San Mateo Partition Lawyers

San Mateo is a located on the San Francisco Peninsula. It is well known for its rich history at the center of the San Francisco Bay Area. San Mateo is home to the College of San Mateo, founded in 1922, the Bay Meadows Racetrack, the Coyote Point Museum, and Central Park, which contains a traditional Japanese tea garden. When property owners cannot agree on whether to sell real estate, then a partition action led by a San Mateo Partition Lawyer may be a good solution. There are usually four scenarios when a joint party should consider a partition action:

  • Boyfriend-Girlfriend co-ownership of property;
  • Sibling-Sibling co-ownership of property;
  • Parent-Child co-ownership of property; and
  • Investor-Investor co-ownership of property.
What Is a Partition Action in California?

A partition action is an action brought by a co-owner of a piece of real property against another co-owner, seeking to divide the property according to the respective interests of the co-owners. In order to establish a right to a partition, a party must show that they have some ownership interest in the subject property. Under Code of Civil Procedure section 872.210, any owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate is owned by several persons concurrently or in successive estates may bring a partition action. (CCP § 872.210.) Therefore, a co-tenant has an absolute right to partition. (Formosa Corp. v. Rogers (1951), 108 Cal.App.2d 397.) At the Underwood Law Firm, our attorneys are more than familiar with partition actions and the step-by-step process of pursuing a partition.

Generally, a partition action cannot be stopped absent a valid waiver. Virtually universally, the instances in which a court has found a valid waiver have involved some sort of written contract or adverse possession of property. As such, many parties try to stop a partition action through mediation, or a buy-out agreement. In most instances, the parties to a partition action can benefit from creative lawyering by those who are familiar with the different options for resolving real estate disputes. The best San Mateo Partition Lawyer will be able to share information on this process with you.

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. A top San Mateo Partition lawyer will be familiar with the process.

What Are Claims for “Contribution”?

Code of Civil Procedure section 874.140 states that the “court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustments among the parties according to the principles of equity.”

The court in Hunter v. Schultz (1966) 240 Cal.App.2d 24 stated that the payments for interest, taxes, and insurance made by any co-tenant could be subject to reimbursement. These claims for reimbursement are commonly known as “offsets” in a partition action.

Further, the court under Milian v. De Leon (1986) 181 Cal.App.3d 1185, announced that a co-tenant who expends money for the preservation of the property, or with the [acceptance] of their co-tenant(s), is entitled to reimbursement for those expenditures before the division of the proceeds among the property owners.

That is, the general rule is that compensatory adjustments are appropriate for improvements that enhance the value of the property for all owners’ benefit. (see Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035-1036.) An experienced San Mateo Partition Attorney will be intimately familiar with these matters.

Can You Recover Attorneys’ Fees in a Partition Action?

Section 874.040 gives courts only two options in apportioning the costs and fees of partition: by ownership interest or by some other equitable apportionment. (see Finney v. Gomez (2003) 111 Cal.App.4th 527, 545 (Finney).)

Notably, appellate courts have found the statutory language of Section 874.040 to give courts broad and equitable discretion. (Lin v. Jeng (2012) 203 Cal.App.4th 1008.)

This sentiment that the record must support the allocation of attorney’s fees in an amount greater than disclosed by title is echoed in Stutz, where the appellate court held the trial court erred in apportioning 100% of the attorney’s fees and costs of a partition to the respondent. The appellate court recognized that trial courts are free to apportion fees and costs in an equitable manner yet held that the record must support such an arrangement in “any manner other than according to the respective interests of the parties in the property.” (Stutz, 122 Cal.App.3d 1, 5.)

For example, where a party refuses to simply resolve the issue where the other party was willing to sell, then a court has the authority to order a different amount of fees than disclosed by title. (Forrest v. Elam (1979) 88 Cal.App.3d 164, 174.) In other words, the resistance to selling the property may be a factor that a court considers in awarding attorneys’ fees in a partition action. A knowledgeable San Mateo Partition Attorney will be able to give you good advice on these issues.

A Partition Case Study: Dorfman v. Carter (2021)

How a partition affects the economic value of land is an important aspect that must be considered by the party bringing a partition action. In his treatise titled Metaphysics, famous philosopher Aristotle once stated, “The whole is greater than the sum of its parts.” In the context of partition actions, courts often choose to apply this very principle when determining whether to order a partition by sale versus a physical partition (in kind) of real property. In making this determination, courts often consider factors such as legislative history and legal precedent; local laws, regulations, and ordinances; as well as other circumstances, such as the rights of lien holders. The following paragraphs discuss how such circumstances affected the outcome of Dorfman v. Carter (2021) (2021 WL 3561360).

