Severalty, Partition, Trusts and Business Ownership in New York

For the New York salesperson exam, ask two questions first: Who is named on the deed? and What legal relationship exists behind that name?

What is the fastest way to classify the owner?

The name of an investment arrangement does not answer the title question. Read the deed, entity records, trust instrument and other governing documents.

Official source map

The New York State Department of State Real Estate Salesperson 77-Hour Curriculum places severalty, partition, trusts, general and limited partnerships, corporations, syndicates, joint ventures, condominiums and cooperatives in Subject 3, Legal Issues.

Estates, Powers and Trusts Law section 6-2.1 classifies an estate held by one owner as an estate in severalty. Real Property Actions and Proceedings Law section 901 identifies people who may maintain a partition action and permits a sale when physical partition cannot be made without great prejudice to the owners.

Real Property Actions and Proceedings Law section 993 adds special procedures for qualifying heirs property. It includes a settlement conference, valuation and cotenant-buyout process, a preference for partition in kind unless the statutory standard is met, and open-market-sale rules when a sale is ordered.

For trusts, Estates, Powers and Trusts Law section 7-1.17 gives execution rules for a lifetime trust. Section 7-1.18 makes actual funding essential, including deed recording or completed registration for real estate in the stated circumstances. Section 11-1.1 defines covered express trusts and lists default fiduciary powers, subject to the instrument and court orders.

For business ownership, Partnership Law section 12 permits real estate to be acquired and conveyed in the partnership name. Business Corporation Law section 202 and Limited Liability Company Law section 202 authorize those entities to acquire, own, mortgage and dispose of real property.

What does ownership in severalty mean?

Severalty is ownership by one legal owner. The owner is “severed” from co-owners. The word does not mean several people own together.

Examples include:

• one individual holding a house alone
• one corporation holding an office building
• one limited liability company holding an apartment building
• one partnership holding a parcel in the partnership name

Severalty describes the number of legal titleholders, not the number of people economically interested behind the owner. A corporation with 500 shareholders can hold one parcel in severalty because the corporation is the one deeded owner.

Can a corporation or LLC own in severalty?

Yes. A corporation and a limited liability company are legal entities that can acquire title in their own names. If only that entity is the grantee, the entity holds in severalty.

The New York Department of State corporation formation guidance describes a corporation as separate and distinct from the people composing the business. Business Corporation Law section 202 gives a corporation power to acquire, own, improve, lease, sell and mortgage real property. Limited Liability Company Law section 202 gives an LLC comparable property powers.

The investors do not become deeded cotenants merely because they own the entity:

• a shareholder owns shares in the corporation
• an LLC member owns a membership interest
• the entity owns property titled in its name

That separation is one of the most important distinctions in business-ownership questions.

Is a sole proprietorship a separate title owner?

No separate legal entity arises merely from using a sole-proprietorship business name. If Sam owns a building individually and operates “Sam's Market,” the individual owns the real estate unless a separate entity is the deeded owner.

A corporation or LLC is different because it is formed under a governing statute and can hold property in its own name. A trade name does not move title out of the individual owner.

What is partition?

Partition is a legal remedy that ends qualifying co-ownership. A court can divide the property into separately owned parcels or direct a sale and distribute the net proceeds according to the parties' rights.

Two basic outcomes are:

• partition in kind: physical division into separately titled parcels
• partition by sale: sale of the property, followed by allocation of net proceeds

Partition does not create survivorship. It ends the undivided ownership relationship.

Who can bring a New York partition action?

Real Property Actions and Proceedings Law section 901(1) permits a person holding and in possession as a joint tenant or tenant in common, with an estate of inheritance, for life or for years, to maintain a partition action. It also permits a request for sale if partition cannot be made without great prejudice to the owners.

Other subdivisions address future estates, certain heirs and an executor or administrator acting for a decedent's estate with Surrogate's Court approval.

The statute identifies eligible property interests. It does not mean that any person with an economic connection to the owner can partition. A shareholder usually cannot partition a parcel owned by the corporation because the shareholder does not hold title to that parcel.

