How will the sale proceeds be divided among co-owners after the property is sold in a partition in NH?

Detailed Answer — How sale proceeds are divided after a partition (New Hampshire)

This section explains, in plain language, how courts usually divide the money from a forced sale (partition by sale) of real property in New Hampshire. This is general information only — it is not legal advice. For the controlling statutes, see New Hampshire Revised Statutes Annotated (search chapter 547 for partition rules): gencourt.state.nh.us — RSA index.

When co-owners cannot divide property physically, one co-owner can ask a New Hampshire court to order a partition. The court either orders a partition in kind (divide the land) or a partition by sale. If the court orders sale, the court (or appointed commissioners) sells the property and divides the net sale proceeds among the owners. The distribution process follows several predictable steps:

1. Pay sale costs and administrative fees first. Costs of getting the property sold come off the top. These typically include advertising, auction or broker fees, closing costs, and the fees or compensation for any commissioners or court-appointed agents who handled the sale.
2. Satisfy mortgages and recorded liens in priority order. Recorded mortgages and liens against the property must be paid from sale proceeds according to their priority. A first mortgage is paid before a second mortgage; statutory liens (tax liens) have their own rules. If the proceeds are insufficient to pay a mortgage in full, the mortgage holder may seek a deficiency against the mortgagor(s) under state law.
3. Account for payments and credits among co-owners. After paying sale costs and liens, the court or commissioners will account for contributions and charges that affect each owner’s share. Common accounting items include:
   • Payments one co-owner made for mortgage, taxes, insurance, or essential repairs — the paying co-owner may be entitled to reimbursement or credit.
   • Improvements that enhanced value — a co-owner who paid for value-increasing improvements may receive credit for the reasonable value of those improvements.
   • Rents or profits — if one co-owner exclusively possessed the property and collected rents, the court may credit those rents to other owners or require an accounting.
   • Waste or damage — a co-owner who caused waste or damage may be charged or have an offset against their share.
4. Distribute the remaining net proceeds according to ownership shares. After adjustments, the remaining money is divided among the co-owners according to their legal interests (the shares set out in the deed or ownership agreement). If the deed or agreement does not state specific percentages, co-owners who hold as tenants in common generally take in proportion to their contributions or in equal shares if no agreement or proof of unequal shares exists. The court’s accounting determines final amounts.

Who decides these credits and priorities? In a partition action the court supervises the process. The judge or court-appointed commissioners prepare an account showing sale price, costs, lien payments, credits, and the resulting distributions. Parties can object and ask the court to resolve disputes about credits, repairs, payments, occupancy, and lien priorities.

Common practical issues in New Hampshire partition sales

• If one co-owner pays the mortgage to avoid foreclosure before sale, the paying owner typically receives reimbursement from sale proceeds, or a lien or credit, depending on court direction.
• Unrecorded agreements between owners (for example, an agreement allocating different shares) should be presented to the court with documentation; otherwise distribution generally follows the recorded deed and evidence of contributions.
• Costs of sale and legal fees are usually deducted before distribution; if the parties agreed otherwise in writing, the court may enforce that agreement.
• If sale proceeds are insufficient to satisfy secured debt, lenders may seek remaining balances from the responsible borrower(s); distribution among co-owners does not eliminate a lender’s separate rights unless the lender is paid in full.

Typical numeric example

Simple hypothetical to illustrate:

• Owners: A holds 50%, B holds 25%, C holds 25%.
• Sale price: $300,000. Mortgage: $60,000. Sale and closing costs: $18,000. Other lien: $5,000.
• Net after paying mortgage and liens and costs = $300,000 − $60,000 − $18,000 − $5,000 = $217,000.
• Assume no additional credits or charges. Distribution: A = 50% of $217,000 = $108,500; B = $54,250; C = $54,250.
• If B had paid $10,000 in permitted improvements before sale and the court awards a $10,000 credit, B’s distribution increases by that credit (either taken from the gross proceeds before the percentage split or adjusted against other owners per the court’s accounting).

Cases often involve disputes over credits and which costs should be deducted first. That is why the court’s accounting and any supporting documentation (receipts, loan records, tax bills, improvement invoices, lease records) matter a great deal.

Where to find the law

New Hampshire’s rules for partition actions and the court’s powers in such cases are found in the state statutes and court procedure. To review the statutory language, search the New Hampshire RSA online for chapter 547 (partition) at the RSA index: https://www.gencourt.state.nh.us/rsa/html/index.html. The courts also publish local forms and self-help materials describing the petition, appointment of commissioners, sale procedures, and accounting steps: New Hampshire Judicial Branch — Self Help.

Helpful Hints

• Collect and keep documents: deeds, mortgage statements, receipts for repairs and improvements, tax payments, insurance, rent ledgers. These items affect credits in the court accounting.
• Check the deed: ownership percentages in the deed usually control distribution. If it lists percentages, the court will typically honor them unless there is strong evidence of a different agreement.
• Ask for an accounting early: during the partition process request a detailed accounting from the commissioners or the court so you understand proposed deductions and credits.
• Consider settlement or buyout: co-owners can agree on a private buyout or sale terms to avoid court expense and uncertainty. A written settlement can control distribution without further litigation.
• Address mortgages quickly: a lender can force foreclosure; resolving mortgage questions before a partition sale can simplify distribution and avoid deficiency claims.
• Get professional help: consult an attorney licensed in New Hampshire for guidance tailored to your situation, to prepare evidence of credits, and to protect your legal rights in court.

Disclaimer: This is general information about New Hampshire partition sales and distribution of proceeds. It is not legal advice and does not create an attorney–client relationship. For advice about your situation, consult a licensed New Hampshire attorney.