One reason partition actions are a good option is that there is generally an absolute right to partition, but every rule has exceptions. In a partition action, the main exception is when the parties have executed a partition agreement. Generally, the right to partition can be waived by an express—or implied—agreement between co-tenants. (CCP § 872.710; Penasquitos, Inc. v. Holladay (1972) 27 Cal.App.3d 356, 358.)
What is required for a partition agreement?
A partition agreement may be an express statement that the right to partition is waived. It may also be evidenced by a right of first refusal where one co-tenant is required to offer the property for sale to another co-tenant as a condition precedent to an action for partition. (Harrison v. Domergue (1969) 2724 Cal.App.2d 19, 21.)
The partition agreement, however, should explicitly mention both partition and waiver to ensure that it is binding. (LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 493 (LEG).)
Who is bound by a partition agreement?
Ordinarily, an express agreement between co-tenants that waives the right of partition is binding not just on the parties, but on their successors in interest. The successor in interest is bound either under the theory that he or she “stands in the shoes” of the contracting co-tenant, or because the successor took his or her interest with knowledge of the agreement of the original co-tenants. (see American Medical International, Inc. v. Feller (1976) 59 Cal.App.3d 1008, 1021.)
Do any other agreements waive the right to partition?
A contractual right of first refusal may be a waiver of the right of partition. (Schwartz v. Shapiro (1964) 229 Cal.App.2d 238, 253.) The construction of a contractual right of first refusal, however, is disfavored because the law supports the alienability of property. A mere contractual agreement creating a right of the first refusal between co-tenants will not create a waiver of the right to partition. (LEG,183 Cal.App.4th at 493.)
Alternatively, when co-owners invested in property subject to a long-term lease to obtain investment income, a court may construe this as a waiver of the right of partition. (Pine v. Tiedt (1965) 232 Cal.App.2d 733, 739.)
Similarly, when parties acquire property for development purposes, then the objective would be frustrated if one party could partition the property before development is complete. In such a case, the parties’ long-term objective may constitute a waiver of the partition right until the development is completed. (Thomas v. Witte (1963) 214 Cal.App.2d 322, 327.)
Interestingly, an agreement that places property in joint tenancy with the understanding that one co-tenant is to retain the property for life and the other is to hold the remainder interest represents a case where the parties have contracted to hold the property free from the right to partition. (Rowland v. Clark (1949) 91 Cal.App.2d 880; Miranda v. Miranda (1947) 81 Cal.App.2d 61.)
As there are many different ways to waive the right of partition, and you are considering it as an option, then you may benefit from good legal advice on the topic.
If you find yourself contemplating a partition action, or faced with defending one, then please contact Marcus | Underwood for a free initial consultation.