Partition receivers and partition referees serve very similar roles in partition lawsuits. Their roles are to act as a third party with no ties to any of the co-owners interests in property via a partition lawsuit and to help the court and the judge to distribute the property or proceeds from the sale of the property fairly and equitably. Read on to find out the important differences between the two.
What is a receiver?
A receiver on occasion assists the co-owners of the property, and the court in achieving a successful sale or appraisal for the property is partitioned. Receivers are court-appointed in California that oversee actions such as business disputes, divorce cases, judgment collection, and of course, real estate partition cases.
Receivers are not appointed in every single partition lawsuit case; rather, they are appointed on a case-by-case basis by the judge or the court for the purpose of collecting rents, fees, and the property tax for situations in which the co-owner is not sharing the property according to the court’s rules during a partition action.
Receivers are third-party “fiduciary” who assists while there is ongoing litigation. They are considered “third parties,” because they have no interest or stake in the property themselves; they are just appointed by the judge or the court in a partition action process. They are considered “fiduciaries” because their primary responsibility is to ensure that the property is legally protected from undue influence or interference from the parties to the partition action.
Receivers can also hire realtors to show the property on the real estate market, and for open houses, they can find a broker to advise and oversee the sale of the real priority,
Usually, the fees for a receiver may be paid by the sale price of the real estate property in question.
What is a partition?
A partition is a type of lawsuit that seeks to equally distribute the property or sale of the property to all of those co-owners with an interest in the property. Partitions, although they have to do with real estate practices, are controlled by the California Civil Code of Procedure.
You may need a partition action to force a sale of your property if the other tenants or co-owners do not agree to sell the property in question. Other times, partition lawsuits end up in court because the parties can not agree on a fair purchase price or how to divide their shares equally.
There are many issues that can arise when co-owners of property can not all agree on a specific action or sale price, and a partition lawsuit can force the sale of the property, and the court will look to divide the physical property or the sale proceeds equally amongst all of the parties.
What is a partition referee?
A partition referee may be court appointed to carry out a sale of real estate property, according to the CA code of Civil Procedure 873.610. The court or judge will look to the referee to determine whether or not to sell the property by public auction or an alternative method, such as a private sale.
Generally, if both or all parties with an interest in the property in question can agree to appoint a partition referee, they will be appointed. However, in the instance where parties can not agree either on the referee themselves or hiring one, it will be appointed by the court or the judge unilaterally.
Regardless of how the referee is appointed, once they are appointed, they are primarily responsible, and they will report to the court or the judge, whichever is applicable in the county where the property is located, according to the CA Code of Civil Procedure 873.510.
Referees have the court’s authority to hire a real estate agent or broker, employ a lawyer for the sale of the property, sign purchase or sales agreements, and sign deeds.
The referee provides a report of the sale to the court, but only the court approval makes the sale overseen by the refereed final.
What are the similarities between a receiver and a partition referee?
Both receivers and partition referees serve to protect and preserve the real estate property that the partition action is being argued over in court or pending in outstanding or incomplete litigation.
Both receiver and partition referees are prohibited by law from having a personal relationship with the parties to the lawsuit, the court, and the judge.
Both receivers and referees are not parties or subject to any party to the lawsuit, but rather they act with the goal of protecting the property in question from all of the co-owners.
Receivers and referees are allowed to perform any acts necessary to exercise the authority, such as changing the locks if an occupant is uncooperative, making any necessary repairs, or hiring real estate professionals to sell the property, according to CA Civil Procedure Code 873.060
What are the differences between a receiver and a partition referee?
While both receivers and partition referees sound very similar and serve similar interests, there are some important distinctions between the two roles. A referee is in charge of the sale and conducts the entire sale process to ensure equality and proper equity when selling the property.
A receiver, however, is in charge of the overall property and getting it ready for sale. This could include project managing necessary maintenance actions or ensuring that all rents are paid up to date, depending on the individual circumstance.
Why should you hire an attorney for a partition real estate legal issue?
Partition lawsuits and the issues surrounding these court actions are very complex and could take years to sort through the various minute legal issues when offering the sale of real estate property. Hiring experienced attorneys who are knowledgeable in this area of real estate law, such as the ones at Underwood Law Firm, is a great idea to set yourself up for success in a partition lawsuit.