Posted on January 10, 2015
It is common for two or more individuals or business entities to hold title to real estate as co-owners, also known as “tenants in common.” In this type of ownership, each party owns an undivided interest in the whole. This may work well as long as the parties agree on what to do with the property. But what happens when the relationship sours or the parties otherwise reach an impasse?
California law expressly provides that a co-owner of real property is entitled to separate the common interests. The means by which this is done is an action to “partition” the property. Except in the relatively uncommon case of a waiver or some other equitable defense, the right of partition is an absolute right.
A partition action may be used by parties who hold successive estates-such as a life estate and a remainder. Partnership property may also be partitioned.
Some of the basics of a partition action are:
- Each co-owner has the right to seek a court judgment partitioning the property- no special reason and no special proof is required.
- There are different methods of partitioning property, each one suited to particular circumstances. Unless the property is reasonably capable of being physically divided in some fair and equitable fashion, the method most likely to be used is a partition by sale. In a partition by sale, the property is sold at the best possible price and the proceeds of sale divided among the parties according to their respective ownership interests. Another method of partition is for one or more of the co-tenants to acquire the property of another co-tenant at its appraised value.
- Partition actions can be-and typically are-resolved by agreement of the parties. While there are few guarantees in life or in the law, the co-owner who is unreasonable may become more reasonable when he or she realizes that a partition by sale (or by some other method) is inevitable. With a reasonable degree of cooperation, the parties can set the terms and other parameters of the sale in advance. If the parties are unable to agree, the court can appoint a “referee” to sell the property.
Again, these are some of the more basic concepts of a partition action; there is much more complexity in the law. The key is to find a legal advisor who can efficiently guide you through the process.
Lance Adair is an “AV-Preeminent”-rated attorney who practices in the areas of Real Estate and Land Use, and splits his time between our Irvine and Temecula offices. Mr. Adair can be reached at ladairat-sign kringandchung DOT com.