Detailed Answer
Under Delaware law, co-owners can file a partition action to divide or sell jointly owned real estate (25 Del. C. § 5702). The court orders a sale if dividing the property in kind proves impractical or unfair.
When a property has an existing mortgage, the lender’s lien remains attached to the land and binds sale proceeds. Delaware courts must notify all lienholders, including mortgagees, and allow them to intervene. During the sale, the clerk applies proceeds in this sequence:
- Payment of court costs and fees
- Satisfaction of mortgages and other recorded liens (25 Del. C. § 5706)
- Distribution of net proceeds among co-owners according to their ownership shares
If sale proceeds fall short of the mortgage balance, the lender may pursue a deficiency judgment against the liable co-owner under Delaware foreclosure law. Co-owners not personally liable for the mortgage receive their full share free of the lien. The partition decree details the final accounting for advances, taxes, and improvements.
Disclaimer: This article offers general information and does not constitute legal advice.
Helpful Hints
- Review mortgage documents to confirm outstanding balances and lien priority.
- List every lienholder and mortgagee in your partition complaint to avoid surprises.
- Serve notice on mortgagees early to protect your sale timeline.
- Understand that net proceeds equal sale price minus liens, costs, and fees.
- Consider hiring a Delaware real estate attorney to guide you through the partition process.