California Partition Action

A California Partition Action is a legal process used to resolve disputes between co-owners of real property when they cannot agree on how to divide, retain, or sell the property.

Real estate attorney Leo B. Siegel discusses the different types of partition, how a partition lawsuit proceeds through the California courts, and the circumstances under which a court may order the sale of jointly owned real estate.

Depending on the circumstances, a court-ordered sale may be conducted through a real estate broker or another court-approved procedure. Filing a partition action does not automatically require a courtroom auction.

Editor’s Note — California Partition Laws

This video discusses California partition procedures as they existed when the interview was recorded. California law has since changed, including the adoption of the Partition of Real Property Act, which applies to qualifying partition actions filed on or after January 1, 2023.

A partition action does not automatically result in a courtroom auction. Depending on the circumstances and applicable law, the court may consider physical division of the property, a buyout, or a court-ordered sale. Open-market sales through licensed real estate brokers may also be available.

Partition litigation can involve attorney’s fees, referee expenses, and other costs that the court may allocate among the co-owners. Rights involving buyouts, reimbursement for improvements, and objections to partition depend on the circumstances.

The recorded interview is preserved for educational purposes. Co-owners considering a California partition action should consult a qualified California real estate attorney for guidance under current law.

The question has arisen as to what happens when someone inherits property, or two people inherit property, and one of them wants to sell it to cash it out, but the other one doesn’t want to do that and wants to either rent it out or continue living in it if they were living in it before.

How do you get the property sold for the party that wants to be cashed out?

What we are talking about here is called California Partition Action.

How to win a partition action? The law in the State of California will not require someone to continue owning a property with someone they co-own it with if one of the parties wants to sell it and the other one doesn’t. The best way to win is for the parties to agree on how they will move forward and avoid a partition suit.

The law provides an action called the California Partition Action to dispense with that issue.

Three Types of Partition

1. The first is called Partition in Kind, which would apply if you have items that are fungible and divisible, like a sack of beans. This will not apply to the real property unless you own two real properties that are identical. One can get one property and one the other.

2. There is a second type of partition that is often used with real property. It’s called Partition by Appraisal, where the parties mutually agree that they will get the property appraised with a mutually agreeable appraiser, and they will agree to be bound by the value of the property.  As long as they do not disagree as to the percentages of ownership of the property, whether it is 50/50 or otherwise, they either sell the property and then divide the proceeds in that manner, or one party agrees to buy the other out.

3. Partition by Sale. If they cannot agree to a partition by an appraisal, but still one party wants to be cashed out,  and the other party will not buy them out, the law provides for a third type of appraisal called partition by sale. That requires a partition suit. The others do not require a lawsuit.

California Partition Complaint – The Legal Process

A partition action is filed. The court will then conduct what is called an interlocutory hearing for the issuance of an interlocutory judgment, at which point the court determines the percentages of ownership of this property.  Are they 50/50 or 75/25? It depends upon the facts.

Assuming they are 50/50, the court will then appoint a referee who takes control of the property and selects a real estate agent. The Realtor goes out and gets potential buyers for the property. The buyers are all told the sale is subject to approval by the court. The buyers all come together on an appointed date for an auction in the courtroom. It’s a regular type of auction where there can be overbids, and anybody can overbid.  Even if one of the owners can overbid, and likely be able to get credit for their half interest in the property if it is a 50/50 ownership.

It is a relatively simple type of lawsuit because there are no defenses to it except for the one major defense would be waiver. If the party that didn’t want to sell has a defense to the lawsuit that the other co-owner waived the right to partition, usually in writing.

Additional Discussion from the Interview

The following information provides additional examples and explanations from the original discussion with real estate attorney Leo B. Siegel. Some portions are not included in the published video. Please refer to the Editor’s Note above for important updates to California partition laws.

For Example, if the successful bid for the property is $1,000,000, they would only have to pay $500,000. They could get financing for $500,000 as opposed to one of the third-party buyers, who would have to come up with the full million dollars.

The real estate agent’s commission is then paid, the referee’s fees are paid, and the remaining proceeds, the equity, are divided between the co-owners.

One co-owner cannot say, “I’m not selling the property; too bad!” The court will force them to sell the property if there is a partition by sale is necessary.

How Much Does a California Partition Action Cost?

That is why it is always better for the parties to agree to a partition by appraisal. You save money that way. There are no attorneys involved. Any party in a partition action is going to pay its own attorney’s fees. It is money that is wasted if one party forces a partition suit.

California partition action attorneys’ fees. Attorney fees are agreed upon between the client and the attorney. The referee gets paid thousands of dollars, tens of thousands of dollars sometimes. That is money out of both co-owners pockets when they don’t agree on a satisfactory, mutually agreeable partition by appraisal.

Can a Partition Action be Stopped?

It’s a relatively simple type of lawsuit because there are no defenses to it, except for the one major defense, would be Waiver.

How to stop a petition to partition? The Waiver would be if the party that did not want to sell had a defense to the lawsuit, that the other co-owner waived the right to partition, usually in writing.

Sometimes I am asked, “Well, how do I get back the money for the improvements I spent on the property?”  That depends on how the title had been held. If it were held on co-tenancy as opposed to joint tenancy, one party could recover certain costs of improvements.  If it is held in joint tenancy before the partition sale, one joint tenant normally cannot recover costs of improvements unless there was an agreement or understanding in writing, as to one party being reimbursed for expenses they incurred on behalf of the entire property.

About Leo B. Siegel

Leo B. Siegel is a real estate attorney with decades of experience handling landlord-tenant matters, evictions, co-ownership disputes, contract disputes, fraud, title issues, easements, and boundary disputes.

He may be contacted at (831) 768-9110 or through the Stone Siegel Law Firm.

Need Legal Assistance With a California Partition Action?

If you are involved in a dispute over jointly owned real property, an experienced California real estate attorney can explain your legal rights and options, including filing or responding to a partition lawsuit, negotiating a buyout, and understanding court-ordered sale procedures.

For legal assistance, contact Leo B. Siegel using the telephone number or law firm link provided above.