Partition of Real Estate in Florida: Can You Divide Property Under Florida Law?

Posted By on November 12, 2013

Last Update: 7/24/18

Years ago, the Florida Legislature passed a specific law for dividing up disputed Florida real estate by requiring the filing of a lawsuit in a civil court. This type of proceeding is called a Partition Lawsuit. (See Chapter 64 of the Florida Civil Practice and Procedures Code, which details the how, when and why Florida real estate can be partitioned by court order or judgment.)
 

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When co-owners can’t agree, Florida law allows for a civil lawsuit to be filed to partition ownership of real property.

 

Florida Partition Law

Partition actions are formal lawsuits filed in the county where the real estate is located that seek to have a judge order the sale of real property and divide the proceeds among the owners.

In Florida, unlike some other states, this right of an owner to ask the Florida court to break apart or sell an interest in real estate is undeniable. However, that doesn’t mean there aren’t valid defenses to a Florida partition request.  Issues need to be addressed, including if one party paid for the upkeep of the property (therefore entitled to reimbursement), or if the property being sold for a fair price and not to a party related to one of the owners, or if one owner lived in the property without paying fair market rent to the other owner.

Why file a lawsuit asking for partition of property?

There are many reasons why Florida property owners may decide that a partition of property rights in needed. One common example is when two people are divorcing or ending a relationship and they cannot decide who should get what (or how much) real estate. Another common need for a partition action involves heirs or beneficiaries who have inherited Florida real estate and wish to force the sale of their common ownership in the property. In both of these scenarios, a formal lawsuit is filed seeking to partition the property and, if granted, a court order is entered officially partitioning their rights and interests in the real estate (a home, condo or raw acreage, etc.).  That court order is then recorded in the public records of the county where the property is located.  Essentially, the order acts acts like a deed, conveying the property from one party to another.

Florida Statute 64.041 states:

The complaint shall allege a description of the lands of which partition is demanded, the names and places of residence of the owners, joint tenants, tenants in common, coparceners, or other persons interested in the lands according to the best knowledge and belief of plaintiff, the quantity held by each, and such other matters, if any, as are necessary to enable the court to adjudicate the rights and interests of the party. If the names, residence or quantity of interest of any owner or claimant is unknown to plaintiff, this shall be stated. If the name is unknown, the action may proceed as though such unknown persons were named in the complaint.

Read: Is Sharing Ownership of Florida Real Estate Causing a Problem For You?

Rents and Profits From Income Producing Properties

In some partition actions, the real estate may be producing revenue or generating income in any number of ways.  Perhaps there is a tenant leasing a garage or an apartment on the property, or there may be some type of business operating on the land.

Partitioning property that is income-producing may require additional steps to be taken by the party seeking partition. 

Additionally, when revenue is involved, another factor to consider will be the source of the revenue stream.  In some situations, the tenant-in-common may be operating a commercial enterprise on the land. In other scenarios, the land may be leased to a third party under a residential or commercial lease.

What happens when a cotenant sues for partition of income-producing property?  This can complicate the partition lawsuit because the court must decide (1) how to divide the real estate itself (partitioning the land); and (2) how to divide the present and future revenue and profits from the partitioned land.

Accounting Of The Revenue

When the property is income producing, the partitioning party may request an “accounting” of the revenues and profits being generated by the land, as well as how much profit is being generated.  This is a separate request from asking that the judge partition the real property itself.

The accounting determines the revenue and corresponding expenses, as well as how the income is being generated. The accounting should also include what amount of revenue, if any, may have been received by the other co-tenant(s) over and beyond the petitioner’s just share.

Under certain circumstances, requesting an official accounting may be necessary.  In fact, Florida courts have held that the failure of a court to order an accounting in a partition action involving income-producing property is manifestly unjust.  This is because without the accounting, one co-tenant has the power to take all the profits of the common estate without sharing any of it with the other tenants.

Declaring a Trust Regarding the Revenue

Sometimes, the partitioner will ask the court to create a trust to hold and control the revenue generated by the real estate.  Here, the partition lawsuit includes a request that the judge declare a trust, which is a separate legal entity to oversee the revenue.  This is often requested alongside the accounting, where the trust holds and controls future revenue, such as sales proceeds (like timber revenue from forest land).

The Case Of The Partition Of Business Property After Divorce

In the case of Hughes v. Krueger, 67 So. 3d 279 (Fla. Dist. Ct. App. 2011), Norma Hughes and Hermann Krueger had been married for several years when Norma decided to file for divorce.  Their final divorce decree was entered in December, 1990.

