Code of Civil Procedure (CCP) Section 874.120 – Lien for Costs
Code of Civil Procedure section 874.120 provides for how the costs of the partition are to be levied on the parties. Under the statute, the costs become liens against each party’s shares of the proceeds.
Code of Civil Procedure section 874.120 states:
- The costs shall be a lien on the share of the party specified.
- A lien imposed by this section has priority over any other lien on the share except those imposed under this section.
“Shawn” and “Julie” are siblings who inherit property from their parents. Even though they own equal shares, Shawn treats the home as his own, and refuses to allow Julie onto the property. Fed up with being denied the benefits of the home, Julie sues for partition.
As part of this process, Julie procures a title report before the Complaint is filed. Later, when the Court allows the partition by sale to proceed, a partition referee is hired to prepare the home for listing on the open market. The referee also contracts with a contractor to fix up the roof so that the home will get a better sales price.
Eventually, the home is sold. Pursuant to section 874.010, half of Julie’s attorneys fees must be paid out of Shawn’s shares of the proceeds. Julie is also entitled to be reimbursed for half the cost of the title report. Additionally, the fees for the referee and the contractor come out of both parties’ shares of the sales proceeds.
All of the above are considered “costs” of partition under section 874.010. And costs are to be evenly split by the parties to a partition action under section 874.040, unless the court comes to some other equitable arrangement. As such, Julie must be reimbursed from the sales proceeds.
The way that Julie is reimbursed is via the court imposition of a lien for the repayment amount against Shawn’s share of the sales proceeds. Shawn, too, will be entitled to a lien against Julie if he has costs to be reimbursed under section 874.040.
Law Revision Commission Comments (CCP § 874.120)
Subdivision (a) of Section 874.120 continues a portion of former Sections 796 and 798. Subdivision (b) is derived from former Section 769.Assembly Committee Comment
As is the case for many of the partition statutes, section 874.120 does not include an “official” Assembly Committee Comment from the California Legislature. But this is the norm. And 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 essentially in line with that of the Revision Commission.
Turning to the comment, it references that section 874.120 is derived in part from several repealed statutes under the former partition codes. The most similar of these is former section 796, which read in relevant part:
“The costs of partition… must be paid by the parties… in proportion to their respective interests therein…. In that case they shall be a lien on the several shares, and the judgment may be enforced by execution against such shares, and against other property held by the respective parties.”
As one can see, today’s version of the statute has been slimmed down considerably, but the substance remains the same. Once the court determines that a set amount of costs are to be paid by one party to another, that payment becomes a lien on the share of the paying party. That lien can also accrue interest from the date of entry of judgment, pursuant to Code of Civil Procedure section 685.010.
As to subdivision (b), it might surprise some litigants that the lien for costs may supersede even those liens that were already encumbering the property. The text is explicit in stating that the lien imposed has priority “over any other lien.” (CCP § 874.120.)
Recall, too, that under section 873.820, the sales proceeds are used to pay “the other costs of partition” before they are used to pay “any liens on the property in their order of priority.” Thus, before the sales proceeds are used to pay off a mortgage encumbering the property, they are first used to satisfy the lien for costs.Contact Us
Here at Underwood Law Firm, our knowledgeable attorneys are here to help navigate the complex web of case law and statutes surrounding partitions. If you are thinking of filing a partition, are already in the midst of a partition suit, or just have any questions, please do not hesitate to reach out to our office.