Insight

Solutions to Common Real Estate Co-Ownership Conflicts

If you are involved in the co-ownership of property, there are a few common scenarios you should know to navigate. When it comes to real estate co-ownership, a partition is just one solution to look into.

Handling Real Estate Co-Ownership Conflicts
Eric B. Smith

Eric B. Smith

May 31, 2019 12:10 PM

The co-ownership of real estate can arise in many different ways. Many times, it is with the best intentions that the parties decide to own property together. Co-ownership often arises from:

  • A devise in a will or a conveyance by a trust to several individuals as co-owners;
  • A business decision, such as partners owning property together;
  • A family decision, to own a vacation property, investment property, or a family property, together;
  • A family decision to pass down family owned real estate to successive generations;
  • A real estate investment, where several individuals decide together to invest in a piece of real estate;
  • The result of a divorce.

Co-owners of real estate are generally either co-tenants or joint tenants.[1] Both involve co-owning real estate with at least one other person. Regardless of the source of co-ownership of property, the cause of the ownership is usually either voluntary (in the case of a person’s decision to co-own real estate with another) or involuntary (a person finds themselves as a co-tenant through someone else’s decision).

In either scenario, you always have the right to terminate the co-ownership of real estate and seek recovery of permitted monetary claims against the other co-owners. Monetary claims you may have might include:

  • The payment (or non-payment) of property taxes;
  • Repairs or maintenance for the preservation of the property;
  • The payment of rental value by a co-tenant in possession or control of the real estate;
  • Claims for damages to the property for neglect or waste;
  • Claims in connection with timber, crops, rentals, or appropriate proceeds from the land.

Problems typically arise in the co-ownership of the property when:

  • One co-tenant, or owner, "takes over" the real estate by either making all decisions, excluding some or all other owners, or physically occupies the property to the exclusion of some or all other owners;
  • Some or all of the co-tenants no longer can afford to own the property;
  • Personality differences break down cooperation about the property and its management;
  • Some of the owners decide that they no longer want to own the property;
  • Some or all of the owners decide to exclude other owners;
  • Some of the owners decide to buy out other owners;
  • Fewer than all owners decide that they want to sell the property.

Many co-tenants of co-owned real estate feel trapped in these scenarios. They continue to co-own real estate over which they have no control, no possession, no profit, all while watching another co-tenant occupy the property and run a successful business while paying no rent, or another owner resides at the property and pays no rent, or, the land just remains under-utilized, but taxes and repair bills mount. Often because the property is co-owned with family, friends, or business associates, decisions that are ordinarily hard to make, become impossible to make, and discussions “about the land” quickly turn into controversial encounters. Fortunately, there is a way to untangle the web of co-owned property and the rights of a co-tenant.

Finding a Solution

There are two chief remedies when addressing these problems.

The first, and most powerful, is partition. Partition is a legal remedy which allows one or more co-owners to divide or liquidate the co-owned real estate into the respective interests of each owner, and the allocation of related claims, such as rent, as discussed below, taxes, repairs, and waste. The partition process is completely provided for in Pennsylvania’s Rules of Civil Procedure, with every step of the process outlined. Nevertheless, attorneys who are not familiar with this process often completely overlook this step-by-step guide provided by the court’s own procedural rules. The partition process even provides for the right to a private sale as between the parties, if one or more of the co-tenants desire to buy-out the other owners. What must be remembered is that every co-tenant of real estate is permitted to partition co-owned property, unless there is an agreement between all co-owners that limits those rights.

The second remedy is the right to rental value. 68 P.S. Section 101 is straightforward and provides:

In all cases in which any real estate is now or shall be hereafter held by two or more persons as tenants in common, and one or more of said tenants shall have been or shall hereafter be in possession of said real estate, it shall be lawful for any one or more of said tenants in common, not in possession, to sue for and recover from such tenants in possession his or their proportionate part of the rental value of said real estate for the time such real estate shall have been in possession as aforesaid;  and in case of partition of such real estate held in common as aforesaid, the parties in possession shall have deducted from their distributive shares of said real estate the rental value thereof to which their co-tenant or tenants are entitled.

Although recoverable in a partition action, rental value itself may be the subject of an independent suit against another co-tenant in possession by a co-tenant not in possession. Therefore, a co-tenant out of possession may enforce their right to a share of the rental value, whether or not the rent is actually collected.

Similar rights exist as between co-tenants regarding the growing of crops, or the timbering of the land, and mining for coal. Further, in a proper case, a co-tenant may seek an accounting with respect to these matters.

Word of Caution

Before voluntarily entering into the co-ownership of real estate, be certain to know your rights, and limitations, as to the real estate and between co-tenants. Likewise, remember, that every co-tenant, even of the smallest fraction, enjoys ownership and possession rights to 100 percent of the property unless limited by a written agreement. Therefore, as an example, an owner with a 5 percent interest in the real estate, may enjoy 100 percent of the property 100 percent of the time, even if it is contrary to the wishes of the co-owners that own the other 95 percent of the interest in the property. An unhappy co-tenant may always seek partition.

If you have a question concerning your rights involving co-owned real estate, please contact Eric B. Smith, Esquire, 215-540-2653 or esmith@timoneyknox.com.

--------------

[1] The difference between co-tenants and joint tenants is not explained here. Should you have a question concerning the difference in these two forms of ownership, please contact the author.

Related Articles

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

IN PARTNERSHIP

The Wolf Near Wall Street


by Rebecca Blackwell

When tensions among shared real estate owners reached their tipping point, Adam Leitman Bailey P.C. stepped in and solved a modern issue with an ancient remedy.

New York Real Estate with Adam Leitman Bailey

There’s Hope for the Canadian Real Estate Market Post COVID-19


by Steven Tulman

Clover Mortgage offers advice and predictions on the Toronto real estate market as we move on post-pandemic.

