Milpitas Partition Lawyers

The city of Milpitas was originally known as Rancho Milpitas when it was granted to Jose Maria Alviso in 1835. According to Redfin, In May 2023, Milpitas home prices were down 0.39% compared to last year, selling for a median price of $1.4M. On average, homes in Milpitas sell after 9 days on the market compared to 10 days last year. There were 38 homes sold in May this year, down from 58 last year. Approximately 67% of Milpitas homes are owner-occupied, which suggests that many of the homes are jointly owned. As such, residents of Bakersfield who own property may face disputes with co-owners.

Frequently, there are at least four common types of partitions actions for which a San Jose Partition Attorney can provide sound counsel: 

  • Investor-Investor shared ownership of property;
  • Boyfriend-Girlfriend share ownership of property;
  • Brother-Sister shared ownership of property; and
  • Parent-child shared ownership of property
What Is a Partition Action in California?

A partition lawsuit requires real estate to be sold regardless of the requests of the other title owners. The purpose of a partition action is to permanently end all disputes and remove all obstacles to the free enjoyment of land by one person. (McGillivray v. Evans (1864) 27 Cal.92.) These types of actions can be brought for all types of real estate from houses to farms to office buildings to apartment buildings. Similarly, partition actions are available all types of ownership situations from joint tenants to tenants-in-common to partnership property to property jointly owned by former spouses. 

Historically, the term "partition" comes from the basic word to break into "parts" as in physically dividing real estate in half. For example, if two siblings inherited ten acres of farmland, the property could historically be divided into five acres a piece for each of them. As most people now live in single-family homes, which cannot simply be "split in half," courts will instead order that the property be sold and the proceeds, or equity, be "split in half." The best Milpitas Partition Lawyer will be able to share information on this process with you.

What Are the Steps in a Partition Action?

First, a partition action is filed. A partition action can be filed if one co-owner of real property or a piece of real estate wishes to sell the property or piece of real estate in question but the other co-owners or co-tenants do not wish to sell their ownership rights.  

Second, the court may appoint a court referee to oversee the sale of the property in question. The sales procedure includes that all parties agree to the terms and conditions of the sale in writing. If the parties can not agree, as partition actions are usually very contested issues, then the referee that the court appointed may recommend terms and conditions to the court. Then the court will hold a hearing to decide whether or not to accept those terms and conditions.  

Third, in California, the property’s value will be appraised via a third party or another property appraisal with no ties to any of the parties. While this is not required in all states, it is recommended to make sure that all parties are on the same metaphorical page as to the potential sale proceeds of the property in question.  

Fourth, the referee will conduct the sale in the method most agreeable to all of the party’s goals. This can be via a public auction or a private sale. Regardless of the specific method of partition by sale, the court will determine if the sale was “fair.” If it is decided that the property’s sale proceeds had a lack of proper notice, the sale amount is not within reasonable the value of the property, or if the proceeds were unfair- the court would rule that the property will be up for sale again.  

Lastly, the court will order that the proceeds of the sale, minus any court litigated or approved offsets or costs, will be distributed equitably amongst all of the co-owners or people with interest in the property. A top Milpitas Partition lawyer will be familiar with the process. 

Attorney’s Fees

Code of Civil Procedure, section 874.010 states that “[t]he costs of partition include: (a) [r]easonable attorney’s fees incurred or paid by a party for the common benefit.”  

Interestingly, the costs of partition can also include reasonable expenses necessarily incurred by a party for the common benefit in prosecuting or defending other actions or proceedings for the protection, confirmation, or perfection of title, setting the boundaries, or making a survey of the property. (CCP § 874.020.)  

That attorney’s fees are considered “costs” associated with a partition action is important because Section 874.040 goes on to state the “court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable.” A knowledgeable Milpitas Partition Attorney will be able to give you good advice on these issues. 

What Are Claims for “Contribution”?

An action for partition may include an accounting so that the respective rights of the parties can be adjusted and settled. (Lazzarevich v. Lazzarevich, (1952) 39 Cal. 2d 48, 50–51.) A cotenant who has advanced fund to pay common expenses is entitled to reimbursement from the sale proceeds before the balance is divided and distributed to the cotenants. (Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal. App. 2d 539, 541.) A cotenant out of possession can require the cotenant in possession to account for rents and profits or other compensatory adjustment in the division of sale proceeds. (CCP § 872.430.) An experienced Milpitas Partition Attorney will be intimately familiar with these matters. 

