Termination of co-ownership of real estate in Hawaii
There are times when co-owners of Hawaii real property are involved in a dispute and no longer wish to continue being co-owners of such property, or one of the parties no longer makes mortgage payments and the paying party wishes to remove the property. which is not paying part of the title. The question that generally follows is what are the options of the co-owners if they want to break such a relationship.
In the event that there is no prior written agreement between the co-owners that establishes the obligations of each owner and the procedures for the resolution of disputes, the co-owners are basically left with two options:
(1) reach an agreement to resolve the dispute or
(2) terminate the co-owner relationship through a court-supervised partition action pursuant to Chapter 668 of the Hawaii Revised Statutes (Hawaii Real Estate Partition Statute).
The co-owners must first try to resolve their differences and come to a compromise. By making such a compromise, the co-owners would not need a partition action in Hawaii, which can be a very expensive process. However, if the pursuit of such a deal turns out to be a dead end, then partition action is necessary in Hawaii.
In a Hawaii partition action, one or more of the owners files a lawsuit against the remaining owners. The party filing the application must also join as a party any person who has or claims to have any legal or equitable right, title, or interest in the property described in the complaint.
Once a partition action is filed in Hawaii, the court has jurisdiction to divide the real property by (1) partition in kind or (2) partition by sale. A “partition in kind” occurs when the court physically divides the property and each owner ends up controlling an individual piece of the property. A “split by sale” is accomplished by selling the entire property at a public auction and dividing the proceeds among the owners according to their respective interests in the property.
Courts tend to favor a partition in kind first, but if such a division is not feasible, then the court will proceed with a partition by sale. As you can see, ending a real estate co-ownership relationship is not that simple and can be costly. Therefore, you should consult with a Hawaii attorney experienced in resolving Hawaii real estate co-ownership disputes.