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<p class="MsoNormal"><span style="color:#1F497D">I sent this out shortly before Christmas and got a few helpful answers, but I'm sending it around again hoping that someone might have some insight into #1. I haven't seen case law confirmation that a partition
sale at auction sells free and clear of mortgages, and I don't know if it's actually true.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Bob Ordal suggested the revamped receivership statutes as an alternative to partition, and that explicitly provides for sale "free and clear of liens." It's a great idea and I'm looking into that, but I do still
wonder if anyone has seen partition used in a similar fashion.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">1320 University St<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Seattle WA 98101-2837<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">fax 206-625-9040<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Eric Nelsen<br>
<b>Sent:</b> Monday, December 22, 2014 1:29 PM<br>
<b>To:</b> WSBA Real Property listserve (wsbarp@lists.wsbarppt.com)<br>
<b>Subject:</b> [WSBARP] Partition of upside-down property - 3 questions<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Co-tenants have a parcel that probably won't sell for enough to pay off the mortgage. Co-tenants disagree on what to do so the client is contemplating (well, I am contemplating on behalf of client) whether partition could help. Three questions:<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">1. It seems to me that once the property sells at auction, proceeds will go to pay the mortgage, which won't be fully satisfied. But the buyer will take free and clear of the mortgage, correct? So lender is left with suit for a personal
judgment as only recourse on the loan. (I know the practical disadvantages for the client; I'm just thinking about the strict legal effects.)<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">2. Say the client pays in some amount, to take care of the excess mortgage balance at the time of sale, and avoids that problem. Would that payment be justification for a compensatory judgment against the other co-tenant under
<a href="http://app.leg.wa.gov/rcw/default.aspx?cite=7.52&full=true#7.52.440">RCW 7.52.440</a> (the owelty-for-unequal-partition statute)?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">3. Client also has paid more on the property expenses in the past, so in an accounting upon the partition, client should receive about $30,000 more than the co-tenant. But there's no equity to divide--so does client get a judgment against
the co-tenant under RCW 7.52.440? Or does the accounting action under a partition only allow for adjusting division of net proceeds?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">1320 University St<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Seattle WA 98101-2837<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">fax 206-625-9040<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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