Co-Owners Who Disagree: Partition of Jointly Owned Property in Texas

The right to partition is almost absolute

Co-ownership in Texas comes with an exit. Property Code § 23.001 provides that a joint owner or claimant of real property, or of an interest in it, may compel a partition of the interest or the property among the joint owners. The owner does not need a reason, does not need a majority and does not need the others' consent. A one-tenth owner can file against the other nine.

The exception is agreement. Co-owners who signed a written agreement not to partition, or whose deed or operating documents restrict partition for a period, are generally held to it, and Texas courts enforce reasonable restrictions of that kind. That is why partnership and LLC agreements that own real estate almost always contain a waiver of partition rights. If the property is held by an entity rather than by the individuals, the remedy is a dispute among owners of the entity, not a partition suit, which is the subject of real estate joint venture and investor disputes.

Where the suit is filed

Under § 23.002(a) a partition of real property is brought in the district court of a county in which any part of the property is located. For property in Dallas County that is the civil district courts downtown. The procedure is set out in Rules 756 to 771 of the Texas Rules of Civil Procedure, which govern partition of real estate specifically.

Rule 756 requires the petition to name each co-owner and their residence if known, state the share each owner holds so far as the plaintiff knows it, describe the land well enough to distinguish it from any other, and state its estimated value. Co-owners who cannot be found, or whose identity is unknown because of an unprobated estate, are served by publication under Rule 758, and Rule 759 requires the court to appoint an attorney to defend them and to protect their rights in the decree.

Step one: the court decides shares and title

Partition is tried in two stages. In the first, under Rule 760, the court determines the share or interest of each joint owner and all questions of law or equity affecting title to the land. This is where disputed deeds, unprobated inheritances, claims that one owner's interest was conveyed away, and claims of adverse possession between co-owners are decided. It is also where the court addresses what co-owners call the accounting: credits for one owner who paid the property taxes, the mortgage, insurance or necessary repairs, and offsets for an owner who collected rent or occupied the property to the exclusion of the others.

Rule 761 then requires the court to decide whether the property, or any part of it, is susceptible of partition in kind. Texas law favors division in kind, and the owner who wants a sale instead bears the burden of showing that a fair and equitable division cannot be made. Whether land can be divided depends on its character. A quarter section of farmland usually can be. A single office building, a strip center with shared parking and a single tax parcel, or a small urban lot usually cannot, because carving it up would destroy most of its value.

Step two: commissioners divide the land

If the court finds the property can be divided, it enters a decree stating each owner's share and appoints three or more competent and disinterested persons as commissioners under Rule 761, a majority of whom may act. The clerk issues a writ of partition to the sheriff or constable, who serves it on the commissioners. The court may appoint a surveyor to help under Rule 764.

Rule 768 tells the commissioners how to divide. They split the land into as many shares as there are owners, each share containing one or more tracts, having due regard to the situation, quantity and advantages of each share so that the shares are as nearly equal in value as possible in proportion to the owners' interests. They then allot the shares by lot. Where the tracts cannot be made exactly equal, the court can order the owner who received the more valuable tract to pay the difference to the others, a payment called owelty, so that the division comes out even.

The commissioners report in writing and under oath under Rule 769, describing the tracts, the shares, the estimated value of each and the allotment, with field notes and maps. The clerk mails notice of the report to all parties. Under Rule 771 any party may object within 30 days of filing, and the objections are tried like any other issue. If the report is found materially erroneous, or unequal and unjust, the court rejects it and appoints new commissioners.

When the court confirms the report, § 23.004(b) gives each recipient a title equivalent to a conveyance by warranty deed from the other parties, and § 23.004(a) provides that each owner holds the allotted tract in severalty under the same conditions and covenants that applied before.

When the property cannot be divided: partition by sale

If the court finds that a fair and equitable division cannot be made, Rule 770 directs it to order a sale of so much of the property as is incapable of partition. The sale is for cash or on terms the court directs, and may be conducted as under execution or by private or public sale through a receiver. The proceeds come back into court and are divided among the owners according to their interests, after the credits and offsets determined in the first stage.

A court-ordered sale rarely brings the price a marketed sale would, so a partition filing often works mainly as pressure: once the sale is inevitable, the co-owners negotiate a buyout or agree to list the property with a broker and split the proceeds by an agreed formula. Courts commonly approve such agreements and incorporate them in the decree.

Example

Suppose three siblings inherit a 12-acre tract on a highway frontage in Collin County, each owning one-third. One wants to sell to a developer, one wants to hold, and the third has been paying the property taxes for six years and letting a friend graze cattle on it for free. The selling sibling files for partition. In the first stage the court confirms the one-third shares and awards the tax-paying sibling a credit for the taxes, but no charge against the others for the grazing because no rent was collected. The court finds the tract susceptible of partition in kind and appoints commissioners, who divide it into three parcels: two with highway frontage and one behind them with road access only through an easement. The commissioners value the rear parcel lower and the court orders owelty from the two front-parcel owners to the rear-parcel owner to even the values. Any sibling may object within 30 days; if none does, the report is confirmed and each sibling owns a parcel outright.

Defenses and complications

• A written agreement not to partition blocks the suit for the period it covers, if it is reasonable.
• A dispute over who owns what turns the first stage into a title trial. Unprobated estates, missing heirs and unrecorded deeds all land here.
• Homestead rights of a surviving spouse or a co-owner who lives on the property can limit or delay partition of residential property; commercial property is rarely affected.
• Liens and leases survive. Under § 23.004(c) partition does not affect other rights in the property except as the chapter provides, so a lender's deed of trust and a tenant's lease follow the land into the new parcels, and the lender may need to consent to a split of its collateral.
• Improvements built by one owner are usually credited by allotting that owner the part of the land containing them, or by valuing them in the accounting, rather than by reimbursing cost.

What it costs the owners

Partition is one of the few lawsuits where the court's costs and the commissioners' and surveyor's fees are typically charged against the property or shared among the owners by interest, since the proceeding benefits all of them. Each owner's own attorney's fees are a different matter: there is no general fee-shifting statute for partition, so each side normally bears its own unless an agreement among the co-owners says otherwise. The larger cost is usually the discount a forced sale produces and the delay while a title fight plays out, which is why most partition cases end in a negotiated buyout or a cooperative sale before the commissioners ever walk the land.

Before filing

• Pull the deed, every later conveyance and any probate records to confirm each owner's share. A gap in the chain is better found now than at trial.
• Assemble the accounting: tax receipts, mortgage statements, insurance, repair invoices and rent records for the whole period of co-ownership.
• Check for any agreement, deed restriction or entity document that limits partition.
• Get a realistic view of whether the land can be split. A surveyor or appraiser can usually say in a day whether in-kind division is plausible.
• Consider a written buyout offer first. A documented refusal strengthens the case for a sale and often ends the dispute.

Tina Wysk represents co-owners, heirs and investors in partition and title disputes over Texas real estate through the firm's real estate litigation practice. Where the title itself is clouded, a partition case often runs alongside the claims described in clearing a cloud on title.