An owelty of partition is a vehicle used to allow one co-owner of property to buy the interest of the other co-owners while using 100% of the interests as collateral for a loan to acquire the property.  Common examples are divorces, probates and division of co-owned assets by people who are not partners.  In 1995, the Texas Constitution was amended to specifically designate an owelty of partition as one of the permitted encumbrances on a Texas homestead.

For an owelty of partition to properly be ordered, the owners must be co-tenants.  If the court vests title in one party and divests the other, they are no longer co-tenants and no owelty of partition can be ordered.  A court-imposed lien does not extend to the interest already owned by the acquiring party.  Only an owelty lien can reach that interest.

If the court has already issued an order vesting and divesting title, that order must be reformed to create an owelty of partition.  Some judges will gladly enter such orders.  Others take the position that once the parties are divorced and the order approving the settlement of the property has been approved, the court loses jurisdiction.  In these cases, the court must enter an order nunc pro tunc to change the previous order.  Some courts will not issue these orders because the effect is to admit that the original order was in error.  However, to insure a lien being imposed on an already owned interest, the court must order an owelty of partition. 

While not a necessity, in all other partitions (other than divorce), we greatly prefer that the parties enter into a partition agreement, in addition to executing an owelty deed.

 You may insure a refinance of an owelty lien under the following circumstances:

1.     If a divorce decree awards homestead that was community property:

(1) The divorce decree or judgment must order payment of a specific dollar amount for the partition and award of the homestead;

(2) The divorce decree or judgment must impose an owelty lien on the entire homestead property; and

(3) You must obtain an acceptable owelty deed.

 "DISPOSITION OF RESIDENCE HOMESTEAD. PETITIONER and RESPONDENT own, as a part of their community estate, the following described real property that has heretofore been their marital homestead: Lot 1, Block ?A,' of MAPLE ACRES, a subdivision in Travis County, Texas, according to the map or plat thereof recorded in Volume 50, Page 101, Plat Records of Travis County, Texas, being locally known as 514 Maple Street, Austin, Texas, and hereinafter referred to as the ?Residence Homestead'."

The Court finds that this property cannot be divided in kind without significantly impairing the value of the resulting portions and that a just and right division can be made without compelling a sale of the property, if this Decree orders a partition of the Residence Homestead with an owelty award, properly secured, to equalize the shares.

The Court further finds that, to the extent of the Residence Homestead, this Decree is a partition of the community property of the parties and that the creation of a secured indebtedness between the parties is necessary to accomplish a just and right division of their estate.

IT IS ORDERED that PETITIONER shall own, possess, and enjoy the Residence Homestead as her sole and separate property and she is hereby awarded all of the community estate's interest in and to such property, both land and improvements, subject to the mortgage-secured indebtedness now encumbering the property, which PETITIONER assumes and agrees to pay, and further subject to the lien or liens awarded to or ordered made in favor of RESPONDENT under the terms of this Decree. Likewise, RESPONDENT is hereby divested of all right, title, and interest in and to the Residence Homestead, except for the lien or liens awarded to or ordered made in favor of RESPONDENT under the terms of this Decree.

IT IS ORDERED that, to accomplish a just and right division between them, RESPONDENT shall recover from PETITIONER the sum of TWENTY-FIVE THOUSAND DOLLARS ($25,000.00), to be paid by PETITIONER to RESPONDENT for the purchase of RESPONDENT's interest in the Residence Homestead. The award of this sum to RESPONDENT is necessary for an adjustment of equities between the parties, in connection with the transfer to PETITIONER of full interest in the Residence Homestead. To enforce payment of this sum by PETITIONER, an equitable judicial lien is hereby created and awarded to RESPONDENT, which lien is in the nature of a vendor's lien and encumbers the full fee simple title to the Residence homestead. This payment between the parties is part of the division of their community property estate and shall not constitute or be construed as any form of spousal support or alimony. Any third party who advances funds to PETITIONER for payment of this sum owed to RESPONDENT shall, with or without formal assignment of lien, be subrogated to the equitable judicial lien of this Decree.

