In this case, three partners owned three properties as tenants in common in Newark (tenants in common means they each own a percentage of the property). They did not have a written partnership agreement which addressed resolving disputes among the partners.
At some point, a dispute arose regarding the distribution of rent and the payment of expenses at the properties. Subsequently, plaintiffs filed a complaint seeking a partition of the properties under N.J.S.A. 2A: 56-1 to -44 and Rule 4:63-1. They also alleged claims for conversion and partnership oppression and a breach of the parties’ contract, their fiduciary duties, and the covenant of good faith and fair dealing. These plaintiffs then sought equitable relief, damages, an accounting, dissolution of the partnership, and an inspection of all books and records.
The court held a trial on the partition claim fist. Here’s how the court explained a Partition Action.
Partition is an equitable remedy by which property, held by at least two people or entities as tenants in common or joint tenants is to be divided. When property is subject to partition, a physical division of the property is one possible remedy, or most often a court ordered sale. N.J.S.A. 2A:56-2 provides that “[t]he Superior Court may, in an action for the partition of real estate, direct the sale thereof if it appears that a physical partition cannot be made without great prejudice to the owners, or persons interested therein.” The manner in which property is partitioned is “within the discretion of the court.”
Following trial, the court ordered the sale of the property. Thus, plaintiff’s Partition Action was successful.
To discuss your NJ partnership matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Partnership Attorney