There are times when co-owners of Hawaiian real estate are involved in a dispute and no longer wish to continue co-owning such real estate, or one party stops making payments on the mortgage and the paying party is the non-payer out of title. As a rule, the question arises of what options the co-owners have if they decide to end such a relationship.
In the event that there is no prior written agreement between the co-owners specifying the obligations of each owner and the procedures for resolving disputes, the co-owners are basically left with two options:
(1) draw up an agreement to resolve the dispute, or
(2) terminate the co-ownership relationship through a court-supervised divisional action under Hawaii Revised Statutes Chapter 668.
The co-owners should first try to resolve their differences and come to a compromise. By reaching such a compromise, the co-owners would not need a Hawaii partition action, which can be a very costly process. However, if the quest for such a deal proves a dead end, action to partition Hawaii will be required.
In a Hawaii partition lawsuit, one or more of the owners files a lawsuit against the remaining owners. The filing party also agrees to join as a party any person who has, or claims to have, a legal or equitable right, title, or interest in the property described in the complaint.
Once a Hawaii division suit is filed, the court has jurisdiction to divide the property by (1) division in kind or (2) division by sale. A “partition in kind” occurs when the court physically partitions the property and each owner ultimately controls an individual portion of the property. A “partition by sale” is achieved by publicly auctioning the entire property and dividing the proceeds among the owners according to their respective interests in the property.
The courts tend to prefer a division in kind first, but if such a division is not practicable the court will proceed with a division by sale. As you can see, ending co-ownership of real estate is not that easy and can be costly. Therefore, you should seek guidance from a Hawaii attorney experienced in resolving co-ownership disputes in Hawaiian real estate.