Sale for Division of Real Property Lawsuits in Alabama – How to Obtain Your Undivided Interest
A sale for division lawsuit is a legal process used in Alabama when co-owners of real property, such as heirs who have inherited land together, cannot agree on how to divide or manage the property. Under Alabama law, any co-owner of real property has the right to seek a court-ordered sale if the property cannot be equitably divided in kind, meaning physically divided into parcels of equal value.
Sale for Division Process
The procedure begins when one or more co-owners file a “complaint for sale for division” in the appropriate circuit court. The court must first determine whether the property can be divided in kind or whether a sale is necessary. To make this determination, the court will consider factors such as:
- The number of co-owners.
- The nature of the property.
- The practicality of dividing the property into portions of equal value.
If the court finds that a fair division cannot be achieved, it will order the sale of the property and distribute the proceeds among the co-owners according to their ownership shares, subject to other equitable concerns. This process is governed by Alabama Code § 35-6-20, which outlines the conditions under which a sale for division may be initiated and carried out.
The Role of Appraisers
Before ordering a sale, the court may appoint appraisers to assess the property’s value. The Court’s role is to make a judgment as to the value. If the parties agree upon the value, they may stipulate to it subject to the Court’s approval. If the co-owners wish to avoid a sale, one or more of them may have the option to buy out the other owners’ interests at the appraised value. If this is not possible or agreed upon, the court will proceed with the sale.
Public or Private Sale
The court has discretion to order either a public or private sale of the property. Often times, the parties request a conventional sale by listing the property for sale on the multiple listing service. Public sales are typically conducted via auction, allowing potential buyers to bid on the property. Private sales, on the other hand, are negotiated with a specific buyer, though they must still be approved by the court. Ultimately, the method of sale is in the court’s discretion.
Distribution of Proceeds
Once the sale is complete, the proceeds are distributed among the co-owners.
The Alabama Heir Property Act
In addition to the general sale for division statutes, the Alabama Heir Property Act, codified in Alabama Code §§ 35-6A-1 to 35-6A-12, provides additional protections for families who have inherited property, particularly in the context of preventing the forced sale of family land without proper consideration.
This Act applies specifically to heir property, which is real estate passed down and owned collectively by descendants. The Act’s purpose is to give heirs more control over the sale of family property and to promote more equitable outcomes in partition actions.
Key Provisions of the Heir Property Act
- Right to Buyout: Under the Alabama Heir Property Act, before a sale can be ordered, heirs have the opportunity to buy out the interests of those seeking the sale. This provision allows families to retain property by buying the shares of relatives who want to sell.
- Preference for Partition in Kind: The Act requires courts to prioritize dividing the property in kind (physically dividing it among the heirs) rather than ordering a sale. Only if the court determines that dividing the land would cause significant prejudice to one or more heirs will it allow a sale.
- Fair Market Value Assessment: The Act also mandates a fair market value assessment of the property by a licensed appraiser before any sale can occur, ensuring that the heirs receive a fair price for their interests.
- Court-Ordered Sale Conditions: If a sale is ultimately required, the court must give preference to open-market sales, which are handled by a real estate broker to maximize the sale price. Only if no reasonable offers are received will the court resort to a public auction.
Benefits of the Heir Property Act
The Heir Property Act offers significant benefits for families seeking to protect their generational land. By giving heirs the right to buy out co-owners and by encouraging partition in kind, the Act helps prevent forced sales that often result in heirs losing their family property.
Additionally, the requirement for fair market assessments and open-market sales ensures that if a sale is necessary, heirs will receive an equitable price for the land, mitigating the risk of losing property at undervalued prices.
Conclusion
A sale for division lawsuit in Alabama is a legal mechanism that ensures co-owners of real property can resolve disputes when they cannot agree on how to divide or manage the land. For heirs and family property, the Alabama Heir Property Act adds additional protections to ensure that families can retain their generational land or receive fair compensation for their shares. Whether through division in kind, buyouts, or court-ordered sales, Alabama law provides a structured framework for handling these complex situations.
For more information, please refer to Alabama Code § 35-6-20 for general sale for division procedures, and Alabama Code §§ 35-6A-1 to 35-6A-12 for the Alabama Heir Property Act.
We have been litigating over real property in Baldwin County, Alabama since the 1980s. If you have concerns about land in which you have a partial interest, or which you may have an interest in the future, call us to discuss your options.