The purpose of this post is to discuss how the proceeds of a partition action are divided between the owners of the property. This post will address the general rule for partition actions, address common instances, and provide some insight for anyone going through the process.
The first thing to know about partition actions is that they are governed by “fairness,” or what is commonly referred to in the law as “equity.” Although the California Code of Civil Procedure contains statutes that govern partition actions, all of a judge’s decisions in the action are supposed to be determined by what is fair. (CCP § 874.040.)
But what is fair? Generally, if a property is jointly owned by two parties and each of them has evenly split all of the costs, then naturally, fairness would dictate that they evenly split the proceeds from the sale. As many of us know, however, life is rarely so neat and clean.
For example, often, one person contributes all of the down payment to a house, but the other person becomes a co-owner. In that situation, whoever contributes a disproportionate share of the downpayment would be entitled to recover their share of the equity plus 50% of that amount from the other joint owner when the proceeds are distributed. (Demetris vs. Demetris (1954) 125 Cal.App.2d 440.)
As another example, one person may pay for all the repairs and taxes to the property. In that instance, fairness would dictate that the party so burdened by the payments should be able to recover half of that amount from the other joint owner. (Rich v. Smith (1915) 26 Cal.App. 775.)
Here’s a trickier one. Can a joint owner who improves the property without the other party’s consent receive credit for the improvement? Courts have found that the one who made improvements for the common benefit should be reimbursed. (Ventre v. Tiscornia (1913) 23 Cal.App. 598.)
Here’s one that’s even trickier. If one tenant takes care of the property and rents it out to a third person, can the person who does no work receive some of the rent? Courts have found that a person who puts no work into managing the property has a right to a proportionate share of rental income. (Goodenow v. Ewer (1860) 16 Cal. 461.)
These are only some of the exceptions to the general rule. The concern for anyone resolving joint ownership problems is ensuring that they receive everything to which they have a right so that they receive fair treatment under the law. As what is fair is not always clear, however, anyone in this situation would benefit by determining the extent of their claims prior to the entry of any final judgment.
If you find yourself in this situation, please contact the lawyers at Underwood Law Firm, P.C., for an initial consultation.
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