Short answer

When a court orders a partition sale in Oregon, the court (or the court’s appointed representative) pays valid liens, mortgages, sale costs, and court-ordered charges first. The remaining net proceeds are then distributed to the co-owners according to their ownership interests, subject to any claims for reimbursement, offsets, or adjustments the court orders because one party paid expenses, made improvements, or caused waste. See ORS Chapter 105 for the statutory framework: ORS Chapter 105.

Detailed answer — how division normally works (step by step)

1. Establish ownership shares.

   Net proceeds are usually divided based on each co-owner’s legal interest in the property (for example, a 50% undivided interest, a 30%/70% split, tenants in common shares, etc.). If co-owners have no written agreement allocating shares, the court determines legal interests from deeds and title documents.

2. Pay priority claims and liens.

   The sale pays valid encumbrances first: mortgages, recorded liens, and any statutory liens against the property. These are typically paid out of sale proceeds before co-owners receive funds.

3. Deduct sale-related costs.

   Costs of the partition sale are deducted next. These often include the sheriff or commissioner’s fees, advertising, escrow fees, real estate broker commissions, title clearing expenses, closing costs, and court costs.

4. Account for court-ordered fees and awards.

   The court may order payment of attorney fees, accountings, or other charges from the sale proceeds if allowed by statute or equitable principles. Any such court-ordered charges come out of the proceeds before distribution.

5. Make equitable adjustments or reimbursements.

   If one co-owner paid taxes, mortgage payments, made improvements, or otherwise contributed more than others to the property’s upkeep or enhancement, that co-owner can ask the court for reimbursement or an offset. The court may credit those amounts against that co-owner’s share before the final distribution.

6. Distribute the remaining net proceeds by ownership interest.

   After satisfying liens, costs, and any court-ordered adjustments, the remaining money is divided according to each owner’s interest in the property.

Illustrative example (hypothetical)

Three co-owners own a rental house as tenants in common: A = 50%, B = 30%, C = 20%. The property sells for $300,000.

• Mortgages/liens to pay: $60,000
• Sale costs + broker commissions: $18,000
• Net after liens and costs: $300,000 – $60,000 – $18,000 = $222,000
• Assume B paid $6,000 of back property taxes and asks for reimbursement. Court allows $6,000 reimbursement to B.
• Remaining after reimbursement: $216,000
• Distribute by ownership: A gets 50% ($108,000), B gets 30% ($64,800), C gets 20% ($43,200).

Note: The court might treat the $6,000 reimbursement as reducing B’s share before distribution (i.e., B effectively receives $64,800 including reimbursement), depending on how the court structures the order.

When can a co-owner get more than their paper ownership percentage?

A co-owner can receive more than their nominal share if the court awards reimbursement for payments they made (mortgage payments, taxes, necessary repairs) or if another co-owner is responsible for waste or unauthorized depletion of value. The court uses equitable rules to avoid unjust enrichment.

When might a co-owner receive less than their percentage?

If a co-owner owes a lien against their interest (for example, a judgment lien) or the court awards offsets to another co-owner for expenses the other paid, that owner’s payout can be reduced. Also, unpaid joint liabilities tied to the property (taxes, HOA liens) reduce the distributable proceeds.

Relevant Oregon statutory framework

Partition actions in Oregon are governed by ORS Chapter 105. The chapter explains how a partition action proceeds and gives courts authority to order partition in kind or by sale and to resolve claims related to liens, costs, and distribution. See ORS Chapter 105: https://www.oregonlegislature.gov/bills_laws/ors/Pages/105.aspx.

Important: The court has broad equitable powers in partition cases. Facts such as who made improvements, who paid expenses, and agreements between owners affect the final split.

Practical steps for co-owners before and during a partition sale

• Gather title documents and deeds that show each owner’s percentage interest.
• Collect receipts and records for payments one owner made for taxes, mortgage installments, repairs, or improvements.
• List all recorded liens and mortgages on the property (title search helps).
• File a detailed claim in the partition action if you seek reimbursement or an offset; support it with documentation.
• Consider mediation or settlement: co-owners can agree on allocation of proceeds instead of leaving it to the court.
• Talk to a lawyer about preserving your rights and presenting reimbursement claims or defending against offsets.

Helpful hints

• Keep good records: payments, improvements, and communications among co-owners are critical evidence in court.
• Confirm exact lien amounts using a current title report before you calculate expected distributions.
• Expect sales costs (broker fees, advertising) to reduce net proceeds significantly—plan accordingly.
• If you paid a mortgage or taxes to preserve the property’s value, timely seek reimbursement in the partition action.
• Consider selling by agreement if possible: an agreed sale and split avoids court costs and can be faster and cheaper.
• Ask whether the court will appoint a referee or commissioner to handle the sale; that person often oversees disbursements and accounting.
• Consult a lawyer if complicated liens, disputes over contributions, or allegations of waste arise—the court’s equitable powers can produce nuanced outcomes.