PARTITION ACTION OF REAL PROPERTY IN CALIFORNIA
When a co-owner of real property wants to cash out of a property but the other co-owner(s) do not want to sell, one option the soon to be departing co-owner may have is to commence a court proceeding to “partition” the property. Partition in this context refers to a court order that either divides the property into parcels and distributes it in kind among the co-owners, when feasible and/or legal; or issues an order compelling a sale of the property and then distributing the net sales proceeds to the co-owners according to their percentage of ownership in the property.
A partition action typically arises because the co-owners are unable to agree on the management, operation, division or sale of the real estate they jointly own. For example, imagine a scenario where two owners buy a large parcel of land with the intent of building a shopping center. However, after 5 years the project has gone nowhere and now one owner wants to sell but the other owner wants to hold the property. Assuming the co-owner that wants to sell is not able to sell his share, then fortunately, the law allows that co-owner the ability to file a court action for partition which may be the only option he/she has to force an involuntary division or sale of the real property.
“The primary purpose of a partition suit is, as the terminology implies, to partition the property, that is, to sever the unity of possession. Partition is a remedy much favored by the law. The original purpose of partition was to permit cotenants to avoid the inconvenience and dissension arising from sharing joint possession of land. An additional reason to favor partition is the policy of facilitating transmission of title, thereby avoiding unreasonable restraints on the use and enjoyment of property.”’ (LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 493 (citations omitted), see also C.C.P. §§872.210 and 872.230.)
“In lieu of dividing the property among the parties, the court shall order the property be sold and the proceeds divided among the parties in accordance with their interests in the property if the parties agree to such relief or the court determines sale and division of the proceeds would be more equitable than a division of the property.” (LEG Investments at 493). Often times it is not possible to partition the property in kind in equal shares, therefore the more equitable remedy will be to sell the property and divide the proceeds. For example, imagine if co-owners sought to partition a property that contained a single family home on a small lot. It may not be practicable, feasible, or even legal to divide the property physically in two or more equal shares. Therefore, in situations like that the equitable decision for the court is to order a sale of the property and divide up the proceeds accordingly amongst the parties.
In California, a co-owner is entitled to a partition as a matter of absolute right, unless there has been a waiver of the right to partition, for example, by a prior implied or express' agreement between the co-owners. It has long been the rule that “… a cotenant is entitled to partition as a matter of absolute right; that he need not assign any reason for his demand; that it is sufficient if he demands a severance; and that when grounds for a sale are duly established it may be demanded as of right. To grant it is not a mere matter of grace. The only indispensable requirement to its award is that a clear title be shown, and in no event is a partition to be denied because it will result in financial loss to the cotenants.” (De Roulet v. Mitchel (1945) 70 Cal.App.2d 120, 124.)
The partition process is heavily governed by statute, which begins at California Code of Civil Procedure section 872.010, et seq. A party is required to file the court action in the county in which the real property, or some part thereof, is situated. Immediately after the lawsuit is filed the court, on request of a party, the court may issue temporary restraining orders and injunctions, with or without bond, for the purpose of: (a) preventing waste; (b) protecting the property or title thereto; and/or (c) restraining unlawful interference with a partition of the property ordered by the court. (C.C.P. §872.130)
In determining who to divide up the property or proceeds, the court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity. (C.C.P. §872.140) For example, if one co-owner paid all the carrying costs of the property over the years (e.g. property taxes, insurance, maintenance, improvements, etc.), that co-owner would likely be entitled to an adjustment in their favor at the time of division of the asset or proceeds.
The complaint in a partition action shall set forth: (a) a description of the property that is the subject of the action. In the case of real property, the description shall include both its legal description and its street address or common designation, if any; (b) all interests the plaintiff has or claims in the property; (c) all interests of record or actually known to the plaintiff that persons other than the plaintiff have or claim in the property and that the plaintiff reasonably believes will be materially affected by the action, whether the names of such persons are known or unknown to the plaintiff; (d) the estate as to which partition is sought and a prayer for partition of the interests therein; (e) where the plaintiff seeks sale of the property, an allegation of the facts justifying such relief in ordinary and concise language. (C.C.P. §872.230) Immediately upon filing the complaint, the plaintiff shall record a notice of the pendency of the action in the office of the county recorder of each county in which any real property described in the complaint is located. (C.C.P. §872.250)
At the trial, the court shall determine whether the plaintiff has the right to partition. The court has the power to determine the interests of the parties in the property and to ascertain the state of title of the property. (C.C.P. §872.620) Additionally, to the extent necessary to grant the relief sought or other appropriate relief, the court shall determine the status and priority of all liens upon the property. (C.C.P. §872.630) If the court finds that the plaintiff is entitled to partition, it shall make an interlocutory judgment that determines the interests of the parties in the property and orders the partition of the property and, unless it is to be later determined, the manner of partition. (C.C.P. §872.720) The court shall order that the property be divided among the parties in accordance with their interests in the property as determined in the interlocutory judgment. (C.C.P. §872.810) The court will enter a judgment for partition that is binding on the parties in the action and is conclusive as to the matters decided.
Partition actions are complex and have many technical requirements. The foregoing is meant to be a general summary of partition actions and does not address many of the technical requirements of the partition process. A litigant in a partition action may need to retain the services of a surveyor, accountant, real estate broker, appraiser, auctioneer, engineer, attorney and/or other professionals. Therefore, ff you have a partition situation make sure to contact an attorney experience with partition actions, such as the attorneys at The Blake Law Firm. Please do not hesitate to contact The Blake Law Firm to answer your questions regarding partitions of real property.
This update is provided to our clients, business associates and friends for informational purposes only. Legal advice should be based on your specific situation and provided by a qualified attorney.