UNDERSTANDING TITLE DISPUTES & PARTITIONS
May 24, 2022
It often happens when two or more parties own property together that one party wants to sell and the other or others don’t. This can happen after an inheritance, when several heirs are awarded the title to the property. One or more may want to cash out, while the others don’t. It can also occur in divorce proceedings. One spouse wants to sell; the other doesn’t. This can cause a title dispute.
Still another example is that of investors who jointly own property and can’t agree on what to do with it. Even if one party doesn’t demand a sale, the parties might disagree on what to do with the property. One may want to build a warehouse, another a housing subdivision.
Whether a sale is involved or not, when co-tenants disagree on the future of the property they own and negotiations lead nowhere, there is a legal remedy known as a partition action, which places the matter in the hands of a court to resolve the dispute.
The court has three options in deciding the issue: it can order a partition by sale, a partition in kind, or a partition by appraisal, which is rarely used. The partition action will result in all parties sharing in proceeds from a sale, or in all parties being awarded a piece of the property.
If you’re involved in a dispute over what to do with a jointly owned property in California, contact the real estate attorneys at The Heritage Law Group.
With offices in San Jose and Aliso Viejo, we proudly serve clients throughout Northern and Southern California. With more than 35 years of experience in negotiating and otherwise resolving real estate disputes, we can help you pursue all options toward the best possible result.
Situations When Partition May Be the Answer
As discussed above, co-tenants can disagree on the future of their jointly held property under a variety of circumstances, including divorce, inheritance, and real estate investments.
Of course, the best route to resolving a property dispute is through negotiation, and all avenues to achieve an amicable resolution should be pursued before legal action is undertaken by filing a petition for partition. Court cases can be lengthy and costly, especially if the co-tenants all hire individual attorneys.
A partition action is addressed in the California Code of Civil Procedure. It clarifies that unless the co-tenants agreed in the beginning to waive the right to partition, then a co-owner has the right to file for partition.
As mentioned earlier, three types of partition are available – by sale, in kind, or by appraisal. Partition by sale involves the court ordering the property to be sold and the proceeds shared among the co-owners.
For example, Party A invested $100,000, and Parties B and C $50,000 each in purchasing the property. When the property is sold, Party A would receive half the proceeds, and B and C one-quarter each. If Party A, however, spent extra funds improving or repairing the property, consideration may also be given for that.
Partition in kind involves dividing the property among the co-tenants. This clearly wouldn’t work if the property is a single-family residence inherited by quarreling family members, but if it’s a tract of land ripe for development, the investors could be awarded a portion each according to their initial investment.
In general, courts tend to favor physical division over a sale unless a partition by the sale would be “more equitable.”
As a third option, there might be, in rare instances, a partition by appraisal, allowing one owner to buy out the rest. For sale or division, the court will appoint a partition referee to carry out the decision.
Experienced Legal Counsel You Can Trust
Partition action could well result in some or all of the parties feeling cheated or deprived, or at the very least dissatisfied. That’s why, before commencing a partition action, you should consult with an experienced real estate attorney to help resolve the dispute. If negotiations or mediation fail, then a petition for partition may be the only route left.
At The Heritage Law Group, we serve clients in both Southern and Northern California. Contact us with all your real estate questions and issues. We are experienced and knowledgeable in all phases of real estate law.