Content provided by legal writers
Personal finance website Financial Samurai has cited data from the U.S. Census Bureau that about 63% of Americans own real estate.
While the high percentage of Americans who own real estate, like homes, condos, commercial properties, and investment assets, is something to celebrate, it can also pose issues, particularly property ownership conflicts and disputes. During such instances, co-owners may have to rely on a court-ordered partition referee.
In this partition action guide, we’ll delve into what a court-appointed referee is and their roles and duties in property dispute resolution, so read on.
What Is a Partition Referee and What Roles Do They Play?
A partition referee is a neutral, disinterested third-party entity involved in partition actions. A partition action is a real estate legal process in which a co-owner of a property files a lawsuit against another co-owner. The exact definition varies from one state to another; for instance, in California, it’s a type of forced sale of real estate supervised judicially, as explained by Underwood LawFirm, P.C.
Often, partition actions arise when co-owners can’t agree on:
- What to do with the property (e.g., keep versus sell)
- How to split the property fairly
- The rightful portion of the property owned by each co-owner
When a co-owner of a piece of real estate property files a partition action, the court handling the case may require the use of a partition referee. The referee’s role is to:
- Manage the division or the sale of a jointly owned property
- Conduct a fair evaluation of the property
- Facilitate agreements between all co-owners
- Ensure efficient management of the property’s sale
A partition referee can make the process smoother for everyone while also helping ensure the outcome of the suit is equitable for all co-owners.
Who Can Be Partition Referees?
It depends on the state, but in many cases, there are no specific qualifications or competency requirements for a person to be a partition referee. They can be real estate agents or lawyers. What they cannot be, however, is an individual who:
- Serves as a clerk of the court
- Has a close association with the judge, such as an employee, spouse, partner, or blood relative (up to a certain degree)
- Has a vested interest or owns a portion of the disputed property
The above restrictions help ensure that the partition referee remains neutral and unbiased.
What Authority Do Court-Ordered Partition Referees Have?
Courts often grant partition referees significant authority to fulfill their orders and requirements related to the division or sale of a property. Here are some of the court-authorized roles referees have.
Employing a Real Estate Agent
Partition referees can hire competent real estate agents to determine a property’s fair market value (FMV). FMV is a unit of measurement that estimates the amount a real estate property would sell for, given current market conditions.
Referees can also hire real estate professionals to market and put up properties for sale.
Hiring a Lawyer
A partition action can sometimes become fraught with legal issues, such as when a co-owner disputes the “percentage” of the property they own.
An example is if one co-owner presents evidence that they have more equity in the property, such as statements showing they’ve invested more money in upgrading, renovating, or maintaining a home than the other co-owner. In this case, a partition referee may enlist the services of a real estate lawyer to help address the issues, ensuring that the division or sale of the property complies with all legal requirements.
Signing Sale Agreements and Deeds
Courts may also grant partition referees the power to enter into a sale agreement on behalf of the property’s co-owners. They may verify all the details of the agreement and sign it, helping ensure the smooth and efficient progress and completion of the sale.
Partition referees may also sign deeds and other mandatory documents to complete the sale of a property. In doing so, they assist in the official transfer of ownership from the co-owners to the new buyers.
When Would Co-Owners of a Property Need a Partition Referee?
Many cases of partition actions originally brought forward due to property ownership disputes may require the assistance of a partition referee. Some common examples include the following.
Divorcing Couples With Jointly Owned Real Estate Assets
The latest provisional data from the U.S. CDC shows that throughout 45 reporting states and the District of Columbia, there were 672,502 divorces in 2023. Given that divorces are common and that many couples have joint ownership of assets, including real estate, they may need the assistance of a petition referee if they can’t agree on what to do or how to divide properties.
Disagreements With Real Estate Inheritances
In some cases, real estate properties go to several heirs. An example is if a decedent (the term used to refer to a deceased estate owner) leaves their home to their surviving spouse and children. If the heirs disagree on whether to keep or sell their inheritance, they may need the help and expertise of a partition referee to resolve the dispute.
Business Partnerships That Fail
The non-profit organization SCORE says that within their first five years of operation, an estimated 70% of business partnerships fail. When such business partners own real estate together, they may face challenges in determining what to do with the property. One party might want to keep it, while the other may prefer to sell it.
When the partners can’t settle on an equitable decision regarding the property’s division, their situation may already warrant a partition referee. The referee can help them facilitate a fair resolution that benefits all involved parties.
Resolve Disputes With the Help of a Partition Referee
A partition referee can serve as an honest and unbiased mediator in partition cases. With their help, co-owners of properties can come to an equitable property division resolution. They can facilitate a smoother, more seamless process for dividing or selling properties that co-owners can’t agree on what to do with.
We have more real estate and legal guides on our website, so be sure to browse and read our latest news and headliners!
This content is provided by an independent source for informational purposes only and does not contain legal advice. Consult an attorney or financial advisor when making decisions. This information is provided by legal writers and does not reflect the views or opinions of The Daily Sundial editorial staff.
