Pete Reid Law recently filed a partition lawsuit related to two East Austin properties owned by five different family members. The owners had reached a deadlock on what to do with the properties as home values continue to rise on East 11th Street in Austin. Pete Reid Law represented four of the five family members who together made up two-thirds of the ownership.
A lawsuit was filed in Travis County District Court that sought a partition of the Properties, and an equitable sale of the proceeds. A Partition lawsuit is governed in part by Chapter 23 of the Texas Property Code which states that:
A joint owner or claimant of real property or an interest in real property or a joint owner of personal property may compel a partition of the interest or the property among the joint owners or claimants under this chapter and the Texas Rules of Civil Procedure.
In other words, a joint owner of property can force the other owners of a property to either divide the property into separate parcels, or if that is not possible to sell the property and to have the proceeds divided proportionately between the owners.
Pete Reid Law has filed several such lawsuits in recent years relating to property owned by family members, or former couples. The right to a partition is absolute under the law, meaning that there is no effective defense to such an action that is properly brought by someone who qualifies.
However, the statute is rarely used and can be difficult to navigate. It also requires certain evidence to be presented, and several specific deadlines to be met before a Receiver can be appointed by the Court to oversee a sale. In this case, following a hearing in Travis County, the parties were able to agree on a scheduling order and on the valuation of the East Austin properties obtained by Pete Reid Law.
On the eve of a further hearing that would have appointed a Receiver, Pete Reid negotiated a favorable settlement for his clients whereby the minority owners agreed to refinance and buy out the interests of the majority owners for a cash sum. Pete Reid Law then prepared the closing documents and new title documents for the sale to proceed and to ensure that payment to be made.
The issue of properties being owned by multiple family members in East Austin is a very common one. Unfortunately, the filing of a partition lawsuit to try and force a sale is sometimes the only way for some family members to realize the value of their ownership share.