Code of Civil Procedure (CCP) Section 874.318 – Partition Alternatives

This section of the partition statutes is important because it expands on cotenants ability to buy out another cotenant. Specifically, this section expands on what the court can order if the buy out is unsuccessful.

Code of Civil Procedure section 874.318 states:

1. If all the interests of all cotenants that requested partition by sale are not purchased by other cotenants pursuant to Section 874.317, or if after conclusion of the buyout under Section 874.317 a cotenant remains that has requested partition in kind, the court shall order partition in kind unless the court, after consideration of the factors listed in Section 874.319, finds that partition in kind will result in great prejudice to the cotenants as a group. In considering whether to order partition in kind, the court shall approve a request by two or more parties to have their individual interests aggregated.
2. If the court does not order partition in kind under subdivision (a), the court shall order partition by sale pursuant to Section 874.320 or, if no cotenant requested partition by sale, the court shall dismiss the action.
3. If the court orders partition in kind pursuant to subdivision (a), the court may require that one or more cotenants pay one or more other cotenants amounts so that the payments, taken together with the value of the in-kind distributions to the cotenants, will make the partition in kind just and proportionate in value to the fractional interests held.
4. If the court orders partition in kind, the court shall allocate to the cotenants that are unknown, unlocatable, or the subject of a default judgment, if their interests were not bought out, a part of the property representing the combined interests of these cotenants as determined by the court.

This section is similar to section 8 of the Uniform Partition of Heirs Property Act and has not been amended since its enactment. This section expands on the ability to buy out cotenants as stated in CCP § 874.317. If there are insufficient funds the court must order partition in kind unless it would cause great prejudice to the interests of the cotenants as a group. The court will favor a partition in kind among the non-selling cotenants if there are any.

The Partition of Real Property Act was an outgrowth of a law review article titled Historic Partition Law Reform (2019) Texas A&M Legal Research Paper Series No. 19-27 by Thomas W. Mitchell (“Law Reform”). (see also Thomas W. Mitchell, Reforming Property Law to Address Devastating Land Loss, 66 Ala.L.Rev. 1, 9, 29 (2014).

The buyout remedy could help property owners who want to maintain ownership of the property in two ways. First, in cases in which heirs who are able to buy out a cotenant that petitioned a court for partition by sale, all of the heirs who had sought to maintain ownership of the property would benefit from the buyout, including those heirs who could not participate in the buy out because they lacked any financial resources to do so. (see Law Reform, p. 73.)

If the buyout remedy does not resolve the partition action, the Act seeks to strengthen the property rights of heirs’ property owners by adding real substance to the preference for a physical division of the property instead of what had become a de facto preference for partition by sale in many if not most States. (see Law Reform, p. 73.)

Previously, advocates “overestimated the degree to which partition sales have been a source of black land loss.” (Thomas W. Mitchell, Destabilizing the Normalization of Rural Black Land Loss (“Destabilizing”), 2005 Wis. L. Rev. 557, 581 (2005); see Faith Rivers, Inequity in Equity (Temp.Po.&Civ.Rts.L.Rev. 2007) 1, 31 (“There is little empirical data documenting claims of African-American land loss” [due to partitions].) (“Inequity”).) Others have claimed that low will-making rates for African-Americans represent a present day manifestation of the ways in which African Americans after the conclusion of the Civil War were deprived of access to attorneys and even to basic information about estate planning, but this theory has not been verified in any meaningful way. (see Law Reform p. 68.)

The buyout remedy may also have a prohphylatic effect in that it may de-incentivize certain tenants in common from filing a partition action and petitioning a court for partition by sale in the first instance to further their plans to acquire sole ownership of the property for a bargain price. (see Law Reform, p. 73.) The Act fundamentally restructures the sales procedure nearly every state has used in selling heirs’ property. (see Law Reform, p. 74.)

The Partition of Real Property Act seeks to address consequences of this type of property ownership, and which California adopted in 2022.

For example, “Shawn” wants to partition a home he owns with his siblings “Mike” and “Julie” as cotenants. Mike and Julie want to buy Shawn out of his interest as a cotenant. However, Julie and Shawn do not have enough funds pooled together following the appraisal of the property. While a court could order for partition in kind, because the property at issue is a home it is unlikely to be able to be divided into three parts.

It is likely the sale of the home would proceed and the profits from the sale would be divided equally between the cotenants.

Alternatively, if the property at issue was a field or type of property more easily physically partitioned it is likely the court would order a partition in kind.

Here at Underwood Law Firm, our knowledgeable attorneys are here to help navigate the complex web of case law and statutes surrounding partitions. If you are thinking of filing a partition, are already in the midst of a partition suit, or just have any questions, please do not hesitate to reach out to our office.