Detailed answer — what happens to proceeds after a partition sale in Vermont

When a Vermont court orders a partition sale of property owned by two or more people, the court supervises the sale and then directs how the money from that sale (the gross proceeds) is handled. The basic sequence that determines your share of the net proceeds is:

1. Payment of sale costs. Reasonable costs of the sale are paid first. Those costs generally include the sheriff’s or auctioneer’s fees, advertising, appraisal, court costs, and any costs the court finds necessary to make the sale fair.
2. Payment of liens and encumbrances in priority order. Recorded mortgages, tax liens, and other valid liens on the property are paid from the proceeds according to their priority (normally determined by the order of recording). If the sale did not pay a lien in full, that lienholder may claim the remainder against the proceeds or pursue other remedies against the purchasers or the debtor.
3. Payment of court-ordered expenses and allowances. The court may allow payment of attorney fees, receiver or trustee fees (if a receiver handled the property), and costs related to partition litigation. Vermont courts may account for equitable adjustments — for example, credits for improvements or for waste caused by one co-owner — before final distribution.
4. Distribution of the net proceeds to co-owners according to ownership shares or court determination. After those deductions, the remaining money (the net proceeds) is distributed. Distribution usually follows the owners’ legal interests (for example, tenancies in common normally share according to each owner’s fractional interest). However, the court can make adjustments if one co-owner paid mortgages, taxes, or made improvements that warrant an equitable credit or charge against another owner’s share.

Vermont law provides the procedural framework for partition actions and related distributions. To find the statutes and rules that govern partition and distribution in Vermont, you can search the Vermont statutes for “partition” at the Vermont Legislature website: https://legislature.vermont.gov/statutes/search?search%5Bvalue%5D=partition. The court’s order in your specific case controls the details of distribution.

Practical steps you should take to get your share

1. Obtain a certified copy of the final sale order or distribution order. The court’s decree will specify how proceeds will be distributed. Request a certified copy from the court clerk if you do not already have one.
2. Confirm who is holding the money. After a partition sale the funds are commonly held by the court registry, a sheriff/auctioneer, or by the purchaser’s closing agent. The court order should identify where the funds are.
3. Provide any required paperwork to the clerk or disbursing official. The disbursing official (court clerk, sheriff, or escrow holder) will likely ask for identification and may require W-9 or other tax paperwork before issuing a check. If you want payment wired or sent to an attorney, supply the required authorization and account details.
4. Collect funds according to the court’s order. The disbursing official should issue payment to each payee set forth in the order. If the order directs distribution by percentages, the checks will reflect those amounts. If the court ordered that one co-owner receive all funds and then pay others, follow the court’s instructions closely and get receipts.
5. If a co-owner fails to turn over money that was awarded to you, enforce the court order. If another co-owner is required to pay you from their share and refuses, you can file a motion to enforce the judgment with the same court (contempt, execution, garnishment, or other post-judgment remedies). The court has tools to compel compliance.

Common complexities and how Vermont courts address them

• Mortgages and secured liens: Proceeds pay lienholders in priority. If there are unpaid mortgages, the former owners may not receive money until mortgage holders are paid. You should obtain a title search or ask the clerk for the list of liens paid from the sale.
• Contributions, credits, and reimbursements: If one co-owner paid the mortgage, property taxes, or made substantial improvements before sale, they may seek an equitable credit against their share. The court will review evidence (receipts, bank records, testimony) before awarding credits.
• Costs and attorney fees: The court sometimes orders that litigation expenses be paid out of proceeds, especially if one party acted unreasonably. Ask the court for a clear accounting of fees deducted from the proceeds.
• Security for minor or incapacitated owners: The court may order special handling (e.g., funds held until a guardian or trustee is appointed) to protect vulnerable owners’ shares.

Hypothetical example

Imagine three co-owners — A (50%), B (25%), and C (25%) — who own a house. The court sells the house for $300,000. Sale costs and liens total $60,000 (advertising, sheriff fees, and a mortgage). The net proceeds are $240,000. In the absence of credits or special court findings, the court will distribute $240,000 according to each owner’s percentage: A receives $120,000; B receives $60,000; C receives $60,000. If B had paid $10,000 of property taxes before sale and the court awards B a reimbursement, B’s distribution would be increased by that $10,000, with corresponding adjustments to others as the court orders.

How to handle problems: what to do if you don’t receive your share

1. Verify the court’s final order and the disbursing agent named in the order.
2. Ask the clerk for a disbursement accounting showing deductions and payees.
3. If the funds were paid to another co-owner who refuses to pay you, file a motion to enforce the court’s order in the partition case. Remedies include entry of judgment, garnishment, levy, or contempt proceedings.
4. If a lienholder claims more than the sale paid, consult an attorney about your rights — the court may reallocate residual liability among owners or allow the lienholder to pursue deficiency actions.

Helpful Hints

• Get a certified copy of the court’s final distribution order — it is your primary proof for collecting funds.
• Keep receipts and records of any mortgage, tax, or improvement payments you made; bring them to the court if you seek a credit.
• Ask the court clerk for an itemized accounting of all deductions from the sale proceeds.
• Provide required tax or identity forms early (W-9, photo ID) so the disbursing agent can issue payment promptly.
• If you anticipate disputes, consider hiring an attorney to protect your rights during the accounting and distribution phases.
• Search Vermont statutes and rules for “partition” on the Vermont Legislature site for statutory language and local procedure references: https://legislature.vermont.gov/statutes/search?search%5Bvalue%5D=partition.