Partition Actions - Real Estate Disputes
WHAT IS A PARTITION ACTION
As California real estate prices continue to grow at record paces to unprecedented highs, properties that 5-10 years ago had little or no equity, now have significant amounts of equity. Unfortunately, as real estate values rise, more frequent disputes arise between co-owners of property.
The most common dispute between co-owners is whether or how to sell the property. Most commonly seen is the situation where one of the property owners wants to sell the property, while one of the other owners refuses to sell.
In California, there is a relatively simple legal procedure known as a partition action where the owner that wants to sell the property can obtain a court order:
(1) to force the sale of the property; or
(2) in rare cases to divide the property, or
(3) in certain cases to allow the defendant to buyout the interest of the owner seeking the sale.
See More Information Here:
- Details on the new California Uniform Partition of Heirs Act
- Partition Actions to achieve a buyout between co-owners of real estate
- Your right to accounting in Partition Actions
- Some alternatives to Partition Actions
- What are the typical results in Partition Actions
- What to do when one owner wants to sell their share of a property
ABSOLUTE RIGHT TO PARTITION
Except in extremely rare cases, co-owners of real estate have an absolute right to sell their interest in that property. This is true even if an owner has a very small fractional interest in the property.
Despite that absolute right to sell their interest in the property, it is not uncommon for co-owners of real property to disagree as to whether to sell the property, at what price, and how to distribute the proceeds from a sale. A partition action resolves these disputes, usually by a forced sale of the property unless the parties can negotiate a buyout before getting before the judge.
RIGHT TO REIMBURSEMENT
Partition actions are not limited to obtaining a court order to sell the jointly owned property. The Court has other equitable powers in a partition action including the court’s ability to conduct an accounting if there is an imbalance in payments made by the co-owners towards maintenance, improvements, taxes, or mortgage payments on the property, or an imbalance in who received rents on the property.
If the Court determines that one of the owners has paid more than their share of the costs in maintaining the property, as compared to the other owner(s), the Court has the power to order that the owner that has not paid their fair share, to reimburse the other owner(s) so the amounts that each have spent on the property are properly proportionate to each of the owners’ interests in the property.
To conduct the accounting, the Court would typically order the property be sold and then after determining the amount of net proceeds available from the sale, would issue an order on how those proceeds would be distributed after taking into account each of the owner’s ownership interests in the property, and whether one of the owners needs to be reimbursed for their share of rents that they never received or for their overpayment for property expenses.
I have represented many clients in partition actions and in negotiating disputes between co-owners of residential and commercial real property in Oakland, Walnut Creek, throughout the East Bay and the Bay Area.
If you believe that you would benefit from a consultation in regards to assistance with negotiating a buyout agreement between co-owners, real estate disputes between partners, or a partition action to resolve a dispute with a co-owner of real property, please feel free to contact me to discuss your case or to arrange for a consultation at (510) 465-0025 or contact me here.