Garden Grove Partition Lawyers

Garden Grove is located in Orange County, well known for the Crystal Cathedral, and was named by an attorney and physician, Alonzo Cook, who moved to the area in 1874 and donated much land before leaving in 1881. As a familial city, Garden Grove residents commonly own their homes in unity. This tie can become troublesome when joint owners wish to part ways and disagree on what to do with the shared property, such that seeking advice from a Garden Grove Partition Lawyer is beneficial. Generally, Garden Grove Partition Attorneys usually find partition action to be the best remedy for disputing joint owners in four broad categories:

• Parent-Child shared tenants in common in real estate;
• Brother-Sister shared tenants in common in real estate;
• Investor-Investor shared tenants in common in real estate; and
• Significant others shared tenants in common in real estate;

What is a Partition Action in California?

Partition is a court-ordered process where a property owner forces a sale of jointly owned real estate. Essentially, a partition action exists to allows people who own real estate together to take their share of the equity and go their separate ways. But, as simple as this seems, partition actions can often become complex lawsuits. Disputes commonly arise as to what type of partition may be sought and the process for determining ownership interests.

For example, “Julie” bought a house with her boyfriend, “Shawn,” thinking that they would get married one day. Later, after they had bought the house, Julie realized that her boyfriend was not the right person for her. Because Julie wanted to move on in her life, she also wanted to sell the house she bought with her boyfriend. Her boyfriend, however, was mad at Julie for breaking up with him, and so refused to agree to sell the house. Because they were not married, Julie could not go to a divorce lawyer, and because they both did not agree to sell, a realtor could not help Julie. Julie felt trapped. Julie then, however, found a partition lawyer and was able to get the house sold so she could move on with her life. A partition lawyer got the job done. The best Garden Grove Partition Lawyer will be able to share information on this process with you.

What are the steps in a Partition Action?

Generally, a partition action has four stages, which include (1) the filing of the lawsuit (2) an appraisal of the Property under the Partition of Real Property Act, (3) the determination of the parties’ interests, and appointment of a referee to sell the property, and (4) the division of the proceeds from the sale.

In California partition actions, the court must enter an interlocutory judgment where the court finds that the Plaintiff in a partition action is entitled to a partition. (CCP § 872.720.) The interlocutory judgment “determines the interests of the parties in the property and, unless it is to be later determined, the manner of partition.” (CCP § 872.720.) A top Garden Grove Partition lawyer will be familiar with the process.

Can you recover attorneys’ fees in a partition action?

The Court may award attorneys’ fees in the partition action that are paid by a party to the action for the common benefit of all the co-owners. (CCP § 872.010.) The Supreme Court has spoken on this issue directly, holding that under former section 796, the predecessor to the current partition cost statute, “counsel fees may be allowed … for services rendered for the common benefit even in contested partition suits.” (Capuccio v. Caire (1932) 215 Cal. 518, 528-529 (Capuccio).)

Moreover, cases interpreting those sections continue to permit the allocation of attorney fees in contested partition actions. (Forrest v. Elam (1979) 88 Cal.App.3d 164, 174.) From these authorities it is evident that the “common benefit” in a partition action is the proper distribution of the “‘respective shares and interests in said property by the ultimate judgment of the court.’ ” (Capuccio, 215 Cal. at p. 528.) This sometimes will require that “ ‘controversies’ ” be “ ‘litigated’ ” to correctly determine those shares and interests but this ultimately can be for the common benefit as well. The fact that a party resists the partition does not change this. (See Randell v. Randell (1935) 4 Cal.2d 575, 582 [“The presence and litigation of controversial issues between all the parties does not preclude the allowance of attorney’s fees for services connected with such issues where such services are found to be for the common benefit of the parties.”].) A knowledgeable Garden Grove Partition Attorney will be able to give you good advice on these issues.

What are claims for “contribution”?

Under the law, a property owner can make a claim for contribution for anything that they have expended for the common benefit of all the parties as it relates to their jointly-owned property. Code of Civil Procedure section 874.410 states that “the court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.” For example, the credits can include expenditure in excess of the co-tenants fractional share for necessary repairs and improvements that enhance the value of the property. (Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035-1036.) Similarly, payments for interest, taxes, and insurance made by any co-tenant could be the subject of a reimbursement claim. (Hunter v. Schultz (1966) 240 Cal.App.2d 24.) An experienced Garden Grove Partition Attorney will be intimately familiar with these matters.

A Partition Case Study: Askari v. Sahakian

Buying real property with another person will always involve some obstacles. The most headache-inducing aspect of such a purchase is figuring out the financials, and who pays for what. This can include, but is not limited to, the down payment, the mortgage payments, and maintenance costs.

When it comes to buying property with other people, it is important to maintain a record of agreements and transactions involving the property. That way, if the relationship goes south and a partition lawsuit is filed, you can have sufficient evidence to support your case. Otherwise, the court’s judgment may not be so favorable for you.

Maroot Sahakian purchased the property at issue in Askari v. Sahakian, (2005) Cal.App.Unpub. WL 1663165 which was on sale for $280,000. (Id., at 1.) At the time, Maroot requested his uncle, Shahen Sahakian, to help Maroot pay for the down payment on the house. (Id.) Shahen visited the house and agreed with Maroot on a plan to buy the house, saying it was a good investment. (Id.)

