People will find themselves co-owning real estate with other parties, whether jointly purchased or acquired through other means. Should these parties, except for a spouse, come to a crossroads on the use, division, or sale of not only that property but a home, farm, or anything attached to the land, the co-owners have the option to seek a legal remedy when they've exhausted other alternatives to come to a compromise. That legal remedy is a partition action.
Sometimes referred to as a partition lawsuit, a partition action is a real property dispute that seeks the equitable or otherwise fair "division" of real estate, as all co-owners are interested in the real property. Typically, partition actions involve unmarried couples, siblings, joint investors, and even between a parent and a child. And though partition by sale is probably the most common action, other options are also available.
Partition Actions: Partition by Sale
Partition by sale is just as it sounds. The resolution is the sale of the property. Let's say you've decided to purchase a home with someone you've been dating for a couple of years. Both of you have every intention of staying together. After the purchase, however, things don't go as planned, and you want to go your separate ways. What do you do with the property? You may want to sell the home, but the other person could choose not to. If you were married, the next step would be to consult a divorce attorney. But that's not an option.
Instead, you'd want to consult with an attorney familiar with California partition action before trying to force the sale of the property in question. If you fail to find common ground with the other party, the attorney will file a "partition by sale" with the court. From there, it's in the court's hands. But it usually follows a standard sequence where the judge will want to establish the fair market value of the property, as well as appoint a realtor or referee to sell the home. All proceeds from the sale will be held until the court establishes any necessary adjustments or credits to the funds before distribution.
Partition Actions: Partition in Kind
With partition in kind, the lawsuit would involve the literal division of the property. This action "is favored in law," particularly in the absence of proof. If, for example, you and your sibling were to inherit a large parcel of property, neither of you can agree on its use or sale. The court will likely decide to partition the land, granting you and your sibling ownership of two equal-sized lots of equal value. The same would hold with three co-owners, dividing the land equally between all parties.
Partition Actions: Partition by Appraisal
Partition by appraisal usually comes into play when one co-owner agrees — "agrees" being the operative word here — to sell the property to the other party. You agree to buy the other person's interest in whatever real estate you co-own together based on the value assessed during an appraisal and the share of the interest in question. If both parties own equal shares, the math is relatively simple. Other adjustments may be necessary based on any liens, mortgages, or credits involving the property, which is why it's important to iron out the details and agree on the terms before the transaction.
Challenges to Partition Actions
With partition actions, there are occasions when you may run into issues after filing. Even if the right to partition is final or without limitations in property law, questions can arise around the title and whether you've waived any of your rights relating to the real estate. Perhaps you and the co-owner have a written agreement involving the right of first refusal. This could influence the right to partition. Even discussions involving a waiver could affect a partition lawsuit. The same is true for challenges to a party's interest in the property, as might be the case if you were to own a share not deemed "sufficient" to file such an action. It's for these reasons that it's so important to talk with an attorney familiar with California partition action.
On the surface, partition actions may appear relatively straightforward. However, they're often very complex. Several legal requirements must first be met for the action to be considered a valid complaint. Only then can the co-owners move into the interlocutory judgment phase, where the court begins to work on a settlement. Consulting with an attorney ensures you understand all the necessary details involving the partition action in your county or jurisdiction.
If you have questions involving what is a partition action and whether it's the correct measure to take in a particular real property dispute, please contact us today. We'd be more than happy to discuss your options.