What are the Different Types of Co-Owner Relationships?
Partition actions most often result from joint ownership problems falling into four broad categories: (1) Father/Mother-Son/Daughter tenants in common in real estate; (2) Brother-Sister shared tenants in common in real estate; (3) Investor-Investor shared tenants in common in real estate, and (4) Non-Married Partners shared tenants in common in real estate.
How Do People Own Real Estate Together?
A co-tenancy occurs when more than one person owns an undivided interest in the property. The most common forms of holding title together with others are joint tenancies or tenancies in common. Additionally, property ownership can be held by tenancy of the entirety or a trust.
A joint tenancy is created when a joint interest is owned by two or more persons in equal shares, by a title created by a single will or transfer, when expressly declared in the will or transfer to be a joint tenancy. (Cal. Civ. Code § 683.) Typically, the deed will state the equal interests of each person as joint tenants. Under common law, in creating a joint tenancy, four unities are essential, including (1) unity of interest, (2) unity of time, (3) unity of title, and (4) unity of possession. (Hammond v. McArthur (1957) 30 Cal.2d 512, 514.) Where any one of the essential unities is destroyed, the joint tenancy is severed, and a tenancy in common results. (Swartzbaugh v. Sampson (1936) 11 Cal.App.2d 451, 454.)
Unlike joint tenancies, which are favored in common law, tenancies in common are favored in California. (Cal. Civ. Code § 1431; Swartzbaugh 11 Cal.2d 451.) Instead of the four unities, creating a tenancy in common merely requires an equal right of possession or a unity of possession. (Cal. Civ. Code § 686; Robinson v. Bledsoe (1914) 23 Cal.App. 687.) Each tenant in common is entitled to share equally in possession of the entire property. (Kapner v. Meadowlark Ranch Assn. (2004) 116 Cal.App.4th 1182, 1189.) The fundamental rule is that each cotenant has a right to occupy the whole of the property. (Jacobs v. Sobie (1939) 12 Cal.2d 618, 623.)
A tenancy by the entirety is another form of joint tenancy between a husband and a wife. This type of tenancy no longer exists under California law. (Zanelli v. McGrath (2008) 166 Cal.App.4th 615.) However, now, under California Civil Code section 683, married couples can hold titles together as community property, whether as joint tenants or tenants in common. (CCP § 872.210.)
Those who are named trustees of certain real property may also commence a partition action. Even though a trustee is not an individual who is enumerated in the partition statutes, if the trustee is also a co-owner of the property, he or she may commence a suit. (O’Bryant v. Bosserman (1949) 94 Cal.App.2d 353.) If real property is held in trust rather than an express trust for a beneficiary, that beneficiary may also seek to partition the property. (Varni v. Devoto (1909) 10 Cal.App. 304.)
What is a California Partition Action?
Generally, a partition is any division of real property between co-owners, where each co-owner obtains an ownership interest. A partition action is the forced sale of real property by a co-owner under the court’s supervision. Partition merely determines and allocates to the parties their respective interests in the property. (Cunha v. Hughes (1898) 122 Cal. 111.)
In the partitioning of property, the common interests in the property are segregated or terminated. (Summers v. Superior Court (Wan Fen Tan) 24 Cal.App.5th 138.) Partitions are generally favored by the and may occur by an agreement between the co-owners or by a judgment in an action. Typically, a partition may be made by either a physical division or the sale of the property. Historically, a partition in kind, which is a physical division of the property, was favored. However, in many modern transactions, a partition of the property by sale is preferable since, oftentimes, a division of the property will result in parcels that are not equal to the value of the whole property before the division. (Cummings v. Dessel (2017) 13 Cal.App.5th 589, 597.) Also, a “physical division may be impossible due to zoning regulations or may be highly impractical.” (Butte Creek Island Ranch v. Crim (1982) 136 Cal.App.3d 360, 365.)
In partition actions, there is no change of title but rather a division of what the parties already own. A partition action allows each tenant in common to hold the exact proportional interest he or she had previously. As such, the main purpose of partition is to sever the unity of possession. (Cummings, 13 Cal.App.5th 589.)
What Is the Partition Process?
Generally, a partition action has four stages, which include (1) the filing of the lawsuit, (2) an appraisal of the Property under the Partition of Real Property Act, (3) the determination of the parties’ interests, and appointment of a referee to sell the property, and (4) the division of the proceeds from the sale.
In California partition actions, the court must enter an interlocutory judgment where the court finds that the Plaintiff in a partition action is entitled to a partition. (CCP § 872.720.) The interlocutory judgment “determines the interests of the parties in the property and, unless it is to be later determined, the manner of partition.” (CCP § 872.720.)
What is an example of the Partition Process?
For example, “Nicole” and “Cody” are siblings who inherited property their parents bought as an investment property. The property value increased tremendously in the area where the property was situated. While Cody wants to live in the home, Nicole would rather sell the property and split the proceeds before the market slows down. Cody refused to sell, and they both could not come to an agreement as to what to do with the property. As such, their relationship deteriorated, and both were unable to communicate with each other. While both were trapped in this sticky situation, Nicole found a partition attorney who was able to get the house sold so that both parties could get the best value when the market was at an all-time high. This allowed Nicole to also move on with her life.
How the Underwood Law Firm can help
In any event, if you find yourself in a situation where a partition action is necessary, the Underwood Law Firm has clients in all types of categories of relationships and ownership. As each case is unique, property owners would be well-served to seek experienced counsel familiar with the partition statutes. Please do not hesitate to contact our office.
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