Detailed Answer
Under West Virginia law (WV Code § 37-5-1 et seq., https://code.wvlegislature.gov/title37/chapter5/), a court-ordered partition sale must address existing mortgage liens before distributing sale proceeds. Mortgages remain attached to the property until satisfied. In a partition sale:
- Mortgages stay on title. The property sells subject to recorded mortgages. Buyers take title free of cotenants’ rights but subject to mortgage liens.
- Escrow of proceeds. The sale officer holds proceeds in escrow pending lien satisfaction and cost payment, per WV Code § 37-5-9 (WV Code § 37-5-9).
- Priority of payment. Mortgage liens rank by recording date under WV Code § 38-4-2 (WV Code § 38-4-2). Senior liens are paid first, then junior liens, then sale costs.
- Deficiency judgments. If proceeds fall short of lien balances, mortgagees may seek a deficiency judgment against cotenants proportionally based on their ownership interest.
- Distribution of net proceeds. After paying mortgages and sale costs, the clerk distributes remaining funds among cotenants according to their ownership shares.
Hypothetical Example
Suppose Owners A, B, and C co-own a farm subject to a $100,000 senior mortgage and a $20,000 junior mortgage. A partition sale yields $110,000. The clerk pays off the senior mortgage in full, then applies $10,000 toward the junior mortgage. The junior lender may pursue a $10,000 deficiency judgment against A, B, and C. No proceeds remain for distribution.
Helpful Hints
- Search county land records to identify all recorded mortgages before filing for partition.
- Order a title search to confirm lien priority and amounts owed.
- Negotiate mortgage payoffs with lienholders to maximize net proceeds.
- Understand that deficiency judgments can follow if sale proceeds don’t fully satisfy mortgages.
- Consult a licensed attorney for guidance on partition procedure and lien resolution.
Disclaimer: This article is for educational purposes only and does not constitute legal advice.