How can I get my share of the net proceeds after the partition sale of a co-owned house? (KY)

This FAQ explains how net sale proceeds are handled after a court-ordered partition sale of co-owned real estate in Kentucky and what you can do to collect your share. This is a general explanation only and is not legal advice.

How the money flows after a partition sale

When a Kentucky court orders a partition by sale, a court-appointed officer (often a commissioner or sheriff) sells the property. The sale proceeds are first used to pay sale costs and any liens that have priority (for example, recorded mortgages and tax liens). Any remaining money becomes the net proceeds held for distribution among the co-owners according to their ownership interests or the court’s allocation.

Kentucky’s partition rules are set out in the Kentucky Revised Statutes (see KRS Chapter 381): KRS Chapter 381.

Typical distribution steps you can expect

1. Clerk or court officer deposits sale funds into the court registry or a designated account.
2. The court administrator or clerk pays valid liens, mortgages, taxes, and costs from the proceeds.
3. The court issues a distribution order allocating the remaining net proceeds to the co-owners based on the court’s determination of each owner’s share.
4. The clerk disburses funds to the co-owners or their attorneys according to that order.

What to do to get your share — step by step

Follow these practical steps immediately after the sale:

• Find the case number and the circuit court where the partition case was handled. Keep copies of the sale order and distribution order.
• Contact the clerk of the court that handled the partition. Ask whether the net proceeds are in the court registry, and request an itemized accounting showing gross sale price, costs, lien payments, and net balance.
• Confirm how the court calculated each co-owner’s share (percentage ownership, credits or offsets granted by the court, or special allocations in the judgment).
• If the court has already issued a distribution order, follow the order’s directions to receive your check or electronic payment through the clerk’s office or the attorney who appeared for you.
• If no distribution order has been entered even though funds are in the registry, file or ask the court for a proposed order of distribution in the partition case. Ask the court to schedule a quick hearing for distribution.

Problems and enforcement options

If the clerk or other co-owners delay or refuse to pay your share, you can:

• File a motion in the same partition case asking the judge to order immediate distribution and to compel accounting of the funds held in the registry.
• If someone violates a court distribution order, you can return to the court that issued the order and move to enforce it. Remedies may include contempt proceedings or an order directing the clerk to deliver funds.
• If funds were misapplied or wrongfully disbursed, you can ask the court to reconstitute the registry and to adjust distributions; if necessary, file a separate action to recover the money.

How liens, mortgages, and creditor claims affect your share

Claims that attach to the real estate (recorded mortgages, mechanic’s liens, tax liens) generally must be paid from sale proceeds before owners receive distributions. The court follows lien priority rules when clearing title and paying creditors. Any remaining unsecured claims by a co-owner against other co-owners (for contribution toward mortgage payments, taxes, or repairs) are typically handled by the court in the partition case or by a separate accounting and may increase or reduce individual shares.

Timing and likely delays

Distribution timing varies. The clerk must wait for clear title issues to resolve and for payment of liens and sale-related expenses. If the sale triggers title disputes or lien challenges, distribution can be delayed until those claims are resolved. Expect a few weeks to several months in complex cases.

Tax and recordkeeping considerations

Sale proceeds may create tax consequences. The seller(s) may receive IRS Form 1099-S or other tax reporting for proceeds. Keep records of your basis in the property, closing statements, and the court’s distribution order. Consult a tax professional about capital gains or other tax issues.

When to hire an attorney

Consider hiring a Kentucky attorney if:

• You cannot get a clear accounting from the clerk or co-owners.
• Someone refuses to follow the court’s distribution order.
• Complex lien, title, or contribution disputes affect your share.
• You need help filing motions or attending a court hearing to enforce distribution.

For the statutory framework, review Kentucky’s partition statutes at: KRS Chapter 381.

Disclaimer: This information is educational and not legal advice. It does not create an attorney-client relationship. For legal advice about your situation, consult a licensed Kentucky attorney.

Helpful Hints

• Keep all sale documents and the court file number in one place. The clerk will ask for the case number frequently.
• Ask the court clerk for an itemized accounting of the sale proceeds and the exact sums applied to liens and costs.
• Get a written distribution order before accepting any partial payment. A signed court order protects your rights if disputes arise later.
• If you think you paid more than your share of mortgage or taxes, request a court credit or accounting in the partition case.
• Be aware of deadlines. If you must file a motion to enforce or appeal, prompt action is important.
• Before spending your share, confirm there are no outstanding claims or liens that could require returning part of the funds.
• If you are unsure about tax consequences, save funds to cover possible capital gains and consult a tax advisor before filing tax returns.