The parties are ORDERED to execute the following documents not later than thirty (30) days from the date on which this Decree is entered: A Warranty Deed in owelty-of-partition form, executed by both RESPONDENT and PETITIONER, conveying the Residence Homestead to PETITIONER; a Real Estate Lien Note from PETITIONER to RESPONDENT, in the principal sum of $25,000.00 less any part of RESPONDENT's award then or previously paid by PETITIONER; and a Deed of Trust from PETITIONER to RESPONDENT as Beneficiary, encumbering the Residence Property and securing payment the Real Estate Lien Note given by PETITIONER to RESPONDENT."

 THE STATE OF TEXAS}
COUNTY OF DALLAS}

WHEREAS, CHERYL RITTER WILLIAMS (hereinafter called "Grantor"), as to an undivided interest and WOODROW WILSON WILLIAMS, (hereinafter called "Grantee"), as to an undivided interest, are the owners of that certain property described below (hereinafter sometimes called the "Residential Property"); and

WHEREAS, pursuant to a Decree of Divorce (or to a Property Settlement Agreement incorporated therein) under Cause No. 95-11111-Y, 330th District Court, Dallas County, Texas, a partition and division of the marital estate has occurred wherein certain property has been awarded and partitioned to Grantor and certain other property, including the Residential Property, has been awarded and partitioned to Grantee; and

WHEREAS, pursuant to such Decree of Divorce, Grantor has been ordered divested of title to the Residential Property because the Residential Property was not susceptible of partition in kind and, in order to acquire the full fee simple title in and to the Residential Property, it was necessary to fix a lien on the entirety of the Residential Property and said court has awarded a lien in Grantor's favor on the Residential Property in order to effect an equitable distribution of the Residential Property; and

WHEREAS, Grantor and Grantee desire to memorialize and confirm the provisions of the Decree of Divorce, and Grantee desires to take the Residential Property in a fee simple, but is unable to pay to Grantor the full value of the sum necessary to effect an award of the Residential Property, and said Grantee has arranged to make a loan for the sum of $47,650.00, a $20,000.00 portion of the proceeds of which are to be paid to Grantor, in order to acquire the Residential Property in fee simple (with the balance of said $47,650.00 loan being in renewal and extension of an existing first deed of trust lien on the hereinafter described property); and which sum of $47,650.00 SOUTHERN ALLIANCE MORTGAGE COMPANY (hereinafter called "Lender") is willing to advance provided it is secured by a Vendor's Lien on the full fee simple title in said property and a Deed of Trust lien is created by the Grantee herein on said property; and

WHEREAS, in order to acquire the full fee simple title in and to said property, it will be necessary to fix a lien on the entirety of the Residential Property in the sum of $20,000.00, representing an owelty of partition and the necessary adjustment between the parties to this deed in order to carry out their purposes of partitioning the Residential Property, and said lien for owelty of partition is and has been created in the manner provided by law and is superior to Grantee's rights of use and occupancy of the Residential Property as Grantee's homestead, or otherwise.

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:

THAT Grantor in consideration of the premises, and other good and valuable consideration to Grantor in hand paid by Grantee, receipt of which is hereby acknowledged, and the further consideration of the execution and delivery by said Grantee of Grantee's one certain Promissory Note of approximate even date herewith for the principal sum of $47,650.00, bearing interest and being payable to the order of Lender, the said Lender, at the request of Grantee herein, having advanced funds to Grantor representing the sum secured to Grantor as owelty of partition in and by the Residential Property; the payment of the above-referenced $47,650.00 Note in favor of Lender being secured by the Vendor's Lien hereinafter retained upon the entirety of the hereinafter described property and the full fee simple title thereto, and being additionally secured by a Deed of Trust of approximate even date herewith to JOHN J. SMITH, Trustee; has PARTITIONED, GRANTED, SOLD AND CONVEYED, and by these presents does PARTITION, GRANT, SELL AND CONVEY unto Grantee whose address is: 505 Cowboy Drive, Mesquite, Texas 75149, the following property, to-wit:

LOT 21 IN BLOCK B OF BELLVIEW ESTATES NO. 4, FIRST SECTION, AN ADDITION TO THE CITY OF MESQUITE, DALLAS COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF RECORDED IN VOLUME 12345, PAGE 6789, MAP RECORDS, DALLAS COUNTY, TEXAS

TO HAVE AND TO HOLD the above described real property and premises, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said Grantee, its heirs and assigns, forever; and the Grantor does hereby bind itself, its heirs, executor and administrators to WARRANT and FOREVER DEFEND the title to said property unto the said Grantee, its heirs and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof.

