It starts with a knock on the door and an offer to buy, but it can end up in court.
A growing number of investors are filing “partition actions” in New York courts to force the sale of properties with multiple owners, an investigation by NY1 has found. The actions, which date back to English common law, are being used to target properties where inheritance has spread ownership across different family members.
Gail Oakes, who lives in a house in Corona, Queens, that her family has owned since 1945, is one of those being targeted by investors, according to NY1. She inherited 8 percent of the property, while family members owned the rest. Two years ago, Oakes was approached by an investor from the Jai Group, a Long Island based company, who said that her relatives had sold their interest in the house to the company for $445,000 and encouraged her to sell.
“Investors will acquire these individual interests from these heirs one by one or as a group,” Scott Kohanowski, director of the Homeowner Stability Project with the City Bar Justice Center told NY1, “and then they will approach the holdout.”
When Oakes refused to sell, the new owner of the property filed a partition action in Queens County Supreme Court.
NY1 found eight partition actions filed in 2018 in Queens and Brooklyn year against homeowners refusing to sell their stakes in properties. In some cases the new owners will flip the properties for a profit, NY1 found.
New York has no law preventing this behavior, but 11 states across the country have passed the Uniform Partition of Heirs Property Act. It asks judges to consider dividing a property over selling it and take into account who lives on the property and whether that person would become homeless following a forced sale. [NY1] – Decca Muldowney