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PROBLEMS WITH CO-OWNERS?

You own real property with others. What do you do if continued co-ownership of the real

property is no longer viable or desirable?

Divorce allows one to disengage from a marital relationship and property issues between spouses

are addressed in Family Court. Hawaii law allows co-owners of real property who are not married to each other to terminate their co-owner relationship. This is done by a partition action.

Can anything be done before you are required to go to court? What happens if you have to sue the

other co-owners?

A. Anticipate Problems.

Think ahead!! Some disputes can be avoided if the parties have a written agreement before acquiring the property as co-owners. The agreement should clearly set forth each owner's duties, responsibilities and benefits. There should be procedures for resolving disputes and a process to follow if an owner wishes to sell.

Such agreement should be in writing and signed by all the co-owners. It should be drafted by someone who is experienced in these matters and who can anticipate potential areas of concerns. The mere preparation of these agreements can sometimes be the source of heated disagreement for the prospective co-owners. It can sometimes even cause the parties to reconsider whether the co-ownership is a good thing. It is better that this occurs before the property is acquired.

B. When a Problem Arises.

When a problem arises, the parties should first attempt to communicate and see if there can be an amicable or acceptable resolution of their differences. The parties are co-owners. While they may have disagreements, the mere fact that they are co-owners suggests some commonality of interests. If the co-owners can reach a mutually acceptable agreement, it will not only resolve the problem, but it can often result in substantial savings in legal fees and the avoidance of the stress of dealing with the unknown.

C. When the Parties Cannot Agree.

If an agreement cannot be reached, a partition action may be necessary. A partition action is a lawsuit by one or more of the owners against the remaining owners. The Complaint includes all lenders and anyone else who may have an interest or a claim in the property.

The court can order the parties to physically divide the property if that is fair

and legally possible. While this may be a possibility for vacant land or large agricultural lots which can be subdivided, it typically is not practical for homes and condominiums.

During the course of a partition lawsuit, the parties can reach an agreement.

D. What Happens in a Partition Action?

If the parties cannot reach an agreement, the Court will ultimately order a sale of the property. A neutral person (commissioner) is appointed by the Court to sell the property, typically, by way of an auction. Prior to the auction, there are publicized notices of open houses and the auction date. On the date of the auction, the property is sold to the highest bidder. The sale must still be confirmed in a confirmation hearing a few weeks later. At the confirmation hearing, the Court will allow people to reopen the bidding. This is to ensure that the highest price for the property is secured.

During the partition action, the parties would have an opportunity to present their claims. The Court will make a decision as to the merits of each party's claim, such as lack of contribution, over contribution or allocation of payment. The net sales proceeds will be divided per the Court's order.

Partition actions can be costly depending upon the extent of the parties' disagreement. The commissioner is compensated for his/her services in showing the property, publicizing the sale, auctioning the property, and appearing in Court. The sale of property by auction does not always generate the highest sales price. It is common for parties in a partition lawsuit to be represented by their attorneys. The legal fees will further reduce each party's share of the net proceeds.

Partition actions sometimes do not proceed through the entire Court process. Factors such as the cost of litigation, the costs of the commissioner's fees and the reduced sales price from a forced sale often encourage the parties to work out a resolution that is in everyone's financial best interests.

A partition action is not the ideal way of resolving co-ownership problems, but it does provide a means of resolving a situation when the parties reach an impasse.

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HAWAII STATE GOVERNMENT SITES

http://www.ehawaiigov.org/main/html - Links to various state agencies

http://www.ehawaiigov.org/DCCA/biz-name/html - Business Registration Search

http://www.ehawaiigov.org/serv/cms - Business and Licensee Complaint Search

http://www.ehawaiigov.org/serv/hils - Insurance Licensee Search

http://www.capitol.hawaii.gov - Hawaii State Legislature

http://www.hawaii.gov/jud - Hawaii Judiciary: opinions, court forms, court rules

http://www.hawaii.gov/dlnr - Department of Land & Natural Resources

http://www.hawaii.gov/dlnr/bc/bc.html - Bureau of Conveyances: Fee schedules, forms, searchable grantor, grantee, doc. no. index

http://www.hawaii.gov/hirec - Hawaii Real Estate Commission

http://www.state.hi.us/tax/tax.html Department of Taxation: forms and information

http://www.state.hi.us/dcca/breg-seu/ DCCA: Business Registration forms and information

http://www.co.honolulu.hi.us - County of Honolulu

http://gis.hicentral.com - County of Honolulu 's Interactive GIS Maps and Data

http://www.co.maui.hi.us - County of Maui

http://www.kauaigov.org - County of Kauai

http://www.hawaii-county.com - County of Hawaii

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FROM THE DESK OF HAROLD CHU ...

