The City of Santee was named after Milton Santee, a civil engineer, surveyor, miner, real estate developer, and entrepreneur in 1893. The land was used to raise cattle and used as a military training ground. Today, Santee is a suburban city in San Diego County, boasting a sunny climate, good schools, and small-town friendliness. Over 71 percent of Santee housing units are owner occupied, suggesting that many homes are jointly owned. Jointly owned real estate may become a problem if a dispute arises between co-owners.
What Is a Partition Lawsuit?A partition lawsuit requires real estate to be sold regardless of the requests of the other title owners. The purpose of a partition action is to permanently end all disputes and remove all obstacles to the free enjoyment of land by one person. (McGillivray v. Evans(1864) 27 Cal.92.) These types of actions can be brought for all types of real estate from houses to farms to office buildings to apartment buildings. Similarly, partition actions are available all types of ownership situations from joint tenants to tenants-in-common to partnership property to property jointly owned by former spouses.
Basically, any person who is an owner of real estate can bring a partition action in California. Code of Civil Procedure section 872.710, subdivision (a), states "A partition action may be commenced and maintained by any…owner of…such property." California Civil Code section 872.210 provides a property owner with the "absolute right to partition" absent a valid waiver. Thus, a partition action can be brought by anyone who no longer wants to own jointly owned real estate, other than spousal property.
Generally, a partition action cannot be stopped absent a valid waiver. Virtually universally, the instances in which a court has found a valid waiver have involved some sort of written contract or adverse possession of property. As such, many parties try to stop a partition action through mediation, or a buy-out agreement. In most instances, the parties to a partition action can benefit from creative lawyering by those who are familiar with the different options for resolving real estate disputes.
What Are the Steps in a Partition Action?Under the Partition of Real Property Act, the court instead appoints an appraiser to do the heavy lifting. The new statute states that the court “shall determine the fair market value of the property by ordering an appraisal.” (CCP § 874.316.) The court doesn’t have to be the one to order the appraisal, but this is only if all the co-owners agree to a different method of valuation.
If, however, an appraisal occurs, it shall be conducted by a disinterested third-party real estate appraiser licensed to determine the fair market value of properties. After the appraisal is conducted, parties may file objections to the value and can even offer additional evidence of value to the court.
After the valuation is complete, parties will be introduced to the key feature of the new statute: the buy-out option. If a co-owner requests a partition by sale, then the court will notify the other co-owners that they may buy all the interests of the cotenant that requested the partition. (CCP § 874.317.)
This is, essentially, a right of first refusal. The co-owners who don’t want the property sold now have the option to simply buy out the requesting party. Additionally, the buy-out price will be based on the property’s valuation, determined earlier in the litigation. And if one or more parties exercise the buy-out, then the court will reapportion ownership percentages based on the price paid.
What Are the Common Types of Partition Lawsuits?Generally, a partition action is the best remedy for disputing co-owners in four broad categories:
Generally, a co-owner of real or personal property may bring an action for partition. (CCP § 872.210.) Once a court determines that a plaintiff is entitled to partition, the court shall make an interlocutory judgment establishing the interests of the parties and order the partition of the property, and the manner of partition. (CCP § 872.720(a).) A partition may be in kind or by sale, depending on which method the court finds would be more equitable. Recently, the California Court of Appeal addressed the factors taken into consideration in determining the manner of partition in a case decided by Kenco Invs. v. Marsh (2020) Cal.App.Unpub.LEXIS 3939.)
There, Kenco Investments brought an action against Martha Marsh, a trustee of a living trust, to force the Trust to sell its one-half ownership in an office complex to Kenco, alleging that Kenco and the Trust had a written partnership agreement which allowed for this sale. Marsh filed a cross-complaint for partition of the Property. The trial court found that the partnership had dissolved, thus Kenco and the Trust owned the Property as joint tenants. The trial court then ordered partition of the office complex by sale. Kenco appealed, arguing that a partition by kind was appropriate.
The Court of Appeal affirmed, holding that the party seeking a sale of the property must show that either: “(1) a division into subparcels of equal value cannot be made, or (2) dividing the land would substantially diminish each party’s interest, such that each cotenant’s portion would be of substantially less value than that received on a sale.” (Butte Creek Island Ranch v. Crim (1982) 126 Cal.App.3d 360, 366-367.) The Appellate Court determined that the Property could not be divided equally as the adjacent parking lot could not be divided, thus requiring a partition by sale. Despite Kenco’s argument suggesting an easement, the Appellate Court determined that it could not force one owner to enter into an agreement with the other as both parties did not get along and any agreement would likely lead to additional future litigation. Further, an easement would still not affect an equitable division as one party would be given title to more property than the other. Therefore, the office complex is “so situated that a division into subparcels of equal value cannot be made.” (Butte Creek, 136 Cal.App.3d at 366.) Thus, Kenco Invs. teaches the factors that the court considers when determining the suitable manner for partition.
How Underwood Law Firm Can HelpIn order to start resolving these situations, you should contact an experienced Santee Partition Lawyer as soon as you are ready to start the next chapter of your life.
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