As previously discussed in our blog post regarding the Nuts and Bolts of a Petition to Partition, a partition proceeding is a legal action to dispose of jointly held property “to balance the rights and equities of the parties concerning the property at issue.” Gonzales v. Pierce-Williams, 68 Mass. App. Ct. 785, 787 (2007), quoting Moat v. Ducharme, 28 Mass. App. Ct. 749, 751 (1990). In order to balance the equities of the parties, the court has wide latitude, in equity, to determine how the proceeds from a partition sale the partition should be distributed. See G. L. c. 241, § 25.
The distribution or division of proceeds from a partition sale ensues in two steps. First, “there is a rebuttable presumption that partitioned property should be equally divided.” Canepari v. Pascale, 78 Mass. App. Ct. 840, 844 (2011), citing Moat, supra. For example, if two individuals hold title to a property as tenants in common, it is presumed that each individual holds a one-half, or 50% interest, in the property. Each, therefore, is presumptively entitled to 50% of the proceeds from a sale of the property, i.e. an equal division.
Second, if a co-owner believes that he or she has made disproportionate contributions to the commonly-held property, and wishes to rebut the presumption, then he or she has the burden to prove to the court that his or her beneficial interest in the property is different than how the individuals hold title to the jointly-owned property. See Gonzalez, supra, quoting Asker v. Asker, 8 Mass. App. Ct. 634, 638 (1979). In such an instance, “the judge should begin with the presumption of equal division and then make adjustments to that presumption for particular contributions to the property, and the effect of those contributions on the property’s increase in value, to the extent that the party seeking the adjustment carries his or her burden of proving that the adjustment is warranted.” Canepari, 78 Mass. App. Ct. at 846.
The contributions and adjustments that a court may consider in a partition proceeding include, but are not limited to, carrying costs and capital improvements for the property. Carrying costs include such things as payments made toward the taxes, mortgage and insurance for the property. “No provision in c. 241 deals explicitly with how taxes, mortgage debt service, and insurance shall be accounted for. It has been held, however, that because such costs are incurred to preserve the common estate, it would be a windfall to the noncontributing tenant if, upon partition, the paying tenant and the noncontributing tenant were not obliged to account so that each tenant in common bears his proportional share of the costs.” Stylianopoulos v. Stylianopoulos, 17 Mass. App. Ct. 64, 69-70 (1983). See Giannantonio v. Deraverdisian, 19 LCR 405, 406 (Aug. 2, 2011) (Misc. Case No. 345851) (Long, J.) (same). Thus, if one co-tenant has paid not only his or her own share, but also the share of another co-tenant’s carrying costs, then the paying co-tenant can recover or be reimbursed for the other’s proportionate share of these costs. See Howland v. Stowe, 290 Mass 142, 147 (1935).
Capital investments, on the other hand, are permanent improvements made to the property, which improvements increase the fair market value of the same. Under G.L. c. 241, §23, a co-tenant is entitled to an adjustment for capital expended for permanent improvements to the property, “to the extent those improvements increased the value of the property.” Stylianopoulos, 17 Mass. App. Ct. at 69, citing Asker, 8 Mass. App. Ct. at 639. See Giannantonio, 19 LCR at 406 (same). Therefore, as a needed prerequisite to recovery for capital expenditures, a co-tenant must be able to demonstrate and quantify that the value of the property increased as a result of the permanent improvements, and can claim a right of reimbursement only to the extent that the partition estate appreciated in value because of those improvements. The statute also “speaks of ‘buildings or . . . other permanent improvements on the common land,’ i.e., work of a capital, rather than a maintenance, nature.” Stylianopoulos, supra at 67-68. Thus, typical maintenance and repair costs are not subject to a right of reimbursement under Section 23.
It can be difficult to determine whether a co-tenant is entitled to equitable adjustments for his or her contributions to the partitioned property. There are certain expenses that a co-tenant may incur, which expenses he or she may not be entitled to if a partition proceeding is initiated and litigated to final judgment. The attorneys at Phillips & Angley are well versed in the partition statute, G.L. c. 241, as well as the case law concerning equitable adjustments in the context of a partition. Our attorneys can guide you through the complicated process of determining what each co-tenant is entitled to in a partition proceeding.
Written by Alexandria K. Castaldo, Esq.
Copyright (c) 2018 – 2019 by Jeffrey T. Angley, P.C. All rights reserved.
Disclaimer: The information contained in this post is general in nature and for educational purposes only. No personal legal advice is being provided. If you have an actual legal issue that needs to be addressed, you should seek the advice of competent legal counsel. This post does not create an attorney-client relationship between the reader and Jeffrey T. Angley, P.C., Phillips & Angley or their attorneys.