Tennessee Business Litigation Lawyers Blog
There are two categories of Tennessee partition cases. A partition in kind occurs when a court divides property owned by joint tenants between or among them. A partition by sale occurs when the court orders the sale of the property so that the proceeds can be divided between or among the joint owners.
In Tennessee, the law has long been that a partition in kind is preferred and that a partition by sale will only be granted under two conditions: (1) Where the property cannot be divided (for example, a property, some parts of which would not have public access if divided, or a property that cannot be divided into smaller tracts because of a restrictive covenant); or (2) where the property would bring more money sold as a whole than the joints owners’ shares would bring if sold individually.
In reality, very many jointly owned properties cannot be partitioned in kind, especially properties in more developed and regulated areas as opposed those in rural areas. Even if all of the property cannot be partitioned in kind, under Tennessee partition law, a court can make a partial partition in kind. In other words, it can exclude some property from a partition by sale and vest it in one or more joint owners.
In Breen v. Sharp (Tenn. Ct. App. 2017), two nephews and their aunt owned, as tenants in common, three non-contiguous tracts of undeveloped rural land. Aunt owned fifty percent (50%) and her nephews owned twenty-five percent (25%) each. The nephews wanted to partition all of the land by sale. Aunt wanted a partition in kind because, on the western side of one of the tracts (“Tract 2”), was the location of land that had sentimental value as it had been the location of a schoolhouse where her family members had taught and attended.
The trial court, which was affirmed by the Court of Appeals of Tennessee, ordered that all of the property be partitioned by sale except the western half of Tract 2 which it ordered that Aunt would keep in exchange for paying nephews for their fifty percent (50%) interest in it. The court determined the value of the nephews’ interest in the western half of Tract 2 by relying on an appraisal which valued Tract 2 at a certain amount per acre.
Two other partial partition in kind cases are instructive as to how a Tennessee court can use its discretion in partition cases. In Crawford v. Crawford (Tenn. Ct. App. 2002), the plaintiff was a tenant in common as to a 28-acre tract. She owned land adjoining the tract. She had built and maintained a barn on .604 acres of the jointly owned tract under the mistaken belief that the barn was on the property she owned by herself. She filed a partition case and requested that the court partition in kind the property by deeding her the .604 acres. The trial court declined to do so, but the Court of Appeals ordered that, in exchange for all of the plaintiff’s interest in the 28 acres, the .604 acres be partitioned in kind and vested in her. In that case, there was expert proof that, by cleaving the .604 acres off for the plaintiff, the other owners would not receive less than they would receive if all of the land was sold and the proceeds divided according to their respective shares.
In Hale v. Hale (Tenn. Ct. App. 2011), one joint owner, the mother, wanted a partition by sale, while the other joint owners, mother’s stepson and his wife, resisted the partition by sale on the basis that the property could not be partitioned by sale because a small part of their house, which was built on property the stepson and wife owned, encroached on the jointly owned property. Because of the encroachment, the stepson and wife argued, the property was not marketable and a partition by sale was not appropriate. Instead of adopting the argument of stepson and his wife, the court ordered that mom transfer to stepson and wife .168 acres of the jointly owned property, which was enough to resolve the encroachment, and that stepson and wife convey .168 acres of the property they owned to the mother.