As a NY estate lawyer with two decades of experience handling NY estates for New Yorkers I encounter many NY estate issues each and every day. From NY will contests to NY kinship estates we handle them all. However a lesser known issue for NY estate lawyers is the partition action.
What is the partition action under the NY estate law? Under the NY estate law when a parcel of real property is specifically devised under a NY will to two or more parties, the individuals named in the NY will all become co-owners of the property. For example if A passes away leaving a parcel of real estate to their three children in their NY will, their house will eventually be titled over to their children as tenants in common. This means each of A’s three children become co-owners in the NY real estate.
Unfortunately in such cases the age old problem inevitably arises of how do you split a piece of real estate three ways? The answer is you cannot. While most people draft their NY wills with the best of intentions regrettably they do not think about the consequences of their bequests in the future. In fact most of the time even their NY estate lawyer fails to either appreciate or point out the problems associated with the specific devising of real property in a NY will at the time of the document’s drafting. Fast forward and we end up with a situation where perhaps one party is living in the property rent free, with two very unhappy siblings looking on while the property tax bills and all the costs associated with home ownership pile up. What you end up with are two very unhappy property owners who neither live in the property or collecting rents and therefore not realizing any benefits of home ownership. It is not long until the two siblings who are not in possession of the property begin looking for a NY estate lawyer for answers.
This scenario is not as uncommon as you would think. Boiling it down the question becomes how do you evict a co-owner of real property who is in possession under the NY estate law? Unfortunately as a NY estate lawyer I will tell you, it is extraordinarily difficult to evict a co-owner of real property under the NY estate law. Most Surrogate’s Courts, where NY estate cases are heard, view such cases as real property issues better left to the Supreme Courts and do not want to entertain these cases. As a result your NY estate lawyer will tell you the resolution to this issue lies in the partition action. The partition action is a legal proceeding the NY estate lawyer can initiate pursuant to NY Real Property Acts Law §901 to partition, meaning to force the sale of the premises at auction. While the partition action tends to be drawn out litigation, in the end nobody wants to see a parcel of property sold at auction on the courthouse steps. First of all it is embarrassing to have a property sold at auction and secondly the owners have no input into whether the selling price is acceptable or not. As such, these cases usually resolve themselves at some point prior to auction.
One such NY partition action is scheduled to go to auction on March 22, 2023. The property being partitioned is New York’s iconic flatiron building located at 175 5thAvenue, in Manhattan. The iconic 22 story landmark is unique for its triangular shape making it unmistakable in appearance as depicted above. Built in 1902, it is considered to be one of New York’s first skyscrapers. The distinctive flat iron building is also symbolic of New York’s famous Art Deco architecture boasting 261,000 square feet of usable commercial leasing interior space.
Currently 75% ownership of the historic landmark is held by GFP Real Estate, ABS Real Estate Partners and Newmark with Nathan Silverstein owning the remaining 25%. Unfortunately fighting broke out during the pandemic when the entire 261,000 square foot space became vacant due to work from home measures. At which point the partners all mutually agreed to invest $80 million to take this vacancy as an opportunity to completely renovate and modernize the entire 120 year old building. It was not long before the partners of the cash strapped building began accusing one another of self-dealing. In 2021 the partners sued Silverstein for a partition to sell the building at auction for mismanagement while Silverstein countersued his partners for inflating the renovation costs.
As of the date of this article the flatiron building is scheduled to be sold at auction on the steps of the courthouse of the New York Supreme Court on March 22, 2023 with the opening bid at $40 million dollars. However the building is expected to fetch well over $250 million dollars. This is the epidemy of why nobody ever wins when real properties are sold at auction in partition.
If you are planning your NY estate or the beneficiary of a NY estate it never hurts to ask the opinion of an experienced NY estate lawyer to see what your options are. Feel free to call the knowledgeable NY estate lawyers at The Law Offices of Jason W. Stern & Associates for a free consultation at (718) 261-2444. Our Queens estate lawyers have 60 years of combined NYC estate law experience drafting NY wills, probating and partitioning NY estates for families like yours in the counties of Queens, New York, Kings, Bronx, Westchester, Richmond, Rockland, Nassau, Orange and Dutchess.