underwood-who-pays-for-partition-action-300x300A partition action is the legal process of co-owners dividing a piece of real property. There are various reasons why a partition may be necessary, and different types of partitions exist to ensure the proper remedy is available when these circumstances arise. Co-owners involved in partition actions commonly ask who is responsible for the costs of partition including expenses like attorney fees, surveyor fees, and court costs. The costs of partition are typically divided equitably among co-owners based on their ownership interests. Understanding how the court determines who is responsible for the costs of partition is a crucial part of navigating this complicated legal process.

What is a Partition Action?

Partition is a legal procedure used to divide property among co-owners, ultimately severing their joint ownership interests and can be done in several ways: Partition in Kind, Partition by Sale, and Partition by Appraisal. 

underwood-resulting-trust-constructive-trust-300x300Trusts are an important way to set out one’s wishes for how and when you want to transfer assets like property. While trusts usually are set up as written contracts, other trusts can be enforced by the court, like resulting trusts and constructive trusts. These types of trusts are involuntary, meaning a court imposes them as a remedy to prevent an inequitable result, when property is wrongfully taken or transferred. (Kenneally v. Bank of Nova Scotia (2010) 711 F.Supp.2d 1174, 1190.) A resulting trust may arise where the transferor did not want the transferee to have a beneficial interest in the property. A constructive trust is used by the court to prevent unjust enrichment.

What are some similarities between resulting and constructive trusts?

Both resulting and constructive trusts are involuntary because they are imposed by the court to reach an equitable result. (In re Raymond Renaissance Theater, LLC (Bankr. C.D. Cal. 2018) 583 B.R. 735, 746.) Because they are imposed by the court and not preexisting or stemming from a contract, they are exempt from the Statute of Frauds. This means there is no writing requirement for the trust to be enforced. (Martin v. Kehl (1983) 145 Cal.App.3d 228, 238.) They both have a similar purpose in identifying and then enforcing beneficial rights in property for a third party. (Holder v. Williams (1959) 167 Cal.App.2d 313, 315-316.)

underwood-grandfather-clause-real-estate-300x300A grandfather clause in a real estate context means a clause from a law or regulation was grandfathered in from an old version of that law or regulation. This means even if the law currently would affect someone if they were exempt under the old version of the law those rights have been “grandfathered in.” This is important in real estate because this allows properties, and thus their owners, to be exempt from current zoning laws and regulations. This exemption is meant to protect property owners against impermissible government takings of their property allowing for continued development. This means governments will pursue relocation agreements or other agreements to accommodate property owners as new ordinances are enacted. (Bus. & Prof. Code, § 5412.)

What do grandfather clauses allow for?

Properties may allow properties to maintain their current use or structure even when the law changes. This also protects those property owners from fines or the costs of needing to make the property compliant. Owners need to be able to show the property’s history if rights are at issue. For example, owners must be able to show the property existed or operated prior to the new legislation. To know if grandfathered rights apply, owners and/or their attorneys should look to California Planning and Zoning Law (Government Code Title 7, Division 1, Chapter 4.) If the property raises environment impact concerns, like if a project for construction or expansion is proposed, they will look to the California Environmental Quality Act. (Public Resources Code, Division 13, Section 21000 et seq.)

underwood-what-is-encumbrance-300x300An encumbrance is a term frequently used in context with real estate. It is most often used with regards to property transfers. When contracting to sell or convey property it is usually implied that that property is being delivered free of encumbrances. (Smiddy v. Grafton (1912) 163 Cal. 16, 18.) This means the property is free or will be freed by time of sale, of any issues with title or things on the land that would decrease its value or cause problems with ownership down the line. (Hagge v. Drew (1945) 27 Cal. 2d 368, 376.) As such, encumbrances can make the property unmarketable and can affect the title to the property or the physical condition of the property.

What are some encumbrances that affect a property’s title?

If an encumbrance impacts a property’s title it may hold implications for the future holder of title.  For example, a mortgage is a type of encumbrance that impacts a property’s title. (Cal. Civ. Code § 2923.) Encumbrances may be any taxes, assessments, or liens on the property. (Cal. Civ. Code § 1114.) The list of encumbrances offered by under the California statute is not exhaustive, so anything impacting a property’s value may be covered. (Evans v. Faught (1965) 231 Cal.App.2d 698, 706-707.) If these types of encumbrances are present, they may impact future payments an owner has to make on the property. If the encumbrance is a lien the new owner may have a claim against the prior owner for delivering encumbered property. This is because if the lien is defaulted on, creditors may come after the property for repayment. Similarly, a mortgage acts as a debt on the property and the new owner should be aware whether they are assuming liability for the mortgage or not.

underwood-what-acts-breach-fiduciary-duty-300x300Fiduciary duties are legal obligations that one party owes to another in relationships involving trust, care, and loyalty. California law places significant emphasis on upholding these duties when fiduciaries, such as attorneys, fail to act in their client’s best interests, often for personal gain or through negligence. Breaches of fiduciary duties carry serious legal and financial consequences like lawsuits and other remedies including monetary damages. When a fiduciary breaches their duties, the injured party may seek legal recourse to remedy the harm caused. 