Mr. Dorfman and Mr. Carter each held title to an undivided one-half interest in a certain property in San Francisco. The property was zoned for residential use and included a single building with three separate residential units. Mr. Carter physically occupied and lived in the bottom unit of the building. Prior to the dispute between Dorfman and Carter, the entire property had been encumbered by two deeds of trust (showing that mortgage lenders had interests in the property) held by a bank. One of the deeds of trust contained an acceleration clause, under which the outstanding debt owed by Dorfman and Carter to the bank would become due if the bank’s interests were to become materially impaired by the initiation of civil or criminal proceedings.

In 2018, Mr. Dorfman filed a complaint against Mr. Carter to partition the property. As an initial matter, Dorfman and Carter stipulated to a conditional judgment with the bank, excusing its further participation in the lawsuit contingent upon the Court's entry of a judgment for partition by sale. Mr. Dorfman requested partition by sale and argued that a physical partition would violate the Subdivision Map Act, the San Francisco Subdivision Code, and the express terms of the deeds of trust by destroying the collateral property on which the loans were issued. In opposition, Mr. Carter argued that a partition by sale would be inequitable and requested that the property be divided into three separate tenancies in common, one for each individual residential unit of the building.

After considering these points, the trial court agreed with Mr. Dorfman and granted summary adjudication as well as an interlocutory judgment for partition by sale. The trial court reasoned that given the parties’ interests in the property, the fact that the property contained three (3) units, the restrictions placed on transfers by the deeds of trust, and strict rules against residential-to-condominium conversions, the property could not be physically divided. The trial court rejected Carter's request that the property be divided into three separate tenancies in common because nothing in the relevant partition statutes permitted ordering the parties to enter into a tenancy in common agreement to create three separate interests.

Mr. Carter eventually appealed the trial court’s judgement for partition by sale, rather than in kind, claiming that the trial court had erred. On appeal, the California First District Court of Appeal agreed with the trial’s court’s ruling and disagreed with Carter. The Court explained the difference between partition in kind—the physical division of property into parcels—and partition by sale, by which the property is sold and proceeds are then divided among the parties. The Court noted that in some situations, partition in kind may be favored because it does not compel a person to sell his property against his will. (See Cummings v. Dessel (2017) 13 Cal. App. 5th 589, 597.)

However, the Court also clarified that under the 1976 revision of California’s partition statute, which changed the standard needed for partition by sale from “great prejudice” to “more equitable,” the California Legislature made partition by sale the preferable method of partition in cases where it was previously precluded under the predecessor statute. (See Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 757.) The Court echoed the Legislature’s recognition that the sale of property is preferable in many modern transactions since the value of the divided parcels frequently will not equal the value of the whole parcel before division. In other words, the Court stated that the value of a whole parcel is often greater than the sum of its parts.

The Court also clarified that the party seeking partition by sale bears the burden of proving that a sale is more equitable than physically dividing the property. (Butte Creek Island Ranch v. Crim (1982) 136 Cal.App.3d 360, 366.) It noted that partition by sale rather than physical division may be justified based on evidence either that (1) the property cannot be divided into sub-parcels of equal value; or (2) dividing the land would substantially diminish each party's economic interest. (Id. at 366–367.) The Court acknowledged that where physical division may be impossible or highly impractical due to zoning restrictions, partition by sale is the preferred course of action. (See id. at 365.)

In denying Mr. Carter’s appeal, the Court pointed out that a partition in kind must comply with any applicable laws, regulations, or ordinances governing the division of property pursuant to California Code of Civil Procedure § 872.040. Under the Subdivision Map Act, landowners seeking to divide property must obtain city or county approval of the subdivision. (Witt Home Ranch, Inc. v. County of Sonoma (2008) 165 Cal.App.4th 543, 551, citing Gov. Code, §§ 66452.1, 66457, 66463.) The Court also noted that the San Francisco Subdivision Code limited the number of annual residential conversions and that applications were not being accepted before January 1, 2024. Because Dorfman and Carter could not submit an application until 2024 to convert the property as desired by Carter, the property was so situated that a division into sub-parcels of equal value could not be made.

The Court also rejected Carter's claim the trial court erroneously found that the bank’s deeds of trust rendered partition by sale more equitable than a partition in kind. The Court based this decision on the legal precedent that a partition cannot unlawfully interfere with the rights of lienholders. (Cummings v. Cummings (1888) 75 Cal. 434, 439.)

In conclusion, the Court affirmed the lower court’s judgement favoring Mr. Dorfman and ordering partition by sale.

Learn more here.

How the Underwood Law Firm Can Help

As we’ve seen, whether a party bringing a partition action prevails can depend on the Court’s consideration of various factors, such as legislative history and legal precedent; local laws, regulations, and ordinances; and the rights of lien holders. Evidence demonstrating whether the property in question can be divided into sub-parcels of equal value or whether dividing the land would substantially diminish each party's economic interest may play a critical role in the Court’s disposition.

As there are many different ways to waive the right of partition, and you are considering it as an option, then you may benefit from good legal advice on the topic. If you find yourself contemplating a partition action, or faced with defending one, then please contact Underwood Law Firm, P.C. for an initial consultation.

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