Code of Civil Procedure (CCP) Section 873.260 – Lien on Undivided Interest
Code of Civil Procedure section 873.260 requires liens on a property interest to be allocated to the person who owns that interest. This statute is important because it allows parties who are not subject to a lien to not have to worry about their property being encumbered by one.
Code of Civil Procedure section 873.260 states:
Where a lien is on an undivided interest of a party, the lien shall, upon division of the property, become a charge only on the share allotted to that party.
(Amended by Stats. 1976, c. 73, p. 110, § 6.)What is an example?
“Shawn” and “Julie” are an unmarried couple who want to buy a home together. They find a nice home in Los Angeles and buy it as tenants in common. They then move in together.
While they are living together, Julie decides to take out a loan. For collateral, she puts up her interest in the home.
Unfortunately, Shawn and Julie’s relationship doesn’t work out, and they break up. They cannot agree on what to do with the property. Shawn wants to sell the property and move on with his life, so he sues for partition by sale.
The court orders the property to be sold and the sale proceeds distributed. Under CCP § 873.260, Julie’s lien on her property interest will be allocated only to her share. Since the lien is on her interest alone, Shawn does not have to worry about dealing with that lien after partition.Law Revision Commission Comments (CCP § 873.260)
Section 873.260 continues the substance of the first portion of former Section 769. As under the former section, the lien that is continued will be subordinate to charges on the property for its just proportion of the costs of partition. See Section 874.120.Assembly Committee Comments
As is the case with essentially every partition statute, section 873.260 does not include a an “official” Assembly Committee Comment from the California Legislature. But this is not unusual. That’s because the Legislature endorsed an overall adoption of the Law Revision Commission suggestions when it passed the new partition statutes in 1976.
In fact, the introduction to Assembly Bill 1671 (the bill that contained the new partition laws) states that the Revision Commission’s recommendations “reflect the intent of the Assembly Committee… in approving the various provisions of Assembly Bill 1671.” This demonstrates that the intent of the Legislature was substantially in line with that of the Revision Commission.
The intent of the Legislature aside, the Revision Commission mentions that section 873.260 is derived in part from superseded section 769. In relevant part, that section stated:
“When a lien is on an undivided interest or estate of any of the parties, such lien, if a partition be made, shall thenceforth be a charge only on the share assigned to such party.” Comment on this provision, the Commission stated, “former Section 769 is continued in substance by Sections 873.260 (liens) and 874.120 (lien for costs), providing for continuation of a lien on the share of a party but making the lien subordinate to other liens for costs of partition.”
As to how this statute has played out in the courts, unsurprisingly, there are no recent published cases addressing the function of Section 873.260. Partitions in kind are just not all that common.
But outlining former section 769, the Supreme Court noted that “one who has a mortgage upon an undivided interest acquires, upon partition, a mortgage on the portion allocated in severalty to the mortgagor.” (Noble v. Beach (1942) 21 Cal.2d 91, 95.)
The quote there speaks for itself. If only one cotenant takes out a mortgage or encumbers their individual interest, then that lien attaches only to their interest when the property is eventually divided.