California Partition Law Blog
It’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.
As such, some guidance is needed on how this new law works. And the Underwood Law Firm is here to provide just that. Our attorneys specialize in partition actions and are familiar with the text and history of the partition statutes in this state. To comprehend the breadth of this Act, we analyzed every statute and every relevant case from every state that has enacted similar provisions. This is the Complete Guide to the Partition of Real Property Act.
What is the Partition of Real Property Act?
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 where the parties are tenants in common, provided there is no agreement binding all co-owners concerning partitions (99% of the time, there isn’t). (CCP § 874.311.)
But even though the act is particular to California, it is actually derived from the Uniform Partition of Heirs Property Act. This “uniform” statute was drafted by the National Conference of Commissioners on Uniform State Laws. The NCCUSL is basically a non-partisan independent body that drafts “uniform” codes that each state legislature can choose to adopt in whole or in part.
California adopted the Uniform Partition of Heirs Property Act in 2021. But a year later, the legislature repealed it, partly because it felt the Uniform Act’s focus on “heirs property” was too narrow. As such, the Legislature passed the Partition of Real Property Act, which is now in place.
But just because the legislature repealed the Uniform Partition of Heirs Property Act does not mean it holds no significance. When the legislature passed the new version of the bill, it kept substantially all of the text, opting only to eliminate references to heirs property. In its own words, the legislature’s goal was to “expand the scope” of the Uniform Partition of Heirs Property Act by applying its provisions to all co-owned property held in tenancy in common (Stats 2022 Ch. 82 § 3 (AB 2245).)
As such, due in part to the lack of California Courts of Appeal decisions reviewing this relatively new piece of legislation, this guide may reference decisions of other states that have been working with the Partition of Heirs Property Act for some time.
Why did California Pass the Partition of Real Property Act?
To fully answer that question, one needs to first look at why the UPHPA was passed. Again, the Partition of Real Property Act would not exist if not for the passage and adoption of the UPHPA by the California legislature in 2021.
For co-owners of real property in California, Partitions are, and historically have been, a right. It is a mechanism that has literally existed for centuries, because co-owners need to be able to pull their equity out pieces of real property. Of course, the reality is that such equity cannot come out of the property on its own. The property must be sold for the co-owners to receive their share.
It is under this framework that the UPHPA was passed. Put simply, the side effect of allowing co-owners to exit ownership schemes with their equity is that many low-income families, particularly those in African-American communities, lose out on building wealth through property ownership. (Mitchell, Reforming Property Law to Address Devastating Land Loss (2014) 66 Ala. L. Rev. 1, 5.)
As one commentator framed it, “many speculators… over an extended period of time, have acquired very small interests in family-owned, tenancy in common properties and have shortly thereafter filed partition actions requesting courts to order the entire properties forcibly sold.” (Id.)
As such, the UPHPA, with its co-owner buy out provisions and preference for physical partition, sought to solve this problem. The Act “establishes a hierarchy of remedies that… reinforces property rights… [for[ property owners who traditionally have been most at risk of losing their property at a forced partition sale.” (Id. at 6.)
California must have agreed with this sentiment because it passed the full UPHPA in 2021. But, as noted above, the UPHPA applies only to “heirs property” (i.e., inherited property). This makes sense because the primary goal for the NCCUSL was to stem the involuntary loss of family property. (Id. 42.) It was specifically drafted to exempt other kinds of co-owned properties. For instance “first generation” tenancies in common, where none of the co-owners received their interest via inheritance, were intentionally excluded. (Id. at 43.)
For whatever reason, California did not agree with these exclusions. And that is why the state passed the Partition of Real Property Act. It is the UPHPA, but it is not limited to inherited property. Instead, it applies to all jointly-owned property held in tenancy in common (provided there’s not already a partition contract between the parties).
Want to learn more?
Find more of the Complete Guide to the Partition of Real Property Act here:
How the Lawyers at the Underwood Law Firm Can Help
While the courts and lawyers attempt to figure out the operation of the Partition of Real Property Act, litigants may feel stressed at the prospect of undertaking a partition governed by a relatively new law. These situations can be stressful, and difficult, especially when the way out is not entirely clear. Fortunately, the lawyers at the Underwood Law Firm specialize in partition actions and solving difficult co-ownership problems through civil litigation, helping good people end bad real estate partnerships. If you have found yourself in one of these situations, then please do not hesitate to contact us today.