Roseville Partition Lawyers
The City of Roseville, the largest city in Placer County, regularly ranks near the top of best places to live and best places to retire. Placer County, California, where Roseville is located, has been ranked Number 1 for Quality of Life in California. As a growing city, Roseville has seen a lot of development in its real estate markets, including in real estate investment of vacant plots of land. Unfortunately, a Roseville Partition Attorney can tell you that investing in land with other owners does not always go smoothly. When a real estate investment turns sour, sometimes one owner wants to sell while another owner wants to hold onto the land out of the belief that it will eventually be worth more over time. When co-owners of real estate cannot agree, then an owner of jointly owned real estate may benefit from meeting with a Roseville Partition Lawyer.
Roseville Partition Lawyers often find that joint ownership problems fall into four broad categories:
- Father/Mother-Son/Daughter 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
- Non-Married Partners shared tenants in common in real estate;
A partition action is a judicially-supervised forced sale of real estate. In California, each co-owner has an “absolute” right to partition the property. “Ordinarily, if the party seeking partition is shown to be a tenant in common, and as such entitled to the possession of the land sought to be partitioned, the right to partition is absolute, and cannot be denied, ‘either because of any supposed difficulty, nor on the suggestion that the interest of the co-tenants will be promoted by refusing the application nor temporarily postponing the action.” (Priddel v. Shankie (1945) 69 Cal.App.2d 319, 325 (emphasis added).) Thus, any owner of real estate (whether 5%, 50%, or 95%) has the right to bring a partition action in California.
Basically, any person who is an owner of real estate can bring a partition action in California. Code of Civil Procedure section 872.710, subdivision (a), states "A partition action may be commenced and maintained by any…owner of…such property." California Civil Code section 872.210 provides a property owner with the "absolute right to partition" absent a valid waiver. Thus, a partition action can be brought by anyone who no longer wants to own jointly owned real estate, other than spousal property.What Are the steps in a Partition Action?
Under the Partition of Real Property Act, the court instead appoints an appraiser to do the heavy lifting. The new statute states that the court “shall determine the fair market value of the property by ordering an appraisal.” (CCP § 874.316.) The court doesn’t have to be the one to order the appraisal, but this is only if all the co-owners agree to a different method of valuation.
If, however, an appraisal occurs, it shall be conducted by a disinterested third-party real estate appraiser licensed to determine the fair market value of properties. After the appraisal is conducted, parties may file objections to the value and can even offer additional evidence of value to the court.
After the valuation is complete, parties will be introduced to the key feature of the new statute: the buy-out option. If a co-owner requests a partition by sale, then the court will notify the other co-owners that they may buy all the interests of the cotenant that requested the partition. (CCP § 874.317.)
This is, essentially, a right of first refusal. The co-owners who don’t want the property sold now have the option to simply buy out the requesting party. Additionally, the buy-out price will be based on the property’s valuation, determined earlier in the litigation. And if one or more parties exercise the buy-out, then the court will reapportion ownership percentages based on the price paid.What Are Claims for “Contribution”?
Before the sales proceeds are distributed among the parties, a court-ordered accounting will determine the charges and credits upon each co-owner’s interest. These credits are taken out of the net proceeds before the balance is divided equally. (Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal.App.2d 539 (“Nelson”).)
“When a cotenant makes advances from his own pocket to preserve the common estate, his investment in the property increases by the entire amount advanced. Upon sale of the estate, he is entitled to his reimbursement before the balance is equally divided.” (Nelson, 230 Cal.App.2d, at p. 541, citing William v. Koyer (1914) 168 Cal.369.)
As such, a party to a partition action must produce and gather their evidence and make sure that it is presented to the court so they can receive full credit for the value that they have added to the property. While a party may have a right to these credits under the law, ultimately, they will not be counted unless they can be presented in the proper form.Can a Partition Action be settled Through Mediation or Negotiation?
Generally, anyone considering filing a lawsuit should consider all of their alternatives, including an informal resolution of the problem. This can take the form of a discussion with the other owner or owners about agreeing to sell the property, negotiating with the co-owner to create a formula to divide the proceeds from the sale, or retaining a lawyer to engage in a mediation with the other owners.
Throughout the partition process, and even on the day of trial, any of the owners can make an agreement about the sale of the property. This can happen through a phone call, through negotiations between the parties' lawyers, or through a mediation session with a retired judge or trained mediator. There are many benefits from a mediation session, including confidentiality provisions contained in the law in Evidence Code sections 1115 through 1129.
