Detailed Answer

Short answer: In a Colorado partition-by-sale, the court pays valid liens and sale costs from the sale proceeds, then distributes the remaining net proceeds to co-owners according to their ownership interests (unless the court orders a different accounting for advances, improvements, or equitable adjustments).

How Colorado law handles partition sales

When co-owners cannot divide land in kind, a court can order a sale and distribution of proceeds under Colorado’s partition statutes (see Colorado Revised Statutes, partition provisions). The distribution process follows a predictable sequence:

Determine gross sale proceeds. The total amount the property sells for at closing.
Pay secured claims and liens with priority. Mortgages, recorded mechanic’s liens, tax liens, and other valid secured creditors are paid from the sale proceeds according to priority rules. Secured creditors generally have first claim against proceeds to the extent of their liens.
Deduct sale-related costs and court-ordered expenses. Typical deductions include commission to the real estate broker, closing costs, costs of maintaining or preserving the property pending sale, costs and fees for the partition action (court costs, appraisal, fees of a referee or commissioner), and any court-awarded attorney fees if the court finds they are appropriate.
Account for advances, reimbursements, and improvements. The court will consider whether any co-owner is entitled to credit or reimbursement for payments made for taxes, mortgage payments, necessary repairs, or improvements that preserved or increased the property’s value. The court may allow equitable credits or charge debits before distributing net proceeds.
Distribute the remaining net proceeds according to ownership interests. After paying liens, expenses, and applying any credits/debits, the remaining balance is divided among co-owners based on their legal ownership shares (for example, 50%, 30%, 20%), unless a contract, deed language, or court finding requires a different division.

Key examples (hypothetical)

Example 1 — Simple split:

Three co-owners: A (50%), B (30%), C (20%).
Sale price: $300,000. Mortgage payoff (senior lien): $100,000. Sale and closing costs: $10,000.
Net after liens and costs: $300,000 − $100,000 − $10,000 = $190,000.
Distribution: A gets 50% of $190,000 = $95,000; B gets $57,000; C gets $38,000.

Example 2 — Credit for expenses:

Same owners and sale result, but B paid $5,000 in urgent repairs that preserved sale value and A paid $2,000 in unpaid property taxes.
The court may credit B $5,000 and A $2,000 (or order proportional reimbursement), changing each owner’s net distribution after those credits are applied.

When the court can adjust the split

Colorado courts have equitable power to make adjustments when fairness requires it. Examples include:

One co-owner paid the entire mortgage or taxes for an extended period — the court may grant a credit.
One co-owner made substantial improvements: the court may allow an adjustment if the improvement increased value and reimbursement is equitable.
There is a written agreement among co-owners about dividing proceeds; the court generally enforces valid agreements.

Statutes and where to read them

Colorado’s partition laws appear in the Colorado Revised Statutes. For the statutory framework and procedural rules that govern partition actions and distribution of sale proceeds, consult the Colorado Revised Statutes on the Colorado General Assembly website:

Colorado Revised Statutes (official site) — search for “partition” or “13-40” (partition statutes) to view the statutory sections governing partition actions.

Practical steps in a Colorado partition sale

Obtain a clear title report to identify mortgages, liens, and priorities.
Ask the court for an accounting or appointment of a commissioner to sell and a clear order about payment of costs and liens.
Keep records of any payments you make for taxes, mortgage payments, repairs, or improvements; ask the court to credit those amounts.
Attend the partition hearing and present evidence of your ownership share, expenses, and any agreements about distribution.

Limitations, liens, and other claims

Secured creditors and taxing authorities will generally be paid from proceeds before co-owners receive their shares. Also consider bankruptcy filings or other pending litigation — they can delay distribution or change priorities. If a co-owner owes a judgment, a creditor can try to reach that owner’s share of the proceeds by attaching it.

Helpful Hints

Get a title report early. Knowing recorded liens and mortgage payoffs clarifies how much will be available for owners.
Document any out-of-pocket payments (taxes, mortgage, repairs). The court may award reimbursement or credits.
If a sale is likely, consider negotiating a buyout or settlement with co-owners — settlements avoid costs and uncertainty of litigation.
Ask the court for an accounting before final distribution so the judge can rule on disputed credits and expenses.
Understand that a written agreement among co-owners about division generally controls; bring that agreement to court if it exists.
If you face complex liens (IRS, other jurisdictions) or possible bankruptcy issues, consult an attorney promptly — lien priority and bankruptcy law can change distribution outcomes.
Expect delays: resolving liens, obtaining payoffs, and court accounting can extend the timeline between sale and final distribution.

When to talk to an attorney

Consider legal help if: liens or mortgages exist; co-owners dispute credits or ownership shares; one owner claims reimbursement for large improvements; complex creditor claims or bankruptcy issues appear. An attorney can prepare accounting evidence, request specific relief from the court, and help negotiate settlements to avoid expensive litigation.