Detailed Answer
Under Rhode Island law, partition allows co-owners to divide real property when they cannot agree on its use or sale. Co-owners can ask the court to order a partition by sale. The court then sells the property and divides the proceeds.
Mortgage obligations on the property remain in place after the court orders sale. Mortgages create a lien on real estate. The court must satisfy any liens in order of priority from the sale proceeds. In practice, the process follows these steps:
- Confirm the mortgage lien. Under R.I. Gen. Laws § 34-11-1 (Lien for mortgage), a recorded mortgage creates a valid lien. The court reviews the mortgage instrument and the recording date.
- Order sale of the entire property under R.I. Gen. Laws § 34-7-15 (Partition sale procedure). A referee or commissioner conducts the sale—often at public auction.
- Pay sale costs and closing fees. These include appraisal fees, advertising, auctioneer fees, and court costs.
- Distribute proceeds to secured creditors. The court applies proceeds first to satisfy the first mortgage, then any subsequent mortgages or judgments, in priority order (R.I. Gen. Laws § 34-7-17).
- Divide the net proceeds among co-owners. After lien satisfaction, the court divides the surplus among co-owners by their legal share (e.g., equal shares for joint tenants or tenants in common).
Hypothetical example: Three co-owners hold equal shares in a house with a $150,000 first mortgage. The court orders a sale and net sale proceeds fund $155,000 after selling costs. The court pays the $150,000 mortgage, then distributes the $5,000 surplus equally: each co-owner receives $1,666.67.
If a co-owner wishes to keep the property, they can “buy in” by paying off the mortgage and compensating others for their share. The court calculates the buyout amount by adding the mortgage payoff to each co-owner’s share of equity.
Key Statutes:
- R.I. Gen. Laws § 34-7-1: Persons entitled to partition
- R.I. Gen. Laws § 34-7-15: Authority to sell property
- R.I. Gen. Laws § 34-7-17: Application of proceeds
- R.I. Gen. Laws § 34-11-1: Recording liens
This information is for educational purposes. It does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Helpful Hints
- Confirm all liens by conducting a full title search before partition.
- Ask the court for a detailed accounting of sale costs.
- Consult a mortgage lender about payoff statements and redemption rights.
- Discuss a buyout option with co-owners if one wishes to retain the property.
- Hire a real estate attorney or mediator to streamline the partition process.