Detailed Answer
Under Kansas law (K.S.A. Chapter 60, Art. 10), co-owners can seek a partition sale when they cannot agree on property use or disposition. Existing mortgages remain liens on the property until paid. The court must address these liens when distributing sale proceeds.
Mortgage Priority and Payment Order: After deducting sale costs and expenses, the clerk distributes net proceeds to mortgagees in order of priority. Senior lienholders receive payment first under K.S.A. 60-201. Junior mortgage liens are paid next if funds remain.
Secured Creditor Rights: Mortgagees may intervene or file responsive pleadings in the partition action to protect their interests. If sale proceeds are insufficient to satisfy the mortgage balance, a lender may pursue a deficiency judgment as allowed by K.S.A. 58-2316.
Court-Ordered Sale and Distribution: The court issues an order under K.S.A. 60-1001 et seq. specifying sale terms, deposit procedures for proceeds, and instructions for paying liens and distributing remaining funds.
Hypothetical Example: Suppose Alice and Bob co-own land encumbered by a $50,000 mortgage to First Bank. They obtain a court-ordered partition sale for $100,000. After $5,000 in sale costs, $95,000 remains. The clerk pays $50,000 to First Bank and divides the $45,000 balance between Alice and Bob according to their ownership shares.
Helpful Hints
- Confirm each co-owner’s interest and percentage of ownership before filing for partition.
- Obtain up-to-date payoff statements for all mortgages on the property.
- Name all mortgagees in the partition complaint to ensure they receive notice.
- Request specific court orders on sale procedures and detailed fund distribution.
- Consult a Kansas attorney if there are multiple liens, complex encumbrances, or potential deficiency issues.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For guidance on your specific situation, consult a licensed attorney in Kansas.