As part of that divorce, Norma had filed a petition for partition of two properties the couple owned together.  Their two properties were located on Tiner Avenue and Oakridge Road.  One tract (Tiner) was the place where Hermann ran his business; the other (Oakridge) was leased to another business.

Norma and Hermann came to an agreement in the property settlement regarding the two tracts of land.  By the time the divorce case came to trial, the only remaining issue they asked the court to decide was to order and oversee an accounting of the income and expenses related to the tracts.

Accounting: Divide The Income Between Husband And Wife

The judge ordered an accounting, as part of the final divorce judgment.  The Original Divorce Decree was entered in December, 1990.  As for the properties subject to the partition request, the judgment awarded:

  • Hermann all of the businesses known as K & K Foreign Car Parts, Inc., and K & K Motors, Inc., as well as the assets connected with those companies; and
  • Hermann and Norma were awarded the joint ownership of the two parcels of commercial property: (1) Oakridge Road property that was being leased to a commercial tenant; and (2) Tiner Avenue property, which was used to operate K & K.

The original divorce judgment awarded these properties to Hermann and Norma as “tenants-in-common.”  Herman was awarded a 75% ownership interest and Norma got a 25% ownership interest. They were also ordered to apportion all the rental income and expenses on that percentage basis.

20 Years Later: Appeal Of The Partition Of The Rents And Profits

As time passed, Hermann continued operating his businesses at Tiner Avenue.  The couple’s son started up a little auto body business there, too.  He didn’t pay any rent.

Norma was fine with this arrangement as she rarely came by for a visit to either property despite not being barred from doing so.

During all this time, Hermann had never made any financial reporting to Norma regarding either property. He paid her a monthly amount as her share of the net rents from the Oakridge Property.  Hermann did this for almost 19 years after the divorce, periodically increasing the amounts over that time.

Norma did not get any rental money for the Tiner Property.  This was because there was never any rental income on the Tiner Property, since Hermann had exclusive possession of that property and used it for his business, and their son never paid rent.

Twenty years later, things changed.  Both Norma and Hermann returned to court and asked for a review of the divorce judgment, arguing that the 1990 partition was wrong.

Appeal Of The Divorce Judgment

Neither Norma nor Hermann were satisfied with the results and both appealed to the reviewing court.

  • Norma argued the trial court erred in its interpretation of Paragraph 7 of the original divorce judgment, which awarded the parties joint ownership of the two properties.
  • Hermann argued the judge made a mistake by combining the properties and treating them as one for the purposes of the accounting.

Hermann won, and the case was returned to the trial judge.  In performing the accounting, the trial court judge made a mistake when the accounting combined the Oakridge and Tiner Properties.  This was wrong because distinct legal principles applied to each parcel.

One of their properties was leased to a commercial third party.  One was not. Instead, it was used as the place of business for one of the tenants-in-common.

Ongoing Business

The Tiner Property held Hermann’s longstanding business, where he sold cars and car parts.  Norma, as his ex-wife, was his tenant in common.  Under Florida law, “… a tenant in common who has exclusive possession of real property and who uses it for [his] own benefit without receiving any rents or profits therefrom, is not liable or accountable to a co-tenant out of possession unless such possession is adverse to or as a result of ouster.” Goins v. Goins, 762 So.2d 1049, 1050 (Fla. 5th DCA 2000).

Norma was never ousted from Tiner.  The original divorce judgment did not give her exclusive possession.  So, Herman was deemed to have occupied the property on behalf of both parties.  Norma was not entitled to rent, except as an offset against any claim Hermann might make for contribution toward property expenses. See id.; see also Barrow v. Barrow, 527 So.2d 1373 (Fla.1988).

Leased To Commercial Tenant

The Oakridge Property was different.  It was under a long term lease (19+ years) to an independent commercial tenant, which operated its own business operations on the property from the time of the divorce through the appeal.

Under Florida law, tenants-in-common share property expenses in proportion to their ownership interest, and one “…. cotenant is accountable to the other cotenant only for actual rent received from third parties.” Fischer v. Fischer, 503 So.2d 399, 401 (Fla. 3d DCA 1987)see also Goolsby v. Wiley, 547 So.2d 227, 229 (Fla. 4th DCA 1989).

This property generated rent from a third party.   Accordingly, Norma was entitled to her proportionate share of actual rental income on Oakridge, less her proportionate share of necessary expenses.

In the appeal, Norma and Hermann had reached an agreement and filed a formal stipulation that the actual rent received on the Oakridge Property in the years following the divorce totaled $205,338.00, and that the expenses totaled $113,798.80, leaving a net income of $91,539.20.