Is partition the same as subdivision?

No. Partition determines and separates ownership rights. Subdivision is a land-use and mapping process that divides land into legally recognized lots under applicable local and state requirements.

A court may direct physical partition, but the resulting plan can still require surveys, legal descriptions, access, zoning compliance and local approvals. A property cannot be practically divided merely because a cotenant draws a line on a map.

When does a court order a partition sale?

Under the general statute, the starting question is whether physical partition can be made without great prejudice to the owners. Real Property Actions and Proceedings Law section 915 directs a sale when the property cannot be partitioned without that prejudice. Otherwise, the interlocutory judgment directs partition according to the parties' rights, shares and interests.

Example:

Two cotenants own a one-family house on a small urban lot. Splitting the structure and lot into two lawful, useful parcels may be impractical.

A court can consider a sale rather than a physical division. The outcome depends on proof and the statute governing the property.

What happens to mortgages and other liens in partition?

Liens do not disappear merely because a cotenant requests partition. Real Property Actions and Proceedings Law section 913 requires an inquiry into creditors with liens on an undivided share before an interlocutory judgment for sale.

The court determines the parties' rights and accounts for liens and sale expenses before distributing net proceeds. A buyer, broker or salesperson should not estimate what each owner will receive by multiplying the sale price by the deed percentages. Mortgages, taxes, litigation expenses, credits and equitable adjustments can change the distribution.

Can the court adjust the cotenants' financial accounts?

Yes. Partition is an equitable action. Courts can consider matters such as payments for purchase, mortgage principal, taxes, insurance, necessary maintenance, improvements, rents and use, depending on the facts and legal standards. In Berlin v Wojnarowski, the Appellate Division required consideration of equitable credits involving mortgage payments, taxes, major repairs and improvements on the facts presented.

That does not mean every dollar spent produces a dollar-for-dollar credit. The court examines the nature of the payment, benefit, agreement and other equities. Deed percentages are the starting title evidence, while the final accounting can require a separate analysis.

Can tenants by the entirety use ordinary involuntary partition?

Generally no while the tenancy by the entirety remains intact. One spouse or that spouse's individual creditor cannot use ordinary involuntary partition to destroy the other spouse's protected possession and survivorship.

Spouses can agree to divide property, and a divorce, annulment or judicial separation can change the ownership form. Review tenancy in common, joint tenancy and tenancy by the entirety before applying partition to a marital property scenario.

Can a partner, member or shareholder partition entity-owned real estate?

Not merely because of the ownership interest in the entity. The entity owns the parcel. The investor owns shares, a membership interest or partnership rights.

For an LLC, Limited Liability Company Law section 601 states that a membership interest is personal property and that a member has no interest in specific property of the company. A member who wants to exit must use remedies available under the operating agreement and LLC law, not assume the right to partition the LLC's building as a deeded cotenant.

The same core distinction applies to corporate shares. A transfer of stock is not a deed transferring the corporation's real estate.

What is heirs property under New York's special partition law?

Real Property Actions and Proceedings Law section 993 defines heirs property as residential or agricultural real property held in tenancy in common that meets several conditions when the partition action is filed.

The definition requires:

1. no agreement in a record binding all cotenants that governs partition;
2. at least one cotenant who acquired title from a relative, living or deceased;
3. residential or agricultural use; and
4. at least one of the statute's family-ownership, relative-transfer, relative-cotenant or resident-relative conditions.

The final step contains specific 20 percent tests and a separate rule for a cotenant who acquired title from a relative and resides at the property. Do not label property as heirs property merely because relatives are involved.

What protections apply to heirs property?

