When breaking up with partners is difficult, call a partition referee (Part II)

Part II (Part I published in the Spring Issue)

The referee should negotiate and make every effort to obtain the highest possible price on the best terms and should not necessarily accept any particular offer before trying to negotiate a higher price, unless the parties agree. It is also important that any final sale contract should specify that court confirmation is required of any sale, that overbidding may occur in court and that the property is sold in its as­is condition. A referee should avoid making any representations or warranties regarding the condition of the property.

The referee must obtain Court approval of the sale and overbidding is allowed. Overbids must be in writing and exceed the sales price by at least 10% of the first USD 10,000 of the offered price and by 5% of the balance.

The referee should advise all bidders that if a buyer fails to complete the sale, their deposit will be forfeited to the referee as damages. The referee’s agreement to sell the property should also specify that the deposit forfeiture does not limit the damages the referee may recover.

After the sale or escrow has closed, the referee will file a report and request instructions regarding the distribution of funds. In the same report, the referee will request court approval of his fees and costs, exoneration of any bond posted and to be discharged. After the court has approved the referee’s final report, has entered an order and the referee has performed all of the required tasks as directed by the court, the referee’s job is complete.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be, nor should it be taken, as legal advice.

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