But it is expressly agreed and stipulated that the Vendor's Lien and Superior Title is retained in favor of said Lender against the entirety of the hereinabove described property and the full fee simple title thereto, premises and improvements, until its above described $47,650.00 Note and all interest thereon is fully paid, according to its face and tenor, effect and reading, when this Deed shall become absolute; and it shall be the same as if a Vendor's Lien was retained in favor of Grantor and assigned to said Lender without recourse or warranty.

Taxes of every nature for the current year have been prorated and are assumed by Grantee. This conveyance is made subject to, all and singular, the restrictions, mineral reservations, royalties, conditions, easements, and covenants, if any, applicable to and enforceable against the above-described property as reflected by the records of the County Clerk of the aforesaid County.

Grantee herein joins in the execution of this deed for the purposes of joining in the recitals set forth above, of completing the division and partition by sale of the Residential Property with Grantor and of accepting the delivery hereof, and Grantee acknowledges to the said Lender, its successors and assigns, the validity of the owelty of partition lien, the Vendor's Lien and the Deed of Trust lien securing the payment of its said Note on the entirety of the hereinabove described property and the full fee simple title thereto, and Grantee does hereby expressly acknowledge that said liens are prior and superior to any right of use, occupancy and homestead which Grantee may have, hold or claim in and to said property.

DATED THIS _____ DAY OF __________________, 19___.

GRANTEE:

_____________________________________
WOODROW WILSON WILLIAMS

GRANTOR:

____________________________________
CHERYL RITTER WILLIAMS

ACKNOWLEDGMENT

STATE OF TEXAS}
COUNTY OF DALLAS}

This instrument was acknowledged before me on ____________________________________, 19___, by Woodrow Wilson Williams.

[NOTARY SEAL]

__________________________________________________
Notary Public, State of Texas

ACKNOWLEDGMENT

STATE OF TEXAS}
COUNTY OF DALLAS}

This instrument was acknowledged before me on ____________________________________, 19___, by Cheryl Ritter Williams.

[NOTARY SEAL]

__________________________________________________
Notary Public, State of Texas

AFTER FILING, PLEASE RETURN TO:

 Date: December 1, 1995

Grantor: JANE MACMILLAN, a single woman

Grantor's Mailing Address (including county):
101 Thurdor, Waxahachie, Ellis County, Texas 75165

Grantee: HAROLD MACMILLAN, a married man, joined by his wife, DOROTHY MACMILLAN

Grantee's Mailing Address (including county):
408 S. Tone, Spring, Harris County, Texas 78700

Consideration: TEN DOLLARS ($10.00) and other good and valuable consideration paid by Grantee to Grantor, receipt and sufficiency of which are hereby acknowledged TOGETHER WITH the execution and delivery by Grantee of his one certain promissory note of every date herewith in the original principal sum of $50,000.00 made payable to RECONSTITUTED SAVINGS, F.S.B. as therein provided and secured by the lien created herein and additionally secured by Deed of Trust executed by Grantee herein and wife, DOROTHY MACMILLAN to Jane Doe, Trustee.

Property (including any improvements):

All of Grantor's undivided interest in and to Lot 12, Block 7, of Crow's Subdivision, a subdivision in Harris County, Texas, according to the map or plat thereof, recorded in Volume 257, Page 100, Map Records of Harris County, Texas, locally known as 408 S. Tone, Spring, Texas; which interest Grantor warrants to be not less than an undivided one-half (1/2) interest.

Reservations from and Exception to Conveyance and Warranty: (See Exhibit "A" attached)

Grantor, for the consideration and subject to the reservations from and exceptions to conveyance and warranty, grants, sells, and conveys to Grantee the property, together with all and singular the rights and appurtenances thereto in any wise belonging, to have and hold it to Grantee, Grantee's heirs, executors, administrators, successors, or assigns forever. Grantor binds Grantor and Grantor's heirs, executors, administrators, and successors to warrant and forever defend all and singular the property to Grantee and Grantee's heirs, executors, administrators, successors, and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof, except as to the reservations from and exceptions to conveyance and warranty.

When the context requires, singular nouns and pronouns include the plural.

