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Partition Actions and Future Interests
- by Roger McEowen
January 5, 2009
One of the perils of owning real estate in co-ownership is the right of a co-owner to force a partition and sale. That usually happens when one or more of the co-owners wishes to liquidate their interest or wants outright ownership of a particular portion of the co-owned property. Typically, when a partition action is entered into in an ag setting, family members are involved and the proceeding is acrimonious. There are ways to eliminate the possibility of partition, such as by owning real estate in entity form, but often those steps have not been taken.
A partition involves dividing property that is jointly held by two or more owners so that each owner receives an individual interest in a divided portion of the property. A partition may be voluntary, if all owners agree to the division of property. Otherwise, a partition must be ordered by a judge. Statutory provisions give owners of real property the right to force a partition and sale, and specify who may initiate a partition action. In general, a partition only applies to concurrent interests – interests that are held simultaneously in time. That means that a holder of a present interest can’t bring a partition action against holders of a future interest. That rule was at issue in this case.
Here, a holder of a life estate in a tract of real estate filed a partition action against the defendants – the holders of the remainder interests in the property. The life estate holder wanted the property sold and the proceeds split out. Two of the three remainder interest holders objected. They didn’t want the property partitioned, and maintained that a life estate holder can’t bring a partition action without the consent of the holders of the remainder interests. The plaintiff amended her complaint to include the third of the three remainder holders as a plaintiff, and the trial court allowed the partition. The other two remainder interest holders appealed, and the appellate court reversed.
Under the common law, partition applies only to concurrent interests, meaning interests that are held simultaneously in time. Thus, a present life estate cannot be partitioned from a future remainder interest because the holders of the different interests possess the property successively, rather than concurrently. Most states follow the general rule, either by judicial opinion or by statute (or both). Most of the states with statutes on the issue explicitly limit partition to present estates held by joint tenants, tenants in common, or other concurrent owners. Other state statutes are slightly more expansive and allow partition between life estates and future interests, but only to the extent that some kind of concurrent interest exists. A concurrent interest is a prerequisite for partition because the purpose of partition is to sever unity of possession. There is no unity of possession to sever when the property interests at stake are not concurrent in time. By definition, the holder of a life estate and the holder of a remainder interest do not own concurrent interests because each holder uses the property exclusively during their respective time of possession. While they do share a common interest in the property, it’s not the type of interest which is the function of partition.
So, what does the Iowa statute say? Iowa Code §557.9 says that no “expectant” estate can be destroyed by any act of the owner of a preceding estate. In other words, a current holder of a life estate can’t destroy the interest of a remainder interest holder unless the holder of the remainder interest consents. A 1986 opinion of the Iowa Supreme Court also specifies that a partition action can only be brought when all of the parties are entitled to present possession. That wasn’t’ the case here – only one of the remainder holders consented. Stegall, et al. v. Stegall, et al., No. 8-702/07-0620, 2008 Iowa App. LEXIS 1276 (Iowa Ct. App. Dec. 31, 2008).