Canadian Real Estate Market Post COVID-19

Brick to Click


by Lindsay Mesh Lotito

Trends in commercial real estate have been fast-tracked by the pandemic. Here’s what lenders and borrowers must do to ensure their viability in a rapidly changing world.

Online Shopping Shifts Commercial Real Estate

East Side Story


by Adam Leitman Bailey

The made-for-Hollywood tale of a 16-year legal tussle to help a dedicated band of Manhattan “homesteaders” take ownership of the buildings they had moved into and begun to rehab.

Rosario Dawson's Family Fight for NY Building

Shake On It


by Justin Smulison

The importance of proper documentation in real estate dealings is highlighted by the legal repercussions many have faced after brokering non-binding handshake deals.

Real Estate Handshake Deals Are Non-binding

House Trap


by Heidi E. Storz

Special districts are often being used as profit centers that leave residents to foot the bill. These homeowners deserve protection from unscrupulous developers who attempt to fleece them and avoid accountability.

Special Districts Changing Property Ownership

Announcing the 2022 Best Lawyers: Real Estate and Infrastructure Publication


by Best Lawyers

Featuring the top legal talent from The Best Lawyers in America, Best Lawyers: Ones to Watch in America and "Lawyer of the Year" recipients for real estate and infrastructure as well as thought leadership from some of the nation's top lawyers.

Real Estate and Infrastructure Publication

When a Dream Home Becomes a Nightmare


by Peter B. McGlynn and Robert Stetson

A modern-day Bleak House* offers a cautionary tale about buying real estate—and a legal strategy that helped our clients gain redress.

Blueprint of a house with yellow caution signs

Gimme Shelter


by Janice Zhou

Being able to afford housing in Boston, and other desirable cities like it, is increasingly out of reach for too many. What can be done, legally and politically, to combat the problem?

Housing Shortage in Boston

WATCH: Best Lawyers Discusses COVID-19 & Rental Agreements


by Best Lawyers

Three legal experts join the CEO of Best Lawyers to talk about a general approach to “the rental” market and what happens if tenants can’t pay rent in May.

COVID-19 Panel: Rental Agreements

Is This a Once in a Lifetime Opportunity to Refinance Right Now?


by Roy D. Oppenheim

If you wish to stay in your current home and refinance or buy a new home, now is the time

Should You Buy a Home During This Pandemic?

Impact of Climate Change on Real Estate Law


by Best Lawyers

Dr. Christian Schede discusses rent in large cities, the effect of Airbnb, and more.

An Interview With Greenberg Traurig

Eyes Set on Lincoln Road Development


by Best Lawyers

Plus other news involving South Florida's Best Lawyers

Eyes Set on Lincoln Road Development

An Interview With Bryan Cave Leighton Paisner


by Best Lawyers

Russia’s 2020 “Law Firm of the Year” honoree for Real Estate Law

Bryan Cave Leighton Paisner–LFOTY

Changing for the Better


by Justin Smulison

Joseph Brophy’s Austin-based boutique firm comprises some of the most talented and experienced civil litigators in Texas.

Betting on Finance, Civil Litigation Success

Trending Articles

Announcing the 2023 The Best Lawyers in America Honorees


by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

Best Lawyers: Ones to Watch in America for 2023


by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

The Best Lawyers in South Africa™ 2023


by Best Lawyers

Best Lawyers proudly announces lawyers recognized in South Africa for 2023.

South African flag

Could Reign Supreme End with the Queen?


by Sara Collin

Canada is revisiting the notion of abolishing the monarchy after Queen Elizabeth II’s passing, but many Canadians and lawmakers are questioning if Canada could, should and would follow through.

Teacup on saucer over image of Queen's eye

Famous Songs Unprotected by Copyright Could Mean Royalties for Some


by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?

IN PARTNERSHIP

2022: Another Banner Year


by John Fields

Block O’Toole & Murphy continues to secure some of New York’s highest results for personal injury matters.

Three men in business suits standing in office

Announcing the 2023 The Best Lawyers in Canada Honorees


by Best Lawyers

The Best Lawyers in Canada™ is entering its 17th edition for 2023. We highlight the elite lawyers awarded this year.

Red map of Canada with white lines and dots

Wage and Overtime Laws for Truck Drivers


by Greg Mansell

For truck drivers nationwide, underpayment and overtime violations are just the beginning of a long list of problems. Below we explore the wages you are entitled to but may not be receiving.

Truck Driver Wage and Overtime Laws in the US

What the Courts Say About Recording in the Classroom


by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

The Upcycle Conundrum


by Karen Kreider Gaunt

Laudable or litigious? What you need to know about potential copyright and trademark infringement when repurposing products.

Repurposed Products and Copyright Infringemen

Thirteen Years of Excellence


by Best Lawyers

For the 13th consecutive year, “Best Law Firms” has awarded the most elite and talented law firms across the country through a thorough and trusted data review process.

Red, white and blue pipes and writing on black background

Caffeine Overload and DUI Tests


by Daniel Taylor

While it might come as a surprise, the over-consumption of caffeine could trigger a false positive on a breathalyzer test.

Can Caffeine Cause You to Fail DUI Test?

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

Announcing the 2022 Best Lawyers® in the United States


by Best Lawyers

The results include an elite field of top lawyers listed in the 28th Edition of The Best Lawyers in America® and in the 2nd Edition of Best Lawyers: Ones to Watch in America for 2022.

2022 Best Lawyers Listings for United States

Announcing The Best Lawyers in Australia™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Australia.

The Best Lawyers in Australia™ 2023

Announcing The Best Lawyers in Germany™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Germany.

Black, red and yellow stripes