Partition litigation can be broadly categorized into two phases. In the first, the parties fight over whether there is a right to partition the subject property. If the court agrees that such a right exists, then the litigation shifts into the second phase, where the parties determine the manner and means by which the property is actually partitioned.
Partition referees play an integral role in this second phase. Their responsibilities are wide and ranging, as they can assist in disbursements, marketing the property, dividing the property, and much more.
At the apex of this second phase is the referee’s report. This is a filing the referee makes with the court after the partition is completed, essentially detailing how the referee partitioned the property. Unsurprisingly, this report can become the focus of additional litigation as parties seek to confirm, deny, or modify the report based on any number of legal grounds.
At Underwood Law Firm, our attorneys work with partition referees on a regular basis and have seen hundreds of final reports of sales and division. Our attorneys are more than familiar with the requirements of the reports and the litigation process which surrounds them.
What is a Partition Referee?
Partition referees are neutral third parties appointed by and accountable to the court. Their sole function is to assist in matters related to partitions. (CCP § 873.510.)
The duties of the referee can be ranging and complex. Most often, they will be tasked with determining the priority of all liens on the property. (CCP § 872.630.) But they may also determine the method of partition (physical division or sale), the method of sale (public or private), prepare the property for sale, and sell the property itself.
Their responsibilities can extend even further by order of the court, for referees may perform any acts necessary to exercise the authority given to them by the partition statutes or by the court itself. (CCP § 873.060.)
The myriad of services a referee can provide does not make them mandatory, however. In fact, referees can be quite expensive, even when the cost is split between the parties. And for simpler partitions without liens and complex ownership interests, some litigants may feel a referee is wholly unnecessary.
In these instances, the court may outright refuse to appoint a referee, even if a party requests one. “The only function of a referee is to assist the court in determining those matters which cannot be so determined upon the evidence before it.” (Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 755.)
How do You Get a Partition Referee?
If a party wants a partition referee, they must first get the court to agree to a partition in the first place. Usually, a court will not appoint a referee from the get-go.
Instead, once a party succeeds in establishing a right to partition through a summary judgment motion, interlocutory judgment, or trial, they can request the court appoint a referee to assist with the sale or division of the real estate.
When a party requests a referee, they typically do so alongside a request for terms of sale or division. In the sale context, a litigant may prefer offers for the property to be in cash as opposed to credit. Or they may request a minimum bid be in place to assure the property isn’t sold on the cheap.
Whatever the case, it can be the responsibility of the referee to make these determinations should the parties so choose. By code, the court may refer the manner, terms, and conditions of sale to the referee for a recommendation. (CCP § 873.610.)
In short, referees are available to parties if they want. But they must first win in the initial phase of litigation to secure a judgment of partition.
What is Included in the Partition Referee’s Report?
After a referee is appointed, they will (hopefully) move quickly and efficiently to get the property divided or sold. Once this is done, the referee must issue their report to the court.
The referee’s report will differ drastically depending on whether the partition was by sale or division.
If the means of partition was a physical division, then the referee must issue a report stating: (1) a specification of the manner in which the referee has executed the referee’s trust; (2) a description of the property divided and of the share allotted to each party, along with any recommendations as to owelty; and (3) any recommendation as to opening and closing public and private ways, roads, streets, and easements. (CCP § 873.280.)
If the method of partition is through physical sale, then the referee’s report is much more lengthy.
At the bare minimum, the report must include (1) A description of the property sold to each purchaser. (2) The name of the purchaser. (3) The sale price. (4) The terms and conditions of the sale and the security, if any, taken. (5) Any amounts payable to lienholders. (6) A statement as to contractual or other arrangements or conditions as to agents’ commissions. (7) Any determination and recommendation as to opening and closing public and private ways, roads, streets, and easements. (8) Other material facts relevant to the sale and the confirmation proceeding. (CCP § 873.710.)
What Happens After the Referee Issues the Report?
After the referee issues their report, the responsibility shifts to the parties to confirm, deny, or modify the partition.
With physical divisions, there is no time limit. Any party may simply move (file a motion) the court to confirm, modify, or set aside the report for a myriad of reasons. For example, the referee may have overlooked the best route for an easement on a landlocked parcel.
With partitions by sale, the parties must move quickly. While a motion on the referee’s report can be filed at any time, the hearing on the report is usually only ten days from the filing of the notice of motion. (CCP § 873.720.)
At the hearing, the most common reason parties will give for seeking to deny or modify the report is that the sales price is not an accurate reflection of the property’s value. (CCP § 873.730.) Parties cannot, however, squabble over mere pennies. The court will usually not order a new sale unless it appears that such an action will yield a sum that exceeds the sales price by at least 10 percent on the first $10,000 and 5 percent on any amounts in excess of that amount. (Id.)
How can the Attorneys at Underwood Law Assist You?
Getting a judgment of partition is often only the first step in partition litigation. Perhaps unsurprisingly, getting the property sold or physically divided can take even longer than litigating the right to partition itself. The nature of the lawsuit becomes that of accounting as parties attempt to find common ground on the methods and costs of the partition itself.
As each case is unique, property owners would be well-served to seek experienced counsel familiar with the intricacies of partition actions and the most efficient partition referees in the business. At Underwood Law, our knowledgeable attorneys are here to help. If you are attempting to get a partition referee appointed, are worried about the validity of a referee’s report, or if you just have questions, please do not hesitate to contact our office.