A partition action is a court-ordered process where a property owner forces a sale of jointly owned real estate. Essentially, a partition action exists to allow people who own real estate together to take their share of the equity and go their separate ways. But, as simple as this seems, partition actions can often become complex lawsuits. Disputes commonly arise as to what type of partition may be sought and the process for determining ownership interests.
For example, “Julie” bought a house with her boyfriend, “Shawn,” thinking that they would get married one day. Later, after they had bought the house, Julie realized that her boyfriend was not the right person for her. Because Julie wanted to move on in her life, she also wanted to sell the house she bought with her boyfriend. Her boyfriend, however, was mad at Julie for breaking up with him and so refused to agree to sell the house. Because they were not married, Julie could not go to a divorce lawyer, and because they both did not agree to sell, a realtor could not help Julie. Julie felt trapped. Julie then, however, found a partition lawyer and was able to get the house sold so she could move on with her life. A partition lawyer got the job done.
Partition actions are common in four different instances of joint ownership of real estate (1) boyfriend/ girlfriend; (2) brother/sister inherited property; (3) parent/child; and (4) joint investors in real estate. The Underwood Law Firm, P.C. has clients in all of these categories.
Who can Seek a Partition Action?
Under the law, any co-owner or real of personal property may bring an action for partition. (CCP § 872.210.) Additionally, a co-owner’s ability to seek a partition is absolute as a right. Code of Civil Procedure Section 872.710, subdivision (b), states that “partition as to concurrent interests in the property shall be as of right unless barred by a valid waiver.”
Co-owners are entitled to this right even if the entire property is subject to a lien, such as a mortgage. (Gardiner v. Cord (1908) 145 Cal. 157, 164-165.) The same is true even if the property is subject to an easement or a lease. (see Anaheim Union Water Co. v. Ashcroft (1908) 153 Cal. 152.)
For example, a joint tenant or a tenant in common can file a partition lawsuit. An owner of a life estate can seek a partition of property, and one with a right to inherited property can seek a partition in the right cases. In many instances, persons who are part of partnerships can also seek a partition of partnership assets.
Can You Request Different Types of Partition Actions?
Yes. The code recognizes three types of partitions available to co-owners: (1) a partition in kind, (2) a partition by sale, and (3) a partition by appraisal. There are, however, restrictions on which type a co-owner may seek.
A partition in kind is the literal physical division of property in accordance with ownership interest, and it is the favored form of partition in the State. “Partition in kind is favored in law and in the absence of proof to the contrary the presumption in favor of in kind division will prevail.” (Butte Creek Island Ranch v. Crim (1982) 136 Cal.App.3d 360, 365 (Butte Creek).)
As an illustration, as it applies to a farm, this means that the court could determine that one owner of a farm could receive the north section of the farm while the other owner receives the south half of the farm. Obviously, a “partition in kind” is inappropriate for real estate like a house.
As such, most cases are a “partition by sale” of the property, where the real estate is sold on Zillow, Redfin, or the MLS just like any sale of property. As such, the idea is to get the highest value possible for the parties in the sale. In a partition by sale, the court appoints a partition referee or realtor to sell the property, and then the proceeds of the sale are held until a determination is made as to each party’s credits and debits. The process of determining each party’s credits and debits is known as an “accounting.” Every partition action contains an accounting.
Last, a partition by appraisal occurs when the owners decide to get a real estate appraisal of the property, and one of them agrees to sell to the other at the appraised price multiplied by the share of their interest in the property. Restrictions also exist for seeking a partition by appraisal. This is because “the unambiguous language of the partition by appraisal statutory provisions… requires an agreement among the parties.” (Cummings, 13 Cal.App.5th at 598.) Thus, a partition by appraisal is available only when everyone agrees to it.
For example, if a brother and sister jointly own inherited property from their parents, they might agree to a partition by appraisal. In that instance, they agree in advance that one of them would buy the other’s interest at whatever the appraised price is determined to be. Then, they would hire a real estate appraiser who would determine the value of the property. After the appraiser makes his determination and gives the appraisal to the parties, they would arrange to make payments in accordance with the appraisal. In that instance, like everything, the devil is in the details, so it would be important to make sure that all the relevant points are agreed on in advance.
What are the Restrictions on a Co-Owner’s Ability to Seek a Partition Action?
Even though the right to partition is recognized by the courts as “absolute,” there are a few defenses that are well-known to experienced lawyers. Generally, these involve challenges to the plaintiff’s title and one other major exception: a waiver. “It is well settled that in the absence of a waiver, a joint tenant is entitled as a matter of right to have his interest severed from that of his co-tenant.” (Lee v. National Collection Agency, Inc. (N.D. Cal. 1982) 543 F.Supp. 920, 921.) As an illustration, in Schwartz v. Shapiro (1964) 229 Cal.App.2d 238, the Court found that a written agreement relating to right of first refusal modified absolute right to partition.
Thus, in every partition action, it is important that an experienced partition lawyer make a determination as to the status of title, the nature of the parties’ relationship, and have a discussion about whether the parties discussed a waiver, executed a waiver in writing, or otherwise agreed to waive the right to partition. As these issues can be technical and nuanced, a knowledgeable partition lawyer will generally know how to analyze the legal documents and ask the right questions.
What is the Process for Seeking a Partition Action?
Just because a co-owner has a right to partition does not mean achieving that result is an easy task for someone unfamiliar with the law.
Like every lawsuit, a partition requirement must comply with the Code of Civil Procedure, the California Civil Code, the California Evidence Code, the California Rules of Court, and the “local rules” that are specific to the county where the real estate is located.
The first step in a partition action is filing a legally valid complaint, which must meet several technical legal requirements. Then, the parties must obtain an interlocutory judgment in the correct procedural manner. Next, the court must appoint a partition referee who is legally eligible for the position. Then, the court must determine the proper method of partitioning the property. The property must be sold by following all provisions for a partition sale. Finally, the proceeds of the sale must be distributed in strict compliance with the evidentiary code requirements for an accounting.
For example, in every partition action, there are numerous questions that arise as to what the parties intended by their actions, the best method of partition, an analysis of defenses, and the correct distribution of proceeds based on each party’s contributions. As partition law goes back to the founding of the state, there is often substantial case law on many of these questions that should inform the process.
How can the Attorneys at Underwood Law Firm, P.C. Assist You?
Partitions are fairly common in California, particularly among unmarried couples and business partners. The upside is obvious, as selling a co-owned property can prove to be an immediate monetary boon. But getting the ball rolling can be difficult, especially when faced with the prospect of dealing with lawyers and the court system. Additional problems can also arise during litigation. Oral agreements between co-owners can impact title, mortgages can affect distributions, and lengthy accounting procedures can balloon litigation costs.
As each case is unique, property owners would be well-served to seek experienced counsel familiar with the ins and outs of partitions. At Underwood Law Firm, P.C., our knowledgeable attorneys are here to help. If you are concerned about facing a partition action, if you’re interested in seeking one yourself, or if you just have questions, please do not hesitate to contact our office.