Partition Actions In Colorado

1.     What Is A Partition Action?

A partition action is a civil action based on statutory law that permits the owner of real or personal property to petition the court for the properties division or sale. In short, the petitioner is asking the court to decide what happens with the property.

The court has broad discretion and power to make an equitable distribution of the property. This may include paying off any creditors and/or allocating the property between the parties.

2.     When Are Partition Actions Used?

Partition actions are used to make decisions regarding property when the owners otherwise cannot agree. Ideally, prior to filing a partition action, the owners of the property should have a calm and measured discussion regarding how the property will be divided.

If the property owners are not able to come to an agreement, the court upon the petition of one of the owners may step in and decide how the property will be split.

Lately, I have been seeing allot of partition actions for unmarried couples. If a couple marries and purchases property together, the state’s divorce law provides mechanisms for dividing that property. But if the parties are not married and purchase property together, the state’s divorce laws are unavailable. Therefore, those couples are forced to look for alternative options for dividing that property. This is where a partition action may come into play.

Partition Actions can be used for both real property including houses and personal property such as cars.

3.     Statutory Scheme as of 8/2022.

This is the current statutory scheme in place governing partition actions as of 8/2022.

PLEASE DO NOT RELY ON ANY PORTION OF THIS ARTICLE AS VALID LAW. THE PURPOSE OF THIS ARTICLE IS TO GIVE THE READERS A BRIEF OVERVIEW OF PARTITION ACTIONS. THIS IS NOT LEGAL ADVICE. LAWS AND RULES CHANGE ON A REGULAR BASIS. CONTACT AN ATTORNEY FOR THE MOST UP TO DATE LAWS.

Bringing and Maintaining the Action: Actions for the division and partition of real or personal property or interest therein may be maintained by any person having an interest in such property. C.R.S. § 38-28-101 (2022). All persons having any interest, direct, beneficial, contingent, or otherwise, in such property shall be made parties. C.R.S. § 38-28-102 (2022). The process, practice, and procedure shall be in compliance with the Colorado rules of civil procedure then in effect. C.R.S. § 38-28-104 (2022).

Powers Of Court: The court shall make a complete adjudication of the rights of all parties to such property. C.R.S. § 38-28-103 (2022). The court at any time may make such orders as it may deem necessary to promote the ends of justice to completely adjudicate every question and controversy concerning the title, rights, and interest of all persons whether in being or not, known or unknown, and may direct the payment and discharge of liens and have the property sold free from any lien or may apportion any lien among the persons to whom the partition is made. C.R.S. § 38-28-110 (2022).

Remedy Partition In Kind Default:  Upon the entry of any order for partition, the court shall appoint one or more disinterested commissioners who shall take oath to fairly and impartially make partition of the property in accordance with the decree of court. Such commissioners shall view the property and make partition thereof in writing, assigning to each party his share, and shall submit the same to the court for confirmation. Objections may be filed by any party within the time fixed by the court. C.R.S. § 38-28-105 (2022). The commissioners appointed by the court, with the approval of the court, may divide any lands involved in such action into lots or parcels, streets, and alleys and file a map or plat thereof in compliance with law and applicable ordinances. C.R.S. § 38-28-106 (2022).  

Remedy Partition By Sale Procedure: If the commissioners report and the court finds that partition of the property cannot be made without manifest prejudice to the rights of any interested party, the court may direct the sale of such property at public sale upon such terms as the court may fix. Notice of such sale shall be given in the same manner as may be required by law for sales of real estate upon execution. C.R.S. § 38-28-107 (2022). The person making such sale shall make report thereof to the court for confirmation, and upon confirmation, the court shall direct the execution of a proper instrument of conveyance to the purchaser. The court shall direct the distribution of the net proceeds of such sale and any undistributed income from such property among the persons entitled thereto. C.R.S. § 38-28-108 (2022).  

Paying the Commission and Broker: The court shall fix the compensation of the commissioners and the person making the sale and may order the payment thereof, with costs, expenses, and attorney’s fees, out of the proceeds of such sale or make any other order which it deems best for the payment of such compensation, fees, and costs. C.R.S. § 38-28-109 (2022).

4.     So What Does That Mean?

In short, C.R.S. 38-28-101 to C.R.S. 38-28-110, provides a rubric the dictates the requirements for bringing and maintain a partition action, the required procedure, and grants power to the court.

5.     Allocation

Part of the court’s job is to make a complete adjudication of the rights of all parties to such property. C.R.S. § 38-28-103 (2022). The court has broad power to make orders regarding the property and pays special attention to what each party puts into the property.

PLEASE DO NOT RELY ON ANY PORTION OF THIS ARTICLE AS VALID LAW. THE PURPOSE OF THIS ARTICLE IS TO GIVE THE READERS A BRIEF OVERVIEW OF PARTITION ACTIONS. THIS IS NOT LEGAL ADVICE. LAWS AND RULES CHANGE ON A REGULAR BASIS. CONTACT AN ATTORNEY FOR THE MOST UP TO DATE LAWS.

If the property owners each own an undivided one-half interest, then the process described in Keith v. El-Kareh, 729 P.2d 377 (Colo. App. 1986) and Martinez v. Martinez, 638 P.2d 834 (Colo. App. 1981) applies.

Typically, the court will start by assigning each party a 50% interest in the property. Once the property has been divided, the court may then to reach an equitable result, compute the contribution of each owner and offset any amount owing against the one-half share held by each owner.

