ORANGE COUNTY PARTITION LAWYER
ANAND LAW represents co-owners of real estate in partition actions in Orange County and throughout California. We represent parties that co-own all types of properties, including residential, commercial, mixed use, industrial, multi-family, apartments, and vacant land.
ANAND LAW is composed of attorneys, accountants, and real estate brokers who bring a breadth of experience and knowledge to these roles. Our extensive litigation and property law experience allow us to resolve disputes over co-ownership of property expeditiously while ensuring that you receive every penny you are entitled to.
1. PARTITION BASICS
2. COMMON PARTITION SITUATIONS
- Partition by Sale or Partition by Appraisal
- Partition by Valuation
- Partition of Heirs Property
- The Partition of Real Property Act
4. THE ABSOLUTE RIGHT TO PARTITION
5. WILL THERE BE A TRIAL IN A PARTITION CASE?
6. CO-OWNER’S RIGHT OF FIRST REFUSAL DOES NOT PREVENT PARTITION
7. EXTENSIVE EXPERIENCE & EXPERTISE
8. READ MORE ON REAL ESTATE PARTITION LAW
PARTITION BASICS
When real estate is owned by two or more parties, and one co-owner wants to sell their portion but the other co-owners do not agree, a partition action can be used to force division of the property. A partition divides the property into equal shares and terminates the co-ownership so that each co-owner now has their own property.
There are two types of partition: “Partition in Kind” and “Partition by Sale.” Partition in Kind is a physical division of the property, and each co-owner becomes the sole owner of one portion of the property. Although this was the preferred method of partition historically, it is usually infeasible due to many factors: the property is one home or building and cannot be physically divided; there is no way to fairly divide the property; and/or compliance with land use laws and the Subdivision Map Act is not feasible or practical with a physical split.
Partition by Sale is exactly what it sounds like: the Court forces a sale of the property. Of course, if the parties agree to sell, no court action is necessary. And this should be the starting point for any co-owner looking to get out of their arrangement with the other owners: try to work out an agreement with your co-owners.
If there was a prior written or verbal agreement regarding ownership of the property, the co-owners may be required to take certain actions before filing, such as first offering to buy out the others’ shares or allowing co-owners’ to match any potential third party offers.
If you would like to file a partition action, or have been named as a defendant in a partition action, contact ANAND LAW today. We are partition lawyers that will resolve your co-ownership dispute in the quickest way possible, while also making certain that you get all the money that you are entitled to.
COMMON PARTITION SITUATIONS
The need for a partition often arises in situations where there is a divorce or other break up or after a death where multiple parties have an inherited interest and are in disagreement as to their interests or how to divide them. It may also occur when multiple parties own a property that only one of them is living in.
Typical scenarios where partition is needed include:
- Divorce
- Couple breakup, former boyfriend and girlfriend, other romantic relationship
- Parents and children
- Inherited property (siblings and other family members)
- Co-ownership by cousins, aunts and uncles
- Co-ownership by friends
- Co-ownership by investors and former business partners
Forcing the Sale of Inherited Property
Property inherited (by will, trust or through the intestate probate process) often results in co-owners that do not actually want to own property together. Often one party lives in the property, and the others do not. Or, one party begins collecting rents and basically takes over the property and treating the others unfairly. We have seen countless variations on these scenarios. Ultimately, one or more co-owners are not getting their fair shake, and it only makes sense to force a sale of the property so that they can get the percent they are entitled to.
Forcing the Sale of Property after a Divorce
After divorce proceedings, the couple that split still sometimes co-own property. In some cases, it was a rental or income property that the parties thought could be co-owned and the money split. But then one co-owner starts acting unfairly. Or the parties then have different opinions on how to manage the property, what to charge for a new lease, or whether or not to sell. Usually, property jointly owned after a divorce needs to be partitioned. It is simply not worth it to co-own the property, when you can sell it, collect your fair share, and be on your way to living a more peaceful life.
Forcing the Sale of Co-Owned Investment Property
If property was purchased by investors solely to flip, rent out, or use as income property, the partition process will be relatively straightforward. If investors co-own a property, they have partition rights just like any other co-owners. This means that any co-owner investor, whether they have a smaller or bigger share, can force the sale of the property, or the buyout of their interest.
However, if a business—other than one that involves solely leasing the property—is involved, the situation may be considerably more complicated. For example, in certain situations where owners/business partners had agreements as to how they were going to use the land for business, California courts have found a waiver of the right to partition. Other specific situations where California Courts have found a waiver of the right to partition include: where the co-owners have an active operating agreement to use the land to run an oil business; where there was an agreement to provide continuous income to investors under a long term lease. Essentially, if owners have an operating agreement or other business contract where they have decided how to use the property, a Court may find that they have agreed not to partition the property.