Based upon their partition of this property, Norma’s 25% share of the net income would be a sum of $22,884.80, or 25% ($91,539.20).

The evidence of actual payments made by Hermann to Norma did not jive with this calculation.  Over the years, Hermann had paid Norma a total of $51,900.00  as her share of the Oakridge rent revenue.

Norma was found to have been overpaid by Hermann for the rental profits on the commercial tenant’s lease of their partitioned property on Oakridge Road.  She was found to owe the excess amount of $29,051.20 to Hermann because he had paid her more than the amount she was legally entitled under the partition percentages.

The Case Of The Family Partition Lawsuit

Partition actions can be emotional conflicts between the parties.  A lawsuit is filed just like in any other litigation — parties are served with a lawsuit by a process server – if there is a way to negotiate a partition of property without getting into an expensive and sometimes heart-wrenching fray, then that’s probably preferable way to handle matters for most everyone.

Consider the partition case that was a family fight that went all the way to the Florida Supreme Court back in the late 1940s, the case of the Condrey Family (Condrey v Condrey).

Here, Dad and Mom Condrey invited Son and Daughter-in-Law Condrey to live in a house that sat on the back of Mom and Dad’s land. Mom and Dad had a house up front. Son and his Wife moved into the property, converted it into a duplex, and rented out the other half. With Dad’s approval, Son kept all of rent generated by the duplex.

Sadly, eight years after this all happened, Mom and Dad became disabled in two different accidents. Being good kids, Son and Wife moved into Mom and Dad’s house up front to take care of them, and rented out their side of the duplex. The rent monies helped pay the living expenses of Son and Wife as they took care of Mom and Dad.

Everyone agrees that there was lots of talk between Mom, Dad, Son, and Daughter in Law about finances. For one thing, Son’s two sisters weren’t around but they might have a valid legal claim to part of all this land if something happened to Mom and Dad.

So the four did what you’d expect: they went and saw a Florida real estate lawyer.

In September 1949, Mom and Dad conveyed the land to the lawyer and his wife (WOW) who in turn conveyed the property to Dad, Mom, Son, and Daughter in Law as as tenants in common “with right of survivorship”. This deed had nothing to say about financial support or partitioning of the land. No separate contracts were created either.

In December 1953, Son and Wife moved away. Until they left, they had continued to take care of Mom and Dad and they had rented out that duplex in the back for money to cover household expenses for the four will they lived in the big house (as well as paying for property taxes, property insurance, repairs, and improvements).

Here came the lawsuit. Son and Wife sued for partition of the land; Mom and Dad answered back that there was an oral deal for lifetime support that was the consideration for them creating that tenancy in common with right of survivorship with the lawyer back in 1949.

The Florida Supreme Court ruled that the lower court decision was correct and that because of certain facts, including, but not limited to, that “right of survivorship” added to the tenancy description in the deed, there was an implied agreement between Mom, Dad, Son, and Wife that the land would not be partitioned.

Son and Wife lost.

From the Condrey opinion:

We are constrained to say also that under the circumstances presented in this case equity would not be done by ordering partition. We have two elderly citizens, neither completely whole in physical health nor able to support themselves. They own a home on which improvements have been made by a son, voluntarily, without expectation of payment except possibly through collection of rents from a rear building. A conveyance is made by the parents wherein a tenancy in common with right of survivorship is created between the parents and the son and his wife. It is not contended by the son that the conveyance was a gift or in payment of sums advanced for support of his parents or for improvements to the property, but rather only for the “protection” of his parents and himself and his wife.

It is not conceivable under these facts that the parents, defendants, intended by said arrangement to put themselves in position to be forced from their home or to surrender the right to live there. Obviously this would not be for the protection of the parents and could not have been, in our opinion, the intention of the parties.

What Should You Do?

A good piece of advice if you have a partition issue is to speak with an experienced Florida real estate lawyer to learn about your rights. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.

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Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.

 
 
 
 
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Comments

3 Responses to “Partition of Real Estate in Florida: Can You Divide Property Under Florida Law?”

  1. Harley says:

    Does a property being underwater have any effect on the success of a partition?

  2. Boyd says:

    If someone is a defendant in a partition lawsuit and the defendant agrees with the plaintiff to have the property partitioned and sold, would there be any reason for the defendant to hire counsel?

  3. David J says:

    The time frame from filing a partitiom suit to the sale? Can the one owner match the sale price to avoid a loss? One owner has no equity in property which can be documented, can a distribution of sale price be distributed to who paid for property and secured the mortgage?

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