Detailed Answer
Under Florida law, a partition action allows co-owners of real property to divide their interests when they cannot agree on continued joint ownership (Fla. Stat. § 64.011). When the court orders a sale instead of a physical division, the property goes to public auction under Fla. Stat. § 64.031. Existing mortgages remain liens on the property and survive through the partition sale.
At closing, the clerk of court or designated trustee applies the sale proceeds first to satisfy all recorded liens, including mortgages, in order of priority. For example:
- If Co-Owner A has a $100,000 mortgage and Co-Owner B has a $50,000 second mortgage, the clerk pays off the $100,000 first, then the $50,000, from the sale proceeds (see Fla. Stat. § 64.031).
- If the sale price is $180,000, the first mortgage is paid in full ($100,000), the second mortgage receives $50,000, and $30,000 remains as net equity.
The remaining balance (in this example, $30,000) gets divided among the co-owners according to their ownership interests, as established in the partition decree or by agreement. If sale proceeds fall short of a mortgage’s outstanding balance, the lender may pursue a deficiency judgment under the foreclosure statutes (for example, Fla. Stat. § 697.07), but co-owners do not generally owe out-of-pocket for that shortfall unless they signed personally on the note.
Key points under Florida law:
- Mortgages stay attached to the property until sale and are paid in priority order (Fla. Stat. § 64.031).
- Net proceeds—sale price minus liens, costs, commissions, and court fees—get split by ownership share.
- Creditors may seek a deficiency from the borrower, but co-owners are only liable to the extent they guaranteed the debt.
- Purchasers at a partition sale take title subject to any unpaid liens or redemption rights.
For the full text of the partition sale statute, see Fla. Stat. § 64.031: leg.state.fl.us/statutes/0064.031. For deficiency judgments, see Fla. Stat. § 697.07: leg.state.fl.us/statutes/0697.07.
Helpful Hints
- Obtain a current payoff letter from the mortgage servicer before the sale.
- Review the title report to identify all liens and their priority.
- Confirm any homestead or tax exemptions that may affect net proceeds.
- Discuss potential deficiency risks if sale proceeds won’t cover outstanding debt.
- Retain a title company or closing agent experienced in partition sales.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.