Grantor and Grantee are joint owners of the herein-described property by virtue of a Deed dated May 1, 1981, recorded under Clerk's File No. G-20001000 in the Office of the County Clerk of Harris County, Texas. Although the property is not susceptible to partition in kind, Grantor and Grantee desire nevertheless to have a partition of the property and acknowledge that, in order to accomplish such a partition and to permit Grantee to acquire the full fee simple title in and to the property, a lien must be fixed on the entirety of the property to secure the sum of $50,000, representing and OWELTY OF PARTITION and the necessary adjustment between the parties to this Deed for the purpose of partitioning the property. Grantee specifically acknowledges that said lien or owelty of partition is superior to his rights of use and occupancy of the property as his homestead or otherwise, as fully and completely as if said lien or owelty of partition were fixed and decreed by a court of competent jurisdiction in a partition action between the parties to this Deed.

RECONSTITUTED SAVINGS, F.S.B. has advanced and paid the sum of $50,000 for Grantee's benefit, in order that Grantee may pay the full value of Grantor's interest in the property, but upon the condition that the loan of such funds be secured by a Vendor's Lien and Deed of Trust on the full fee simple title in the property. Accordingly, Grantor has retained a valid and subsisting Vendor's lien on the entirety of the herein-described real property and the full fee simple title thereof, and in consideration of the payment to Grantor herein by RECONSTITUTED SAVINGS, F.S.B. of the aforesaid sums, does hereby SELL, TRANSFER, and ASSIGN to RECONSTITUTED SAVINGS, F.S.B. the Vendor's Lien superior title and all rights, remedies, and equities which Grantor may have and hold securing payment of the aforesaid sum. Grantor further agrees that RECONSTITUTED SAVINGS, F.S.B. is hereby subrogated to al of her rights, liens, and remedies upon and against the herein-described real property and all improvements thereon and agrees that title in the Grantee herein shall not become absolute until the above-mentioned $50,000 Note, together with all renewals and extensions thereof and all interest thereon and other charges therein stipulated have been fully paid, at which time this Deed shall become absolute. This Assignment is without recourse on Grantee in any manner for payment of the indebtedness representing the funds advanced for purchase of Grantor's interest in the property.

Grantee joins in the execution of this Deed for the purpose of accepting delivery thereof and acknowledging to RECONSTITUTED SAVINGS, F.S.B., its successors and assigns, the validity of the Vendor's Lien and Deed of Trust securing the payment of the funds advanced for purchase of Grantor's interest in the herein-described property and the priority and superiority of such liens to any right of use, occupancy and homestead that he may have, hold, or claim in and to the property.

GRANTOR:

____________________________________
JANE MACMILLAN

GRANTEE:

____________________________________
HAROLD MACMILLAN

____________________________________
DOROTHY MACMILLAN

THE STATE OF TEXAS §
COUNTY OF ____________§

This instrument was acknowledged before me on the _____ day of _____________, 1990, by JANE MACMILLAN.

____________________________________
Notary Public in and for the State of Texas

My Commission Expires: ______________
____________________________________
(Printed or Stamped Name of Notary)

THE STATE OF TEXAS §
COUNTY OF ____________§

This instrument was acknowledged before me on the _____ day of _____________, 1990, by HAROLD MACMILLAN and DOROTHY MACMILLAN.

____________________________________
Notary Public in and for the State of Texas

My Commission Expires: ______________
____________________________________
(Printed or Stamped Name of Notary)

 

The note includes _________________ DOLLARS ($_________________) that, at Grantor's request, Beneficiary advanced to the United States Internal Revenue Service to discharge and refinance federal tax lien No. _____________, which is recorded in Volume _____, Page _____, of the federal tax lien records of _______________________ County, Texas. Grantor agrees that Beneficiary is subrogated to all rights, titles, and liens held by the tax authority from this federal tax lien until the note secured by this deed of trust is fully paid.

 

"The Affiants reside at, occupy, use, and designate the following described land as their homestead:

Describe Homestead

"The following described land to be encumbered by a Deed of Trust to ____________________, Trustee securing the payment of that note in the originate sum of $____________________ to ____________________________ (the "Lender") is not the homestead of the Affiants and is not used or occupied as the homestead of the Affiants or intended to be used or occupied as the homestead of the Affiants:

Describe Property to be Mortgaged

"The Affiants acknowledge that the Lender may rely on this affidavit, which designates the homestead of the Affiants and states that the land to be encumbered is not the homestead of the Affiants."