When section 993 applies, it replaces inconsistent parts of the general partition process. Important features include:

• notice and a mandatory settlement conference
• good-faith negotiation about buyout, continued tenancy in common, division or sale
• court determination of fair market value
• an opportunity for eligible non-selling cotenants to buy interests of cotenants requesting a sale
• a preference for partition in kind unless it would cause great manifest prejudice to the cotenants as a group
• consideration of value, practical division, family ownership, sentimental attachment, current use, contributions and other relevant factors
• an open-market sale through a licensed real estate broker unless the court finds sealed bids or auction more economically advantageous and in the group's best interest
• restrictions on who can initiate an heirs-property partition action
• a statutory right-of-first-refusal process for certain proposed sales of interests to non-cotenants

These rules protect qualifying family-held residential and agricultural property while preserving the rights defined by the statute. The timelines and notice steps are legal requirements, not optional transaction customs.

What changed in the August 2026 heirs-property decision?

In Flouret v Sagland, LLC, decided August 19, 2026, the Appellate Division, Second Department addressed property wholly owned by a trust and an LLC as tenants in common.

The court held that the property could not qualify as heirs property under section 993 because a trust and an LLC are not “individuals” under that statute. Relatives managed the entities, but the entities themselves were the title owners. The court distinguished cases in which at least one ownership interest remained with an individual.

The exam-ready lesson is broader than the case outcome:

Look at the legal titleholders at the time the action is filed. Do not replace an entity owner with the relatives who manage or benefit from it.

The decision was uncorrected and subject to revision when checked on August 27, 2026. Its current official text should be reviewed if the issue arises in a real dispute.

What is a trust?

A trust is a fiduciary arrangement in which a trustee administers property for one or more beneficiaries under a trust instrument and governing law. The person who creates it may be called the trustor, settlor or grantor.

The three basic roles are:

• trustor, settlor or grantor: creates the trust and transfers property to it
• trustee: holds or administers title and owes fiduciary duties
• beneficiary: receives the benefit defined by the trust

One person can occupy more than one role. For example, a creator can serve as trustee of a revocable lifetime trust. Keep the legal functions separate even when the names repeat.

Who owns real estate placed in a trust?

The trustee holds and administers the legal title or title is registered in the form permitted by the governing law, while beneficiaries hold beneficial interests under the trust. The exact deed wording and trust structure matter.

Do not say that every beneficiary is a tenant in common in the trust property. A beneficiary's interest comes from the trust, not from being individually named as a deeded cotenant.

Likewise, the trustee does not receive the property for unrestricted personal use. The trustee acts under fiduciary duties, the trust instrument and applicable law.

Does signing a trust automatically move real estate into it?

No. Formation and funding are separate steps.

Estates, Powers and Trusts Law section 7-1.17 requires a lifetime trust to be in writing and executed with the required acknowledgment or witnesses. Section 7-1.18 says the trust is valid as to assets transferred to it. For real estate capable of registration when the creator is sole trustee, that section identifies recording the deed or completing registration in the name of the trust or trustee as the transfer.

A schedule listing “all real estate” in a trust document does not replace the deed and recording steps specified by law. The deed, transfer taxes, mortgage terms, title insurance and local records require attorney and title review.

What may a trustee do with trust real estate?

Start with the trust instrument. It can grant, restrict or condition the trustee's authority. Court orders and governing law also matter.

Estates, Powers and Trusts Law section 11-1.1 supplies default fiduciary powers in the absence of contrary or limiting provisions. For covered property, those powers can include:

• taking possession and collecting rent
• managing the property
• making ordinary repairs
• obtaining insurance
• selling, leasing or mortgaging under the statutory conditions
• signing deeds and other administration documents

A salesperson should obtain evidence of the acting trustee's authority and let the attorneys determine necessary signatures. The beneficiary's preference alone is not proof that the beneficiary may sign a listing, contract or deed.

What is the difference between a revocable and irrevocable trust?

A revocable trust permits amendment or revocation by the person authorized under the instrument and law. An irrevocable trust does not provide that same general power of revocation, although modification or termination may be possible under specific terms, consent rules or court authority.

The label does not answer who can sell the property. Read the trust instrument, amendments, trustee succession documents and applicable law.

For exam vocabulary, remember the roles and title split. For an actual transaction, obtain legal review rather than inferring authority from the word revocable.

What is a general partnership?