They say that time flies as you get older. That causes me to pause because 2003 was like a quick blink and we'll soon be celebrating the beginning of 2004. During this busy holiday season, take some time to cherish your family, friends and appreciate all the many things that we have to be thankful for.

The success which I have enjoyed would not have been possible without your continued support and that of my staff, Cora Anderson and Janette Reyes. We appreciate your business and we thank you for giving us the opportunity to be of service to you. We have enclosed a stick-up calendar as a small token of our appreciation.

We previously discussed partition in broad terms. In this issue, we revisit the subject in greater detail.

We will also be updating our Website. In this newsletter is a list of some of the new links and resources for information that we will be adding in early January, 2004.

Jan, Cora and I wish you all a very safe and joyous holiday season. May the New Year bring fulfillment of your hopes and dreams.

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TIPS FOR LANDLORDS

The following are some of my observations after almost three decades of representing landlords:

When taking rental applications, accept rental applications from everyone, even those who are not your first choice as tenants. Landlords can be susceptible to the charge of discrimination if an application is not taken. Do not do or say anything which suggests discrimination based upon race, color, religion, familial status, gender, age, HIV status or disability.

Contact the tenant's references, especially the prior landlord. Be wary about the prospective tenant if the landlord is guarded in his remarks about the tenant.

Use the Rental Agreement form commonly used in the State of Hawaii . District Court judges are more comfortable with this form. The forms are available for purchase at the Honolulu Board of Realtors at 1136 12 th Ave., Ste. 200 , Honolulu , Hawaii 96816 for $1.00. Their telephone number is 732-3000, ext. 709.

At the very beginning of the rental, document the condition of the property by completing a checklist, making a video taping of the condition of the property or by taking pictures of the condition of the property. The inventory condition form can also be purchased from the Board of Realtors for $1.00. Have the tenant acknowledge the condition of the property at the time the property is rented.

Have the tenant acknowledge receipt of all house rules at the beginning of the lease.

The most common problem with tenants involves the non-payment of rent. Anticipate the potential need to initiate a collection action. Secure information about the tenant's employer, the employer's address and the telephone number of the tenant's employer at the outset.

Be clear in the Rental Agreement as to who are the tenants and the occupants of the premises

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Please note that since Christmas and New Year fall on a Thursday, our offices will be closed on the following dates during this holiday season:

Wednesday, December 24, 2003 (from 12:00 noon )

Thursday, December 25, 2003 (all day)

Friday, December 26, 2003

(all day)

Wednesday, December 31, 2003 (from 12:00 noon )

Thursday, January 1, 2004

(all day)

Friday, January 2, 2004

(all day)

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Frequently Asked Questions About Christmas

Q: Why do we wish people a "Merry Christmas" instead of a "Happy Christmas"?

A: The two are about the same, but with "Merry Christmas" an extra twinkle is

seen in the eyes.

Q: Why is a Christmas tree that has been chopped down called a "live

Christmas tree?"

A: It's dead but doesn't know it, and yet it's having the time of its life.

Q: Why do we wrap our Christmas gifts with paper?

A: Because we like to see surprise and joy (real or kindly faked) in the

recipients.

Q: How many gifts can Santa Claus's bag hold?

A: One less than infinity. Why one less? Because there's a limit to everything.

Q: How could a star that is high in the sky lead the Wise Men to a tiny manger

on the ground?

A: Wisely, toward the end of their journey they asked directions from someone

on the road. Had they not been so wise, they might have missed the manger by

several hundred miles. (That person on the road has never been identified.)

Q: Why do so many people ring bells at Christmas time?

A: For the poor, for the joy, and because a bell can say what words can't say.

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Copyright © 2009 by Harold Chu. All rights reserved.

The information you obtained at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.