Articles Tagged with Partition Law

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-guide-necessary-parties-partition-action-300x300The purpose of this blog post is to discuss who must be named in a partition lawsuit. It is important to name all the necessary parties so that the Court can properly issue a judgment at the conclusion of the partition action. As partition lawsuits involve rights to property, it is pretty obvious that the owners of the property and the mortgage broker should be joined. But the question becomes more difficult as the interests become less connected, like easement holders or other persons who have liens against the individual owners. As such, this article aims to provide clarity on the process. 

What Does the Law Say?

Under Code of Civil Procedure section 872.510, the plaintiff must join as defendants all persons having or claiming interests in the estate, persons who are actually known to the plaintiff to have such interests, or persons who, from an inspection of the property, appear to have such interests. Sections 872.510 to 872.550 define “interest,” as situations, includes liens, and a “lien” means a mortgage, deed of trust, or other security interest in property whether arising from contract, statute, common law, or equity. According to the Legislative Committee Comment, under Section 872.510, only persons having interests in the estate or estates as to which partition is sought need to be joined. 

underwood-distributions-proceeds-partition-action-300x300Before the owners receive the proceeds from a partition sale, costs and expenses related to the partition action must be paid. Code of Civil Procedure section 873.820 sets forth the order that these expenses and costs must paid before the owners receive their proportional interest in the remaining proceeds. Specifically, it states that the proceeds must be distributed in this order:

  1. Payment of the expenses related to the sale
  2. Payment of the costs arising out of the partition

underwood-jogani-v-jogani-joint-ownership-300x300Recently, a jury in the Los Angeles Superior Court awarded what may become one of the largest judgments in a real estate case that has ever been issued. Significantly, in addition to a damage award in the billions, the Court also found that the family members were also co-owners in 17,000 apartments across California. As a result, this consequential decision should be better understood for its potential implications for all co-ownership situations. 

Background

This saga started in the late 1970s. The Jogani family, natives of Gujarat, India, built a fortune in the global diamond trade with offices in Europe, Africa, the Middle East, and North America. 

underwood-partition-actions-personal-representative-300x300Often times, a person’s estate includes property. While property disputes between co-owners are complicated enough, a property dispute including the estate of a deceased person adds an entirely different layer of complexity to the situation. In these instances, there are special laws that apply to help to clarify the process.  

This article will discuss who may bring a partition action on behalf of a deceased person, and address some of the complexities of that process. These complexities arise because of something known as “venue,” or the specific rules relating to the right place or forum to resolve the dispute. In other words, a debate about where to have the debate. Hopefully, this article will clarify that process to simplify what is already an emotionally difficult situation. 

Who can sue on behalf of a deceased person

underwood-law-com-recognizes-partition-firm-300x300Underwood Law Firm is a finalist for the California Legal Awards’ Vanguard Award.

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underwood-partition-real-property-guide-part-4-300x300This is a continuation of our ongoing series on the Complete Guide to the Partition of Real Property Act. For complete comprehension, we would suggest starting from the beginning. 

As a quick summary, the Partition of Real Property Act is a law specific to California, passed in July 2022. (Stats 2022 Ch. 82 § 3 (AB 2245).) It brought significant changes to how partitions are conducted in the state, if the underlying parties are tenants in common. But even though the act is particular to California, it is actually derived from the Uniform Partition of Heirs Property Act (“UPHPA”). 

Because of the similarity between the laws, and in order to deliver the most comprehensive understanding of the Partition of Real Property Act, this guide references law review notes, statutes, and appellate decisions from other states interpreting the UPHPA. 

underwood-partition-real-property-guide-part-3-300x300How does the court appraise the property (CCP § 874.316)?

As was noted previously, the court shall order an appraisal of the property once it determines that the parties are entitled to partition. (CCP § 874.316.) But how does that appraisal process work?

Once the court orders the appraisal, it needs to appoint a disinterested and licensed appraiser to value the property as if only one person owned it. This is because properties with multiple ownership interests typically sell for less. Once the appraisal is complete, the appraiser must file it with the court. After this is done, the court must conduct a hearing to determine the property’s fair market value 30 days after notice of the appraisal is sent to each party. (CCP § 874.316 (f).) 

underwood-partition-real-property-guide-part-1-300x300It’s rare that a new law comes along that turns an entire established legal practice on its head. Yet that’s precisely what California’s Partition of Real Property Act intends to do. Revised in 1976, California’s partition laws remained unchanged and untouched for almost fifty years. 

In 2021 and 2022, however, the California Legislature passed the Partition of Heirs Property Act, then revised it into the California Partition of Real Property Act. The new statutes in this bill provide a new procedural process for how partitions are conducted in the state, provided the subject property qualifies for its provisions. 

While the passage of a new law within a particular legal field is always exciting, it also has its downsides. The Partition of Real Property Act is currently in effect and will continue to apply to specific partition actions filed from this point forward. However, because the law only became active in January of 2023, appellate courts have yet to take a crack at its provisions to aid attorneys and litigants in how they should be interpreted. 

underwood-does-partition-count-bankruptcy-claim-300x300Yes, it can. Partitions and bankruptcy can interact in unusual ways despite the fact that they can often seek the same thing: the sale of a piece of property. 

Nonetheless, a co-owner of property filing for bankruptcy either before or during a partition lawsuit immediately raises several issues for the other innocent co-owners. For example, they’ll need to decide whether they can file a bankruptcy claim, and they’ll also need to figure out whether their partition action is subject to the automatic stay provisions of bankruptcy.

As such, in these situations, the right representation can make all the difference. At Underwood Law Firm, our attorneys know the ins and outs of partition actions, and are ready to handle the accompanying litigation that’s sure to result, even in bankruptcy courts. 

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