Parcelization (parcelatzya) is the process of dividing a single land plot into multiple separate registered plots. In partnership dissolution, this allows co-owners to each receive their own independent plot, ending the partnership through physical separation.
What is Parcelization?
Parcelization converts a single registered land plot into two or more separate plots, each with its own Land Registry entry. After parcelization, each partner becomes the sole owner of their separate plot and the partnership is effectively dissolved.
This is the cleanest form of dissolution when it is feasible, as it provides complete independence without ongoing financial relationships.
Legal Requirements for Parcelization
Parcelization requires approval from the relevant authorities. The plots must each meet minimum size requirements, have adequate road access, and comply with the applicable zoning regulations.
A licensed surveyor prepares a subdivision plan that must be approved by the local planning authority before the Land Registry can register the new plots.
Ensuring Fair Division
When parcelizing a plot between partners, each partner should receive plots of equivalent value. If the plots have different characteristics – different sizes, access, building rights, views or other value-affecting features – equalization payments between partners may be necessary.
An appraiser will assess the value of each proposed plot to ensure the division is fair.
The Role of the Survey and Planning Process
The surveyor and planning authorities play central roles in parcelization. Their approvals and the timeline of the approval process significantly affect how long the dissolution takes. An attorney who understands this process can work proactively with the planning authorities to minimize delays.
Tax Implications of Parcelization
Parcelization in the context of dissolution may have tax implications, including betterment levy if the subdivision increases the value of either plot. These implications should be understood before proceeding.