Partnership Law section 10 defines a partnership as an association of two or more persons carrying on as co-owners a business for profit. A partnership can arise from the parties' relationship even when they avoid using the word partnership.

New York partnership questions usually focus on:

• shared business purpose
• contributions of money, property, skill or effort
• management and control
• sharing profits and losses
• authority of partners
• personal liability of general partners

Partnership Law section 26 imposes personal liability on general partners for partnership obligations under its terms, subject to the separate rules for registered limited liability partnerships.

Who owns property acquired by a partnership?

Partnership Law section 12 says that property acquired on account of the partnership is partnership property and that property acquired with partnership funds is presumed partnership property unless a contrary intention appears. It also permits real estate to be acquired in the partnership name and says title so acquired can be conveyed only in that name.

This differs from two investors personally taking title as tenants in common. Ask whose name appears on the deed:

• Partnership named: partnership property
• Individuals named as tenants in common: direct cotenancy, even if they also conduct business together

The economic arrangement and title can overlap, but one does not silently rewrite the other.

What is a limited partnership?

A limited partnership has at least one general partner and one or more limited partners. The general partner manages under the agreement and governing law. Limited partners contribute capital and receive the rights stated in the agreement and statute.

Partnership Law section 121-303 provides that a limited partner is generally not liable for the limited partnership's obligations solely in that capacity, but it also contains exceptions involving service as a general partner, conduct causing certain reasonable beliefs, use of a limited partner's name and other facts.

Do not reduce the distinction to “limited partners have no liability.” Personal guaranties, wrongful conduct and statutory exceptions can create exposure. The exam contrast is general management and liability versus the limited partner's more protected investment role.

What is a limited liability company?

A limited liability company is a separate legal entity formed under the Limited Liability Company Law. It can own real estate in its own name and can be managed by members or managers as the articles and operating agreement provide.

Important distinctions:

• the LLC is the deeded owner when named as grantee
• a member's interest is personal property
• a member has no interest in a specific LLC parcel under section 601
• the operating agreement governs many economic and management rights
• section 609 generally protects members, managers and agents from entity obligations solely because of that status, subject to statutory exceptions and voluntary guaranties

An owner can sign a personal guaranty for an LLC mortgage. Limited liability does not cancel that obligation or personal responsibility for one's own wrongful conduct.

What is a corporation?

A corporation is a legal entity separate from its shareholders. It can hold real estate, enter contracts, borrow, mortgage property and continue despite changes in share ownership.

Keep the documents straight:

• deed to the corporation transfers the real estate to the corporation
• stock certificate or book-entry record represents a shareholder's ownership interest in the corporation
• corporate bylaws and resolutions address governance and authority
• officers act for the corporation within actual authority

Selling all shares in a real-estate corporation changes control of the entity, but it does not by itself record a deed from the corporation to the buyer. The corporation remains the parcel owner.

Does limited liability mean no one can be personally liable?

No. Limited liability is a baseline rule, not immunity from every obligation.

Personal exposure can arise from facts such as:

• a signed personal guaranty
• a person's own fraud, negligence or other wrongful conduct
• statutory wage or tax rules
• improper distributions or governance violations
• facts supporting disregard of the entity form

The exam may contrast general-partner liability with corporate shareholder or LLC member protection. Use that contrast without turning it into an absolute statement.

What is a joint venture?

A joint venture is an association formed for a specific business enterprise for profit. It resembles a partnership but is commonly limited to a particular project rather than an ongoing general business.

New York courts look for an agreement and intent to associate, contributions, joint control, and sharing of profits and losses. Dundes v Fuersich summarizes those elements and describes a joint venture as a special combination for a specific venture.

Calling a project a joint venture does not establish every legal element. It also does not tell you whose name is on the deed. The venturers might own as cotenants or operate through an LLC, partnership or corporation.

What is a real estate syndicate?

A real estate syndicate is a group that pools capital, expertise or both for an investment. Syndicate is an investment description, not a special form of deed ownership.

The group still needs a legal structure, such as:

• limited partnership
• limited liability company
• corporation
• joint venture or contractual arrangement
• direct tenancy in common

Exam trap:

If the question asks who owns the property, “the syndicate” is incomplete unless the facts identify the legal vehicle or deeded owners.

