Detailed Answer
This explains how a court divides sale proceeds when a property is sold after a partition action in Ohio. The court follows the Ohio partition statutes (Chapter 5307 of the Ohio Revised Code) and established practice. See Ohio Rev. Code Chapter 5307: https://codes.ohio.gov/ohio-revised-code/chapter-5307.
Step 1 — Who owns what?
The court first determines each co-owner’s legal interest in the property. The division usually follows the ownership shares shown in deeds, title records, or other evidence (for example: 50%, 30%, 20%). If owners hold title as tenants in common, each shares a dividable portion. If title says joint tenants with right of survivorship, the court still may partition the property, but the exact legal effect of survivorship can affect outcomes.
Step 2 — Decide partition in kind or sale
When physical division is practical, the court can order partition in kind (divide the land). When division is impractical or inequitable, the court orders sale and directs how to distribute the proceeds. The statutory process and remedies are in R.C. Chapter 5307 (linked above).
Step 3 — Pay liens, mortgages, costs, and taxes first
Before dividing net proceeds, the court must satisfy:
- Recorded mortgages and liens on the property (in order of priority).
- Property taxes and assessments secured by the property.
- Costs of the partition action, including the court-ordered sale costs (advertising, auction fees, broker commission) and court costs.
- Reasonable attorney fees if the court awards them.
Liens attach to the property itself and are typically paid from sale proceeds according to their priority. Any portion of the proceeds needed to clear liens is paid before owners receive their shares.
Step 4 — Distribute remaining proceeds according to ownership shares, with accounting adjustments
After paying liens and sale/court costs, the court distributes the net proceeds to co-owners according to their legal interests. If one co-owner has a larger recorded share, that owner receives a proportionally larger share of the remainder.
The court can also make adjustments (an accounting) to reflect contributions or inequities. Examples of adjustments include:
- Credit for a co-owner who paid the mortgage payments, taxes, or necessary repairs that benefited the property.
- Reimbursement to a co-owner who made agreed improvements that increased the value prior to sale.
- Charges against a co-owner for waste or damage caused by that owner.
Parties can present evidence and ask the court to order these credits or charges. If parties reach a written agreement before or during the action, the court usually enforces it.
Other points that affect distribution
- Judgment liens against an individual co-owner (not recorded against the property) may still be enforceable against that owner’s proceeds after the sale; creditors can attach to the owner’s share.
- If a co-owner has a separate lien recorded against the property (for example, a mechanic’s lien), that lien is paid from proceeds before distribution to owners.
- If the court orders costs or attorney fees against a particular party, the amount may come out of that party’s share.
- Federal or state tax liabilities are not automatically satisfied by the partition sale unless a lien exists against the property or a creditor takes court action to reach a co-owner’s proceeds.
Simple numerical example
Hypothetical facts: three co-owners own a house as tenants in common with shares of 50%, 30%, and 20%. The court orders sale. Sale price: $300,000. Mortgage balance (recorded) paid at closing: $50,000. Sale costs and broker fees: $20,000. No other liens.
- Gross sale price: $300,000
- Less mortgage payoff: $50,000 → remaining $250,000
- Less sale costs: $20,000 → net proceeds $230,000
- Distribute by ownership share:
- 50% share → $115,000
- 30% share → $69,000
- 20% share → $46,000
If the 20% owner had paid $10,000 in necessary repairs before sale and asked the court for reimbursement, the court might credit that amount before distribution, changing the net shares.
How to protect your interest
- Keep clear records of payments you make for mortgage, taxes, repairs, and improvements.
- Record any liens or agreements that you intend to enforce against the property.
- Attempt a written agreement among co-owners about sale method and division before asking the court to intervene.
- Ask the court for an accounting if you believe contributions or deductions require adjustment of shares.
Where to find the law
Ohio’s partition statutes are in Chapter 5307 of the Ohio Revised Code. Read the statutory text here: https://codes.ohio.gov/ohio-revised-code/chapter-5307. For specific procedures or questions about priorities of liens and other technical issues, review the statutes or consult a lawyer.
Helpful Hints
- Before filing or responding to a partition action, gather deeds, mortgage statements, tax bills, receipts for repairs, and any written agreements among owners.
- Ask the court for an accounting if you think your contributions (taxes, mortgage payments, repairs) justify a credit.
- Remember: recorded liens on the property get paid from sale proceeds first. Your net check comes after liens and authorized costs are paid.
- Consider mediation. Co-owners can often negotiate a sale and distribution plan that saves time and expense compared with contested litigation.
- If you have unpaid personal debts or judgments, expect creditors to try to reach your share of proceeds after the sale.