The math behind this process is more than I want to cover today. But in short, petitioners should expect the court to consider the contributions of each party in determining how much they should receive from any sale of the property.

6.     Sale Versus Division

In Colorado, the court favors dividing the property over selling the property. But if it would be unfair to divide the property, the court may choose to sell it. In those cases, the court is looking for manifest prejudice to one party. But all this being said, parties often agree to sell the property and skip the division process. It really comes down to what the parties want.

7.     Why Hire An Attorney?

While at first glance the partition statutes do not seem overly complex, the procedure for implementing it can become very complex.  

a.     Rules Of Procedure: Partition actions need to be brought in district court. As such, petitioners need to be familiar with local court rules and practices.

b.     Proof: Owners need to be disciplined and provide detailed records and proofs to show their contributions to the property. Failure to follow court procedure can result in negative results that may affect your end allocation.

c.      Statutory Procedure: Owners must comply with the partition statutes very stringently. Failure to do so may result in the dismissal of your case. Often this comes into play when a petitioner fails to join a required party.

d.     Associated Actions: Partition actions often run hand in hand with other legal actions such as breach of contract suits, unjust enrichment, and other. Anyone bringing this type of action needs to be aware of the possible countersuits that may arise.

e.     Math: Do I need to say more? Partition actions are very tedious and data-heavy actions. There are some more exciting points, but potential clients should not expect an exciting trial like seen on TV. It is of the utmost importance to develop a clean and detailed record so that the court can apply the proper factors and come to the correct decision.

f.     Percentages: I never guarantee an outcome for any type of litigation proceedings. Often partition actions involve the potential client’s primary home. The stakes are high here. Yes, a person can do a partition action by themselves but it is not recommended. With the rising home prices in Colorado, 1% point can make a big difference. My goal in a partition action is to fight for those percentage points. I can’t always get them. All I can promise is hard work.

Potential clients should shop around and think long and hard if hiring an attorney is their best option.

8.     Costs

The costs of a partition action can vary widely depending on a multitude of factors. Here are a few.

a. Duration: Typically the longer an action lasts, the more expensive it is. Actions that can be resolved early with settlement or procedural processes typically tend to cost less than an action that is litigated to the very end.

As such, settlement is always my initial recommendation, for the simple fact that a well-drafted contract can do a good job in resolving a large majority of common issues including selling the property.

b. Complexity: The more complex the problem, the more work is needed for the attorney, judge, and jury (if applicable) to understand it.

c. Experts: Some partition actions are going to require the retention of multiple experts related to the case.

d. Discovery: This goes back to complexity. Discovery is the process of uncovering and finding information. This can be a daunting or relatively simple process depending on the case. For example, which rule of civil procedure applies, how long do I need to find the information, do I need an expert to look at the information, do I need a subpoena, do I need a deposition, can I get by with a written question, and so on. This is often a large portion of the costs.

e. Residential v. vacant land v. commercial: The type of property at issue will also play a roll in the overall cost.

f. Cost To Benefit Ratio: While every case requires a certain level of attention, it may be appropriate to prioritize what should be done for a particular case in relation to the property’s value. For example, if the property is only worth $5,000, litigation may not be the appropriate option.

g. Other: There are many factors that come into play when determining costs.

9.     Deferred Payment/ Fixed Fee/ Flexibility

a. Defered Payment: Often on partition actions, I can defer payment of my legal fees until the property sells. While you are still responsible for those fees regardless of the outcome, I have found this structure can really help to reduce the financial burden on potential clients.

b. Fixed Fee: In certain situations, it may be appropriate to discuss overall costs upfront and structure everything into a fixed fee agreement meaning you pay a set fee for the services. I rarely do this arrangement when dealing with litigation but we can discuss it as a possibility.

c. Flexibility: The nice thing about being a solo practitioner is that I can be flexible. If you have an idea, let me know. The worst I can say is no. But if you have a reasonable request that would make your life easier, I am open to hearing it.

10.  What Do I Need To Get Started

a.     Setup A Free Case Evaluation: Potential Clients should fill out the free case evaluation form and get an appointment on the books. At this appointment, you can ask any questions you may have with a licensed attorney.

b.     Make A List: Make a list of all the improvements and payments that you have made on the property.

c.      Gather Documents: At the heart of any partition action is documentation. The potential client needs to be able to show each and every payment they made on the property. Once you have your list or improvements and payments, gather receipts and source documents for each item. If you made a payment, pull the bank record, canceled check, and invoice. In short, the better-documented cases tend to fair better than the undocumented cases. In addition, gather all the contracts associated with the property.

d.     Organization: Organize all your documents and payments into an easy-to-follow form. The less footwork the lawyer has to do to understand your documentation, the cheaper it is.

e.     Patience: Partition actions are a long and stressful process. While I try my best to reduce my client’s stress, potential clients should be ready to answer questions and engage in the process.   

Thank you for taking the time to read this article. I love litigating partition actions because they present very unique problems. If you are interested, I encourage you to fill out the free case evaluation form.

PLEASE DO NOT RELY ON ANY PORTION OF THIS ARTICLE AS VALID LAW. THE PURPOSE OF THIS ARTICLE IS TO GIVE THE READERS A BRIEF OVERVIEW OF PARTITION ACTIONS. THIS IS NOT LEGAL ADVICE. LAWS AND RULES CHANGE ON A REGULAR BASIS. CONTACT AN ATTORNEY FOR THE MOST UP TO DATE LAWS.