How do condominium and cooperative ownership fit?

They illustrate why the document received matters.

• A condominium purchaser generally receives a deed to a real-property unit plus an inseparable interest in the common elements.
• A cooperative purchaser receives shares or membership in the cooperative corporation and a proprietary lease for occupancy. The corporation owns the real estate.

The buildings may look alike, but the ownership papers differ. Use the Condominiums and Cooperatives study guide for the full New York comparison rather than treating either form as an ordinary partnership.

How do the business forms compare?

This table is for classification. Entity selection also affects tax, securities, financing, succession and governance issues that require professional advice.

How can these concepts appear in exam scenarios?

Scenario 1: One corporate grantee

A deed names Hudson Property Corporation as the sole grantee.

The corporation owns the parcel in severalty. Its shareholders do not become tenants in common in the land.

Scenario 2: One LLC with three members

Three investors form an LLC, and the deed names the LLC as grantee.

The LLC owns the real estate. The three investors hold membership interests.

Scenario 3: Two direct owners disagree

Two tenants in common cannot agree on use or sale of a parcel.

Partition is the court remedy that can end their co-ownership through division or sale, subject to the governing statute and defenses.

Scenario 4: Family agricultural parcel

Relatives hold agricultural land as tenants in common after family transfers, and no agreement in a record binds all of them on partition.

Check every element of Real Property Actions and Proceedings Law section 993 before applying the heirs-property procedures.

Scenario 5: Trust document but no deed

An owner signs a lifetime trust that lists a house but does not complete the required transfer or deed recording.

Avoid assuming the real estate was funded into the trust. Formation and asset transfer are separate.

Scenario 6: Beneficiary signs a listing

A beneficiary asks a broker to list trust-owned real estate but provides no trustee authorization.

Beneficiary status does not establish authority to sell. The broker needs the attorney-confirmed authority and proper signer.

Scenario 7: Partnership-name deed

A deed names Elm Street Partners as grantee, and the partnership paid the purchase price.

Treat the parcel as partnership property, not as separate rooms owned personally by the partners.

Scenario 8: Syndicate investment

A promoter says that ten people will buy through a syndicate.

Ask which entity or individuals will hold title. Syndicate alone does not answer.

What should a salesperson verify in an entity or trust transaction?

The salesperson should identify the issue, collect appropriate records and involve the attorneys and title professionals.

Useful checks include:

• exact current deeded owner
• complete entity or trust name
• state of formation and current status of an entity
• certificate, operating agreement, partnership agreement, bylaws or trust instrument relevant to authority
• resolutions or consents required for the transaction
• identity and authority of trustee, manager, member, general partner or corporate officer
• later amendments, resignations, successor appointments or dissolutions
• personal guaranties and liens affecting the transaction
• whether an investor owns the parcel directly or owns an interest in its titleholding entity
• whether a partition case may involve heirs property under section 993

Do not accept “I own the company” as complete proof that one person can sign a listing, contract, mortgage or deed. Authority comes from the governing law and documents.

Use the Legal Issues study guide to connect ownership structures with deeds, liens and title. Review the bundle of rights if the question asks which rights the owner or entity can transfer.

What should I memorize?

Use this sequence:

• Severalty: one legal titleholder
• Partition in kind: physical division into separate ownership
• Partition by sale: sale followed by distribution of net proceeds
• Heirs property: qualifying family-connected residential or agricultural tenancy in common with special procedures
• Trustor or settlor: creates the trust
• Trustee: holds or administers title under fiduciary duties
• Beneficiary: receives trust benefits
• General partnership: co-owned business for profit with potential general-partner liability
• Limited partnership: general partner plus limited partners
• LLC: entity owns the parcel; members own personal-property membership interests
• Corporation: entity owns the parcel; shareholders own shares
• Joint venture: specific shared enterprise for profit
• Syndicate: pooled investment label, not a deed form

Then ask who holds title, who controls the decision, what the investor owns and what remedy applies.

