the Colorado partition statute. Jones v. Jones, No. 2021CV30534 (Colo. Dist. Adams County, 2022). Colorado’s partition law establishes the absolute right of an interested party to pursue the partition of property. See C.R.S. § 38-28-101. Thus, children living in a property will not stop an interested party from getting back their investment in the property.

As noted above, some exceptions will stop partition, and understanding those established exceptions is important. The most likely exception is that a party either expressly or impliedly waived their right to partition.

Let’s change the example to understand how someone might impliedly waive their right to partition. Say that one co-owner stayed in the house with their children and contracted to pay rent for a fixed term to the other co-owner to use the entire property. The co-owner living at the property with their children cannot circumvent this agreement and avoid paying rent by initiating partition. Twin Lakes Reservoir & Canal Co. v. Bond, 401 P.2d 586, 590 (Colo. 1965). In other words, the partition cannot destroy the rights and terms created by another mutual agreement.

If your joint ownership rights to use or otherwise benefit from the property are being deprived or threatened, we can help you. Contact us today!

This blog is intended to provide general information and, therefore, should not be treated as legal advice. Please get in touch with a qualified attorney for questions about legal issues.

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