Each situation is unique, and a thorough understanding of all California cases is necessary to evaluate your situation and make the best possible decision as to how to proceed. Anand Law’s attorneys are partition lawyers and business lawyers. We have a deep understanding of partition laws, and also of business agreements (such as operating agreements, joint venture agreements, license agreements, by laws and resolutions).
TYPES OF PARTITION
Partition by Sale or Partition by Appraisal
Usually, the court will order a division by sale unless the parties agree to partition by appraisal or the court determines a division in kind (i.e. physical division) is possible. Once this is determined, the court appoints a partition referee to handle the actual partition of the property. The partition referee may be authorized to employ attorneys, surveyors, engineers, and others to carry out the division.
Partition by Valuation
If the parties agree, the property can be partitioned based on a valuation. There are a number of ways to do this, but generally an appraiser will be agreed upon, or the parties will submit names to the Referee and/or the Court, and one will be selected (of course, these parameters can vary based on the parties creativity and leverage); and after a final valuation is set based on the parameters agreed to, each party will be given a chance to buy the other out, and if neither does, the property will be sold and the proceeds divided based on ownership interests, other adjustments, and equity.
As part of the partition process, there will be an accounting of charges and credits to each co-owner’s share. Both plaintiff(s) and defendant(s) will want to seek reimbursement of money spent to maintain, improve or preserve property that benefits all co-owners. Credits can include expenditures in excess of the co-owner’s fractional share for necessary repairs, improvements that enhance the value of the property, taxes, payments of principal and interest on mortgages, and other liens, insurance for common benefit, and protection and preservation of title.
Partition of Heirs Property
The Uniform Partition of Heirs Property Act (UPHPA) modified the above statutory framework, effective January 1, 2022, creating a right for certain co-owners to force a buy-out based on an appraised value of the property. The UPHPA applies to “Heirs Property”—defined as property (i) owned at least 20% by relatives and (ii) where the interest of the party seeking to buy-out was acquired by a relative. California Code of Civil Procedure §874.311 Et Seq. (2021).
Under the UPHPA, when an action for partition is filed by a co-owner of inherited property, the other co-owners/heirs are provided with an opportunity to buy out the property at fair market value. The co-owner seeking to buy out the others’ shares must timely make an election with the court and timely deposit sufficient funds with the court.
The Partition of Real Property Act
In actions filed after January 1, 2023, the Partition of Real Property Act applies to all property held by tenants in common unless (1) they have an agreement not to partition the property, or (2) they have a written agreement specifying another procedure for partition of the property. Thus, unless an action was filed January 1, 2022 and December 31, 2022, or prior to that time period, the Partition of Real Property Act applies to all property held by tenants in common unless one of the above two exceptions applies, whether or not the property is “heirs” property. It does not, however, apply to property held by joint tenants.
The Partition of Real Property Act requires the Court to determine the “fair market value” of the property, subject to limited exception. After the fair market value is determined, the parties/cotenants that did not request a partition by sale are allowed to buy out the interests of those that did request a partition by sale. Subsequent to this buy-out process, if a party/ies duly completes the buy-out process, the Court will enter an order reapportioning the interests accordingly.
If no party elect to buy out the cotenants, the Court shall order Partition in Kind, unless Partition in Kind would result in great prejudice, in which case it shall order a Partition by Sale.
THE ABSOLUTE RIGHT TO PARTITION, AND EXCEPTIONS
In California, the right to partition property is absolute, subject to very minor exceptions. In other words, a co-owner of property can force the sale of that property, or force the buyout of their interest in the property. This is true even for owners who have a smaller interest in the property than others.
For example, five siblings inherit a property. Initially, each has a 20% interest in the property. However, one sibling then acquires the interest of three others, giving that sibling 80% of the property. Now, there are two co-owners, one with 80% and the other with 20%. The 20% co-owner still has a right to partition. A partition action will always result in a forced sale or buyout. Unless the property can be physically divided, the 20% co-owner is entitled to force a sale or buyout, and the 80% co-owner has no defenses.
Although partition is regarded as an “absolute” right, there are exceptions. Community property cannot be partitioned. The right to partition can also be waived by either express or implied agreement. Waiver can be written or oral, but proving an oral waiver will almost certainly be difficult. California Courts have found a waiver of the right to partition where parties to divorce actions entered into property settlement agreements allowing one spouse to live on property for life or until remarried. However, even life and remainder estates can be partitioned in the right situations.
