My brother has a lien on the house we inherited from our mother. He wants me to sell, but I refuse, since he won't agree to pay so I can renovate first. If we don't sell "as is", he will either sue for partition or foreclose on his lien. He says partition is riskier because we lose control over the sale price. He says foreclosure is more difficult, but at least he'll have control of the sale.
There is LOTS of equity left in the house, yet he won't agree to a 2nd mortgage to renovate (and sell for more). Apparently, I can't force him to take a mortgage to renovate. Right?
My question: What happens if he forecloses? Do the other co-owners lose their share of the house's equity? By foreclosing, isn't he stealing our shares of the house? How does this differ from partition?
In order to foreclose, there must be some basis to foreclose the lien. For example, if the lien on the property is a mortgage, there must be some default under the terms and covenants of that document which would trigger acceleration of the amounts due and foreclosure. If a foreclosure is initiated and a foreclosure judgment entered in favor of the plaintiff, all sums due and owing under the lien, plus any ancillary costs such as attorney's fees that the plaintiff may be able to recoup, come due and payable and if not paid in a certain period of time (usually 30 days), the home is sold at a foreclosure auction. The proceeds of the sale are then distributed as follows: (1) to the plaintiff; (2) to any junior lienholders named in the foreclosure action; and then (3) to the owner.
In a partition action, the plaintiff requests that the Court sever the ownership ties between two or more people. In other words, in order for a cause of action in partition to lie, you and your brother will need to both jointly own the property. If this is true, and a partition action is filed, the Court will be asked to either "equitably divide" the property. If this is impossible (because, for instance, it is a house on a piece of land that lacks the ability to be physically divided), an auction is held.
I wold advise that you consult with an experienced foreclosure defense and real property attorney to see what rights, remedies, and defenses are available to you.
Michael P. Fuino, Esq.
Matthew D. Weidner, P.A.
This answer is for informational purposes only and should not be construed, in any way, as the acceptance of representation and the creation of an attorney-client relationship. No attorney-client relationship shall exist unless and until a retainer agreement has been signed by Matthew D. Weidner, P..A. and countersigned by the prospective client.
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Personal Injury Lawyer
It sounds like there may be more facts involved here. Additionally, it sounds like your brother may be trying to muscle you and control the property. You should consult with an attorney to find out what you can and can't do with your interest in the property.
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