Partition Sale
A court-ordered sale of property when co-owners cannot agree on its use or disposition. Any co-owner can petition for partition, forcing a sale and division of proceeds according to ownership percentages.
Understanding Partition Sale
Partition is a legal right held by any co-owner of real property. When co-owners disagree about whether to sell, how to use the property, or how to divide it, any owner can file a partition lawsuit. The court will either physically divide the property (partition in kind) or order it sold with proceeds divided (partition by sale).
Partition by sale is more common because most properties cannot be practically divided. The court appoints a receiver or commissioner to sell the property, typically at public auction. Proceeds are distributed to co-owners according to their ownership percentages after deducting costs.
For curative title investors, partition sales present opportunities to acquire properties at below-market prices. They also serve as a tool—by acquiring even a small fractional interest in an heir property, an investor can petition for partition sale and force disposition of the entire property.
However, this strategy has become more regulated. Many states have adopted the Uniform Partition of Heirs Property Act, which provides additional protections for family owners and may require offering other co-owners the chance to buy out the petitioning owner first.
Real-World Example
An investor purchases a 10% interest in an heir property from one of twelve heirs for $5,000. The investor then files for partition. Under court supervision, the property sells at auction for $80,000. After costs, the investor receives approximately $8,000—their 10% share of net proceeds.
Texas-Specific Information
Texas adopted the Uniform Partition of Heirs Property Act in 2017 (Texas Property Code Chapter 23A). For qualifying heir properties, the court must order an appraisal, allow co-owners to buy out the petitioner, and consider factors beyond just economic value before ordering sale. This makes partition-based investing strategies more complex in Texas.
Related Terms
Heir Property
Real estate passed down through generations without clear title documentation, typically because owners died without wills and no probate was filed. Multiple heirs often share fractional ownership interests.
Fractional Interest
A partial ownership share in real property, less than complete ownership. Fractional interests commonly arise from inheritance when property passes to multiple heirs, each receiving a percentage based on their relationship to the deceased.
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