The two Sahakians orally agreed on the terms of their plan. (Id.) Maroot and his sister, Rebecca, would contribute $50,000 for the down payment while Shahen would contribute another $50,000. (Id.) Shahen would buy the house in his name alone and secure financing because Maroot had inadequate credit. (Id.) Maroot and his family members would live in the house, and Maroot would pay the mortgage, property taxes, and insurance. (Id.) Maroot and Shahen would split any other expenses fifty-fifty, and Shahen would have to approve any expense over $500. (Id.) Shahen would also claim expenses on the house as deductions on his income tax return. (Id.) The parties also agreed that after five years Maroot could buy out Shahen’s ownership interest in the house if he could afford to, and if not then they would sell the house. (Id., at 2.)

Maroot and Shahen bought the house in November 1993, and the two performed their duties according to their oral agreement. (Id.) In 1995, Maroot recorded a grant deed which transferred title from only Shahen, to include Maroot and Rebecca. (Id.) The deed showed legal title as: Shahen 50%, Maroot 35%, and Rebecca 14%, as tenants in common. (Id.) This new grant deed reflected the ownership interests based on their contributions to buying the house. (Id.)

In 1998, Maroot requested a year extension to buy out Shahen’s interest in the house, and Shahen agreed. (Id.) In 1999, Maroot wanted to refinance the loan on the house, but his credit was insufficient. (Id.) Maroot asked for another extension and Shahen again agreed. (Id.) This continued until 2001. (Id.)

In 2001, Shahen wanted to refinance the loan to cash out on his interest in the house. (Id.) Shahen received an appraisal valuing the house at $530,000, but Maroot believed the value was lower. (Id.) Later on, Maroot agreed to settle on a value of $500,000 for cashing out Shahen’s interest. (Id.)

Eventually, the relationship between Maroot and Shahen soured, and Shahen’s buyout deal was cancelled. (Id., at 3.) Maroot argued that Shahen’s initial $50,000 contribution to the down payment was just a loan for Maroot to repay. (Id.) Shahen claimed that this was not a loan, but an investment in a partnership or joint venture agreement. (Id.) Shahen wanted to sell the house immediately, but Maroot refused. (Id.) In August 2001, Shahen sued Maroot and Rebecca, seeking a partition among other claims. (Id.)

At trial, there was much conflicting evidence, including testimony that Shahen only paid $40,000 rather than the full $50,000. (Id.) There was also evidence of the parties making very questionable transactions with each other. (Id.) The judge even told the parties that neither side had credibility. (Id.)

In any event, the court issued a tentative ruling indicating the court was inclined to rule that this was a partnership and so the parties each held one-half interest in the property, but Shahen was not entitled to any reimbursement. (Id.) Though both sides protested, the court issued its final ruling ordering a partition by sale in 2002. (Id., at 4.) Maroot appealed the trial court’s ruling. (Id., at 5.) The Court of Appeal upheld the trial court’s judgment. (Id., at 9.)

Askari is a cautionary tale about buying property with other people, especially family members, while not keeping a record. Many people find it difficult to believe that they will squabble over property with their family. As unlikely as it may seem, however, it is certainly not an uncommon occurrence. If a squabble evolves into a lawsuit, then one must be prepared with sufficient evidence to back any claims.

Maroot argued that there was insufficient evidence of the existence of a partnership. (Id., at 5.) The testimony at trial indicated that the parties orally agreed to share the “benefits and burdens” of buying and maintaining the property. (Id.) Shahen’s actions to help purchase the property, including buying the house in his name and personally taking out a loan, was at odds with Maroot’s claim that Shahen was merely a lender. (Id.) Additionally, the parties agreed to transfer title from Shahen alone to include Maroot and Rebecca, which indicated a partnership relationship. (Id.)

Furthermore, the parties agreed to split the cost of repairs fifty-fifty. (Id., at 6.) Maroot prepared annual reports of expenses that Shahen used as tax deductions, and Shahen shared half the benefits of the deductions with Maroot. (Id.) The Court of Appeal determined that this pointed to a relationship was akin to a partnership than a lender/borrower relationship. (Id.)

In addition, when Shahen wanted to cash out, Maroot did not claim at that time that the transaction was a loan. (Id.) Maroot instead tried to negotiate for a lower value of the house so that he would not have to pay as much for Shahen’s cash out. (Id.) The Court of Appeal held that this evidence was in favor of Maroot knowing Shahen was entitled to cashing out his share of the house, which would mean the parties did not consider the Shahen’s $50,000 to be a loan. (Id.) Looking at all the evidence, the Court of Appeal concluded that there was sufficient evidence to conclude that the transaction with the house was a joint venture, and each party owned a one-half interest. (Id.)

Askari is illustrative of how a partitions action can evolve from buying property with others, especially with other family members. What may have initially been seen as a good idea can quickly transform into a headache when relationships worsen. As seen in Askari, a family member can try and claim the transaction was a loan rather than a joint venture to get a favorable result for themselves, even if they have little to no evidence backing up that claim.

How the Underwood Law Firm Can Help

As seen in Askari, a partition lawsuit can often form in unexpected situations. That is why it is always a good idea to keep a written record of any agreements or transactions. Parties must be prepared to have the proper evidence to support their arguments before the court. Otherwise, their credibility at trial will be thrown into question.

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 trying to plan a partition order, or just have any questions, please do not hesitate to reach out to our office.

Learn more here.

Contact Us Today
4590 MacArthur Boulevard, Suite 500
Newport Beach, CA 92660
949.347.5000