Specifically, Evidence Code section 1119, subdivision (a), provides "no evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation is admissible or subject to discovery, and disclosure of the evidence shall not be compelled in any arbitration, administrative adjudication, civil action, or other noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given."A Partition Case Study: Randa v. Randa
Partitions generally can either be in-kind, by sale, or by appraisal. Most courts prefer to partition in-kind, since that way they won’t have to force an unwilling co-owner to sell. If a partition is in-kind, then it is divided equitably, and ownerships shares are distributed among the co-owners. If a partition is by sale, then the property is forcefully sold, and the sales proceeds are distributed among the co-owners. If a partition is by appraisal, then one owner can buy another owner’s interest, though this requires consent from all parties.
Although courts often prefer to partition in-kind, sometimes a court may decide that a partition by sale is necessary due to the situation. This can be due to several considerations, which may include zoning regulations or physical impossibility. If a court decides to partition by sale rather than partition in-kind, an owner would have to sell the property without their consent. To avoid having property forcefully sold, it is necessary to have a property lawyer that understands when a partition by sale will be necessary.
Johnson v. Greenelsh (2008) Cal.App.Unpub WL 44486 is an example of a court finding it overly burdensome to partition in-kind, and so ordering a partition by sale. This is an important lesson in what courts consider when deciding whether to partition in-kind or by sale.
The property in Johnson was a ranch co-owned by Johnson, Johnson’s brother, and Greenelsh. (Id., at 1.) In 2003, Johnson sued Greenelsh because he wanted to partition the ranch by sale. (Id.) Johnson wanted to partition the ranch by sale for the benefit of his mother, who needed the money. (Id.). Greenelsh argued a partition was unnecessary because she could give Johnson a loan. (Id.) The trial court was unpersuaded by Greenelsh’s argument and stated that a partition was going to happen, whether in-kind or by sale. (Id.)
A referee was appointed to determine the partitioning method. (Id.) The referee determined that it would be physically impossible to partition the ranch in a way that could be allocated to the three owners based on their ownership interests. (Id., at 3.) Based on the referee’s findings, the trial court held that the ranch would be partitioned by sale, as requested by Johnson. (Id., at 1.) Unhappy with the forced sale, Greenelsh appealed, but the appellate court upheld the trial court’s judgment. (Id.)
The question facing the Court of Appeals in the Johnson case was if there were any significant obstacles present for a partition in kind. Normally, the party seeking a partition by sale had the burden of proving that a sale would be "more equitable”. (Id., at 2.) However, legislation showed preference for partition by sale in cases where partition in-kind may be impossible or impractical. (Id.) The Court of Appeals, quoting from a previous case, outlined two types of evidence that would justify a partition by sale:
“The first is evidence that the property is so situated that a division into subparcels of equal value cannot be made . . . The second type of evidence which supports a partition sale rather than physical division is economic evidence to the effect that, due to the particular situation of the land, the division of the land would substantially diminish the value of each party's interest.” (Id., at 4)
The referee in the trial court made it clear that physical division into equally valued parts of the ranch for each owner would be impossible without spending an impractical amount of time and money. (Id., at 3.) There were many aspects of the property that prevented a clear and equitable physical division of the property, including several areas with no road access. (Id.) Though the referee advised a partition by appraisal, this was not feasible because not all the parties had given consent. (Id., at 4.) The trial court's order stated:
The alternative approach for a formal subdivision or lot line adjustment so as to allow physical partition of the property is rejected by the Court as unduly expensive and time consuming . . . In the present matter it was stipulated by the parties not to divide the property. Under that stipulation the only result possible is to permit partition by sale. (Id., at 3)
Johnson argued that this petition by sale was not the most equitable solution because she would suffer negative tax consequences from such a sale. (Id., at 3.) However, the trial court was unconvinced by her position and believed that a partition by sale would still be the most equitable solution to the owners. (Id., at 4) The trial court ordered a partition by sale, which the appellate court affirmed. (Id.)
Thus, Johnson signifies that courts will consider the physical implications of dividing the land when deciding between a partition in kind and a partition by sale. If it is impossible or impractical to divide the land equitably among the owners, the courts will force a sale, even without the consent of the owner.
When faced with impending partition, parties may assume that they cannot be forced to sell their land without their consent. However, as Johnson illustrates, that is not always the case. There could be significant obstacles towards physically dividing the land in an equitable manner, especially in areas with many land-use restrictions. Such obstacles could lead a court towards deciding on a partition by sale, regardless of what the parties want.How Underwood Law Firm Can Help
As seen in Randa, partition law is full of intricacies that can catch an unwary party off guard. Courts may take into consideration certain aspects of the property that most people normally wouldn’t regard while planning for a partition. It is important for parties to understand how certain characteristics of their land may prevent them from getting the partition order that they desire.
Here at Underwood Law, 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.
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