What is a Fiduciary Duty? 

Fiduciary duties are legal obligations requiring one party to act in the best interests of another, with the utmost good faith, loyalty, and care. Fiduciary duties arise in relationships entrusting one party with responsibilities that involve trust, reliance, and confidence. A “fiduciary” owes the “beneficiary” the fiduciary duties. 

underwood-child-support-liens-real-estate-300x300Yes. Child support liens attach to real estate in California both voluntarily and involuntarily. Liens are effectively a public notice of outstanding claims against your property. In the case of child support, a custodial parent can place a lien against the non-custodial parent’s property when they fail to make court ordered payments. Child support liens last until the non-custodial parent resolves their debt by payment in full. 

What is a Lien?

Non-custodial parents in California pay the custodial parent child support payments because they do not have primary physical custody of their child(ren). Non-custodial parents enter a payment deficit when they fail to make child support payments, subsequently allowing courts to place a lien on the non-custodial parent’s property. (Code Civ. Proc., § 697.320; Fam. Code, § 17523.) 

underwood-what-is-commercial-real-estate-300x300Commercial real estate is property being operated to generate business revenue through rental income or capital gains. Because it is meant to generate revenue if it is residential property, it must be used as rental housing to still be considered commercial real estate. It is not personal property. 

Commercial real estate may have multiple uses, like stores and offices or stores and residential property. Under California’s Civil Code, commercial real estate is treated separately from residential real estate. Commercial real estate buyers are presumed to be more experienced and sophisticated in their transactions. This is also because they are usually represented by an agent or broker who represents only their interests. (Easton v. Strassburger (1984) 152 Cal.App.3d 90, 103 fn 8.) Generally, a seller via their broker is required to disclose all facts materially affecting the value or desirability of the property to the purchaser (Civ. Code, § 2079.) This is called the transfer disclosure law. However, this only applies buildings with four or fewer dwellings, so the “transfer disclosure law” usually does not apply to commercial real estate. 

With mixed use properties it may apply depending on the “sophistication” of the buyer. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1189–1190.) There is less protection for commercial tenants, like businesses occupying commercial real estate. Commercial tenants are considered to be “differently situated” than residential tenants. (Civ. Code, § 1993.04) Commercial tenants are more likely to have resources if the need arises to vacate the rental premises.

underwood-judgments-name-fiduciary-300x300Yes. Judgments should properly name the fiduciary in their representative capacity when the fiduciary is involved in legal proceedings on behalf of a trust, estate, or other entity. Fiduciaries, such as trustees or executors hold a position of legal responsibility to manage and protect the interests of the beneficiaries or estate that they represent. Ensuring that fiduciaries are properly named and identified in their representative capacity clarifies their role in the proceeding and helps eliminate confusion about personal and official liability. Overall, properly naming fiduciaries in their representative capacity safeguards the fiduciary and the trust or estate they manage by providing clear understanding of the fiduciary’s duties and limitations.  

What is a Fiduciary? 

A fiduciary is an individual who assumes a position of legal responsibility to act in their client’s best interests. This role includes serving their client as a personal representative, guardian, trustee, conservator, attorney-in-fact, or custodian under the California Uniform Transfers to Minors Act. (Prob. Code, § 39.) The fiduciary relationship begins when the individual starts acting on behalf of the client for the client’s benefit. 

underwood-guide-dividing-property-appreciation-300x300Dividing property following divorce or dissolution proceedings can be complicated under family law principles. If the property has appreciated in value, this can make dividing it more contentious and complicated. 

Under family law, a married couple’s earnings received during marriage are considered community property and are divided evenly at divorce. (Cal. Fam. Code § 770-772.) Property that is held in joint title by the spouses is usually considered community property and will be divided as such, meaning 50/50. (Cal. Fam. Code § 2581.) Property can also be converted to joint title if one spouse held it separately before the marriage. This presumption that the property is community property applies absent a written agreement otherwise. Couples can also execute an Aufmuth agreement which essentially states the spouse contributing separately gets a pro rata share in the increased equity of the property or asset. (Cal. Fam. Code § 852.) This ensures the spouse does not just get a flat reimbursement of the amount they paid.

How is Community and Separate Property Divided?

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