In his novel, Bleak House, Charles Dickens spins a tale involving seemingly never-ending litigation over a piece of real property passing through the Jarndyce estate. In Virginia, real property passing through an estate to more than one person (either by will or to the owner’s heirs when the owner does not leave a will) can be a real problem leading to lengthy and expensive litigation.
First, it is important to dispel some misunderstandings. One of the most common misunderstandings I hear is that anyone can acquire title to real property in Virginia just by paying the real estate taxes. Regardless of how many years a co-owner pays the taxes, those payments will not divest the other owners of their interests in the real property. It may be possible to be reimbursed for some real estate tax payments in litigation to sell the property (more on partition suits later) but it simply is not possible to “get the property titled in my name” just because you (or your ancestors) paid the real estate taxes.
Another common misunderstanding is that property continues to pass fairly automatically through the surviving heirs of the original owner until it becomes owned by just the last one. Instead, ownership passes to the beneficiaries under the owner’s will or to the owner’s heirs at the time of the owner’s death and, then, the interest of each beneficiary or heir passes to the beneficiaries under the will of that co-owner or to that co-owner’s heirs when that co-owner dies.
You can see how quickly people end up with practically worthless interests in real property passed down through their family. For example, if an owner died and left property to just two children and each succeeding generation of owners each left their interests to just two children apiece, each great-grandchild of the original owner would own just a one-eighth interest in the property. Because there is practically no market for one-eighth interests in land, each great-grandchild’s interest would be practically worthless. Of course, few families have just two children in each generation. I have seen many cases in which the fractional interests of some co-owners were much, much smaller.
The law allows most co-owners to file a partition suit to deal with this unfortunate result. Unless all the co-owners are known and agree on some other way of dealing with the property, a partition suit may be the only way for any co-owner to get the title cleared. In Virginia, because of the historical importance of real property in people’s estates, the courts favor dividing property so each co-owner ends up with a piece roughly equal in value to the co-owner’s share of the total value of the whole property. This “partition in kind” is not always practical, though, so the courts next consider whether any one or more of the co-owners is willing to buy the interests belonging to the other co-owners for a reasonably fair price. Only if the property cannot be partitioned in kind and none of the co-owners are willing to buy the others out will the courts order that the property be sold and disburse the net sale proceeds to the co-owners in proportion to their separate interests in the property.
But partition suits are expensive and time-consuming. Someone needs to “foot the bill” for the attorney’s fees, costs, and expenses. Usually the court will refer a partition suit to a Commissioner in Chancery, an experienced attorney who helps the court resolve questions of ownership and whether the property can be divided among the co-owners or any of them are willing to pay the others for their interests. The Commissioner in Chancery will charge for his or her time much like any other attorney involved in the partition suit and someone needs to pay the commissioner’s fees. Some of the expenses may be reimbursable from the proceeds of any sale of the property but often only in proportion with the fractional interests of the “freeloading” co-owners.
So, the fact of the matter often becomes that a co-owner (or even a group of co-owners) do not have an interest in the real property that would make it worth paying for a partition suit. One alternative can be to just stop paying the real estate taxes and wait for the property to be sold to pay the taxes in a delinquent tax suit by the local government. A co-owner sometimes can buy the property in a sale through a delinquent tax suit for less than it would cost to buy out the other owners in a partition suit. Of course, by not paying the real estate taxes and waiting for the property to be sold in a tax suit, the owners risk losing the property and there may be risks of damaging the credit of any co-owners the local government actually bills for the taxes. However, not “throwing good money after bad” can sometimes be the best approach.
MartinWren, P.C. attorney Lewis A. Martin, III practices real property law and estate administration law in the firm’s Charlottesville office. For more information regarding property foreclosures and other real estate issues, please call Lewis at 434-817-3100 or email him at firstname.lastname@example.org. With offices in Charlottesville and Harrisonburg, Virginia, MartinWren, P.C. is a dynamic law firm offering legal services to individuals and small and large businesses across the Commonwealth. MartinWren, P.C. represents clients in diverse practice areas: Business, Corporate & Tax Law; Estate Planning & Administration; Personal Injury; Intellectual Property and Technology Law; Healthcare Law; Commercial & Residential Real Estate; Civil and Commercial Litigation; Startups and Emerging Companies; Family Law & Adoption; and Nonprofit Organization Law. To learn more about MartinWren, please visit www.martinwrenlaw.com.