A Partition Case Study: Bethel v. Brazil (2004)

Code of Civil Procedure section 872.710 provides that parties with concurrent interests in property have the right to partition and the court shall order that the property be divided among the parties in accordance with their interests in the property. Under section 872.820, the court shall order that the property sold and the proceeds be divided among the parties in accordance with their interests in the property if the court determines that sale and division of the proceeds would be more equitable than division of the property. To make that determination, the court may appoint a referee and take into account his report. (CCP § 872.820.) Bethel v. Brazil (2004) 2004 WL 1327691 provides an example of how a court will rely on the finding of a referee to determine if a partition by sale is more equitable than a physical division.

Lee and Sandra Brazil (the Brazils) appealed the interlocutory judgment of the trial court ordering equitable partition by sale of a large, undeveloped ranch, as requested by respondent, Barbara Bethel. The Brazils contended that the trial court erred by ordering partition by sale rather than by partition in kind between the parties. The Court of Appeal for the Second District affirmed the judgment.

In 1992, the Brazils owned the 610–acre Lopez Ranch near Arroyo Grande, which was legally described as five unequal, contiguous parcels. Ken Glick held the note and trust deed to the property. The Brazils defaulted on the note and Glick recovered the property through foreclosure.

The Brazils wanted to buy back Lopez Ranch. On January 19, 2001, Glick agreed to give the Brazils an option to purchase the ranch for $1 million on condition that they sign a promissory note for the $100,000 past rent due. Lee Brazil approached Bethel, a developer, and suggesting she consider purchasing a share of it for development. Lee Brazil stated that the asking price was $1.5 million but didn't disclose the existing debt of $100,000. 

On May 29, 2001, Bethel and the Brazils agreed to purchase the ranch from Glick for $1,050,000. The parties purchased the property as an investment, with the goal of developing it as quickly as possible. The Brazils subsequently amended the escrow instructions to reserve the right to pursue a tax-deferred exchange under the United States Code section 1031. On June 8, 2001, Glick agreed to cancel the $100,000 promissory note in exchange for the $50,000 held in escrow, without Bethel's knowledge of this side agreement. 

On August 30, 2001, the day before escrow was scheduled to close, Bethel deposited $248,932 in escrow. However, the Brazils exercised the option to extend the closing date and substituted First Security as an accommodator for a reverse 1031 tax-deferred exchange. 

Escrow closed on October 5, 2001, and three days later, Bethel's counsel warned the Brazils that failure to meet the agreement terms would result in legal action for partition. The Brazils did not respond, and on October 17, 2001, Bethel filed a complaint for partition, asserting that partition by sale would be more equitable due to disagreements over property arrangement, control, and development.

The trial court concluded that the parties had intended to develop the property and that the Brazils frustrated this purpose by failing to discuss a development agreement during escrow. Considering the equities and differing purposes of the parties, the court concluded that the Brazils' were not interested in in quickly developing or partitioning the property because it would frustrate their purpose in effectuating the tax-deferred exchanged that required a holding period of two years. The trial court also noted that the Brazils had “unclean hands” as they concealed their prior debt and used funds received from Bethel to pay it. Based on these findings, the trial court granted an interlocutory judgment of partition to Bethel and appointed Douglas Barth as referee to determine the best method of partitioning the property. 

Douglas Barth recommended that Bethel be allowed to purchase the property using the existing appraisal after detailing various other options. After considering this recommendation and other suggestions, the court decided that partition by sale was most equitable. On appeal, the Brazils contended the trial court abused its discretion by ordering partition by sale rather than partition in kind, a physical division, between the parties. 

The Court of Appeal for the Second District found that the trial court did not abuse its discretion. The referee presented evidence that sale of the whole property would be preferable to dividing the property because considerable work was required with respect to easement issues and lot line adjustments in order to sell the parcels individually for premium values. Distributing five parcels was difficult to make equitable because the property was mostly composed of mountainous terrain and only one parcel had street frontage. Dirt roads that looped around the otherwise landlocked property were mostly narrow and steep and not passable in wet weather. The legal description of the four remaining parcels also lacked language that would grant them easement rights to use the road. As a development, lot line adjustments and road easements were easier to equitably split. However, the evidence at trial established the parties could cooperate to create a development plan. Therefore, the Court of Appeal agreed with the trial court’s conclusion that placing the whole property up for sale was far easier and more equitable than division in kind. 

How the Underwood Law Firm Can Help

In modern transactions, a partition by sale is often a more equitable remedy than a physical division because many zoning restrictions will not permit division or will decrease the value of a property. As illustrated in Bethel v. Brazil, a partition by sale can still be the more equitable option in rural areas with less zoning ordinances when considering other issues a physical division would pose such as easements. If you are considering partition as an option, it’s important to have counsel that investigates the implications of a physical division and can advocate for a partition by sale as the more equitable option. Please contact Underwood Law Firm, P.C., for an initial consultation.

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