Waiver of partition: Overview, definition, and example
What is waiver of partition?
Waiver of partition refers to an agreement in which co-owners of a property or business entity waive their right to request a division or forced sale of the shared asset. This provision is commonly used in partnership agreements, LLC operating agreements, and real estate co-ownership agreements to ensure that the property or business remains intact and is not divided or sold without mutual consent.
For example, if multiple investors jointly own a commercial property, a waiver of partition clause can prevent one investor from forcing a sale that the others do not agree to.
Why is waiver of partition important?
A waiver of partition is important because it helps maintain stability in business or real estate ownership. Without this waiver, any co-owner could demand the division or sale of the shared asset, potentially disrupting operations or investment plans.
This clause is especially useful in LLCs, partnerships, and real estate ventures where multiple owners have long-term interests. It ensures that ownership remains collective and prevents legal disputes over forced sales or property division.
Understanding waiver of partition through an example
Imagine three business partners jointly own a warehouse as part of their LLC. Without a waiver of partition, any one of them could go to court and demand the property be divided or sold, potentially disrupting the business. By including a waiver of partition clause in their operating agreement, they agree that none of them can unilaterally force a sale, ensuring the property remains under joint ownership unless they collectively decide otherwise.
In another example, two siblings inherit a vacation home. If one sibling wants to sell but the other wants to keep the property, a waiver of partition clause in their agreement would prevent the selling sibling from forcing a sale without mutual consent. This helps preserve joint ownership and avoids legal battles.
Example of a waiver of partition clause
Here’s how a waiver of partition clause might appear in a contract:
“Each Member hereby waives any right to seek partition of the Company’s assets, including real or personal property, and agrees that no Member shall have the right to compel the sale or division of any Company property.”
Conclusion
A waiver of partition clause helps protect shared ownership by preventing individual owners from forcing a division or sale of jointly held property or business assets. This ensures stability, protects investment interests, and minimizes legal disputes. Businesses, real estate investors, and co-owners should carefully consider including a waiver of partition to maintain long-term ownership integrity.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.