California Courts have also found a waiver of the right to partition in situations where co-owners had agreements as to how they were going to use the land for business, such as: where the co-owners have an active operating agreement to use the land to run an oil business; where there was an agreement to provide continuous income to investors under a long term lease. Each situation is unique, and a thorough understanding of all California cases is necessary to evaluate your situation and make the best possible decision as to how to proceed.
WILL THERE BE A TRIAL IN A PARTITION CASE?
If a case is solely for partition, the case can be resolved by motion, and no trial is held. See, LEG Investments v. Boxler (2010). Partition actions are equitable proceedings, and “there is no right to a jury trial in civil actions that are equitable in nature.” Meyer Koulish Co. v. Cannon (1963) 213 Cal.App.2d 419, 430-431; see American Medical International, Inc. v. Feller (1976) 59 Cal.App.3d 1008, 1013.
If, however, you are bringing other claims which require factual testimony, a trial may be necessary. The other claims depend on the facts of your specific case. Some examples of claims that may be brought are for conversion, breach of fiduciary duty, breach of contract, and breach of partnership agreement. Again, the claims will depend on the facts in your situation. A party bringing claims will want to weigh the benefits and downsides to bringing different claims, and strategically decide on what is best. ANAND LAW has successfully represented parties in property cases between spouses, boyfriend and girlfriend, siblings, and business partners. We have the experience and dedication to create the best plan of action for your particular situation.
CO-OWNER’S RIGHT OF FIRST REFUSAL DOES NOT PREVENT PARTITION
A co-owner can force partition despite an agreement giving each co-owner a right of first refusal. The California Court of Appeal dealt with this issue in Leg Investments v. Boxler. The co-owners had an agreement which required them to, before selling their interest to a third party, allow the other co-owner to purchase it at the same price. The co-owner who wanted to sell his interest (“Leg”) found a buyer, and then offered to sell it to the co-owner (the “Boxlers”) for the same price. The Boxlers refused to buy Leg’s interest. Leg then demanded that the entire property be listed for sale, or that the Boxlers by out his interest. The Boxlers again refused.
Left with no other option, Leg filed an action for partition. The Boxlers argued that their agreement to have a right of first refusal amounted to an agreement that the parties waived their right to partition. The Trial Court agreed, finding that there was an implied waiver. However, the California Appellate Court disagreed and reversed the Trial Court’s decision, finding that the right of first refusal “merely modifies the right of partition to require the selling cotenant to first offer to sell to the non-selling cotenant on terms as favorable as those offered by the prospective buyer.” This is now the law in California. If you have an agreement (written or verbal) with co-owners, and you want to divide your property, contact ANAND LAW today for a no-obligation evaluation of your situation.
We have counseled and represented parties in connection with real property ranging in value from $300,000 to $25,000,000, including residential properties, multi-units, and apartments. ANAND LAW has successfully represented parties in property cases between spouses, boyfriend and girlfriend, siblings, and business partners. We have the experience and dedication to create the best plan of action for your particular situation. ANAND LAW is a partition lawyer that can end your co-ownership expeditiously and ensure that you get every penny you are entitled to.
See more:
Partition Law Past and Present: The Partition of Real Property Act and its Predecessor The Uniform Partition of Heirs Property Act
Distribution of Proceeds from a Partition Sale: Expenses, Costs, Fees, Liens…and Adjustments Based on Equitable Considerations
Will My Attorney’s Fees Be Paid For By The Other Side In A Partition Case?
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ANAND LAW is composed of attorneys, accountants, and real estate brokers. We represent parties in partition actions and serve as court-appointed partition referee throughout California, including the cities and areas of Aliso Viejo, Anaheim, Brea, Buena Park, Costa Mesa, Coto de Caza, Cypress, Dana Point, El Modena, Emerald Bay, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, Irvine, La Habra, La Palma, Ladera Ranch, Laguna Beach, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forest, Las Flores, Los Alamitos, Midway City, Mission Viejo, Newport Beach, Olive, Orange, Orange Park Acres, Placentia, Rancho Mission Viejo, Rancho Santa Margarita, Rossmoor, San Clemente, San Juan Capistrano, Santa Ana, Santa Ana Heights, Seal Beach, Silverado, Stanton, Stonecliffe, Sunset Beach, Surfside, Trabuco Canyon, Tustin, Tustin Foothills, Villa Park, Wagon Wheel, Westminster, and Yorba Linda.
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