Frequently asked questions

Does severalty mean several owners?

No. It means one legal owner holds the estate without a co-owner.

Can a corporation own real estate in severalty?

Yes. A corporation can be the sole deeded owner even when it has many shareholders.

What are the two basic partition outcomes?

Partition in kind physically divides the property. Partition by sale sells it and allocates the net proceeds.

Can any investor partition an entity's real estate?

No. A member or shareholder does not become a deeded cotenant merely by owning an interest in the entity.

What is New York heirs property?

It is residential or agricultural tenancy-in-common property that meets every family-transfer and ownership condition in Real Property Actions and Proceedings Law section 993.

Does heirs-property law require a settlement conference?

Yes. Section 993 includes a mandatory settlement-conference process when the property qualifies.

What did the August 2026 Flouret decision hold?

Property wholly owned by a trust and an LLC did not qualify as heirs property because those entity owners were not individuals under section 993.

Who are the three basic trust parties?

The trustor or settlor creates the trust, the trustee administers property, and the beneficiary receives the benefit.

Does signing a trust move a house into it?

Not by itself. The asset must be transferred using the required deed, recording and registration steps.

Does a trust beneficiary hold deeded title?

Not merely because of beneficiary status. The beneficiary holds rights under the trust while the trustee administers legal title under the governing arrangement.

Who owns a building deeded to an LLC?

The LLC owns it. Members own membership interests and have no specific interest in the LLC parcel merely from membership.

Are general partners personally liable?

They can be personally liable for partnership obligations under New York law, subject to the rules for registered limited liability partnerships and the particular facts.

Is a joint venture the same as a syndicate?

No. A joint venture is a legal relationship for a specific enterprise. A syndicate broadly describes pooled investment and still needs a legal ownership structure.

Do cooperative shareholders own their apartments as real estate?

No. The cooperative corporation owns the real estate. The resident owns shares or membership plus a proprietary lease.

Sources and verification notes

This article was checked against official sources available on August 27, 2026. The August 19, 2026 Flouret opinion was uncorrected and subject to revision on that date. Entity, trust and partition outcomes depend on governing documents and facts, so the article supports exam study and issue recognition rather than transaction-specific legal advice.

1. New York State Department of State, Real Estate Salesperson 77-Hour Curriculum. Subject 3 ownership, partition, trusts and business-organization scope.
2. New York Estates, Powers and Trusts Law section 6-2.1. Estates classified by number of owners.
3. New York Real Property Actions and Proceedings Law article 9. General partition procedure.
4. New York Real Property Actions and Proceedings Law section 901. Eligible partition claimants and great-prejudice standard.
5. New York Real Property Actions and Proceedings Law section 993. Uniform Partition of Heirs Property Act requirements and procedures.
6. Flouret v Sagland, LLC, 2026 NY Slip Op 05009. Trust and LLC owners are not individuals under section 993 when they wholly own the property in the stated facts.
7. Berlin v Wojnarowski, 32 AD3d 810 (2006). Equitable accounting for mortgage, tax, repair and improvement expenditures in partition.
8. New York Estates, Powers and Trusts Law sections 7-1.17 and 7-1.18. Lifetime-trust execution and funding.
9. New York Estates, Powers and Trusts Law section 11-1.1. Express-trust definition and fiduciary powers.
10. New York Partnership Law sections 10, 12, 26 and 51. Partnership definition, property, general-partner liability and rights in specific property.
11. New York Partnership Law section 121-303. Limited-partner liability to third parties.
12. New York Business Corporation Law section 202. Corporate power to acquire, own and dispose of real property.
13. New York Limited Liability Company Law sections 202, 601 and 609. LLC property powers, membership interests and liability rules.
14. New York Department of State, Forming a Business Corporation. Corporation as a distinct legal entity and formation guidance.
15. Dundes v Fuersich, 6 Misc 3d 882 (2004). Joint-venture definition and elements.

Continue with the next article on general liens, specific liens and notices of pendency to classify claims against property and notice of title litigation.