The Legal Process of Partitioning Property: Step-by-Step Guide

In California, the legal process of partitioning property is the process through which co-owners of real property divide the co-owned property, either physically or by sale. Typically, partitions occurs when co-owners disagree on how to manage or use the property. The legal process of partitioning property involves several complex steps. This blog post aims to provide a step-by-step guide by breaking the process down into five main steps. 

Step 1: Commencing the Partition Action

Partition is an absolute right, meaning, any co-owner of property can initiate a partition action, including owners of inherited estates or life estates. (Formosa Corp. v. Rogers (1951) 108 Cal.App.2d 397; Code Civ. Proc., § 872.210.) 

To officially commence the action, the party seeking to partition the property must file a complaint in the appropriate court. Complaints must include a description of the property to be partitioned, the interests of all involved parties, and a request for the court to partition the property. (Code Civ. Proc., § 872.210.) 

Step 2: Interlocutory Judgments

Interlocutory judgments are temporary judgments ordered before the end of trial, during the case’s litigation. The court will issue an interlocutory judgment if it finds that the plaintiff is entitled to partition. Interlocutory judgments determine the parties’ interests and order the property’s partition. (Code Civ. Proc., § 872.720.) As such, applicant co-owners must establish their right to partition, 

Now, the plaintiff must properly give notice. The Partition of Real Property Act allows various forms of service. For example, party’s seeking an order of notice by publication must post a conspicuous sign on the property within 10 days of the court’s determination. This posting must state that a partition action has commenced, and provide the court’s name and address, as well as the property’s common designation. (Code Civ. Proc., § 874.314.) 

Plaintiffs may also file a notice of pendency action, called a lis pendens, to provide public notice that the property is now subject to a partition action. (Code Civ. Proc., § 872.210.) 

Step 3: Appointing a Partition Referee

Generally, courts appoint partition referees after they have issued an interlocutory judgment granting the partition. Partition referees are neutral, court-appointed, third parties who are accountable to the court in overseeing and facilitating the partition process. (Code Civ. Proc., § 873.510.) In some cases, parties may nominate a partition referee if all parties agree with the nomination. (Code Civ. Proc., § 873.040.) Courts, however, retain discretion to appoint referees, meaning courts may refuse to appoint the parties’ nomination. Courts may even refuse to appoint a referee entirely if they believe the partition action is too simple, such as the property’s partition is undisputed. 

Once appointed, referees must complete, and file with the court, a report describing the property and their recommendations for its partition. (Code Civ. Proc., § 873.280.) In fulfilling their role, referees “…may perform any acts necessary to exercise the authority conferred” to them by court or California law upon appointment. (Code Civ. Proc., § 873.060.) 

Step 4: Electing the Method of Partition

Courts may determine the method of partition during the interlocutory judgment stage, or a later time in proceedings. Typically, courts determine the method of partition after the referee has filed their report. 

Courts most often order one of three kinds of partition: (1) Partitions in Kind; (2) Partitions by Sale; or (3) Partition by Appraisal. Ultimately, the method of partition chosen depends on what method is more equitable to all involved parties. 

A Partition in Kind is the process of physically dividing property among co-owners. In kind partitions are the process favored by law, as they avoid forcing co-owners to sell property against their will. Courts determine whether a partition in kind is equitable by considering whether the partition is practical and whether physically dividing the property would result in a substantial decrease of the property’s fair market value. (Code Civ. Proc., § 874.319; Williams v. Wells Fargo Bank & Union Trust Co., (1943) 56 Cal.App.2s 645.) Courts will additionally consider other relevant factors to determine whether partition in kind would inflict great prejudice. These factors include any co-owner’s sentimental attachment, the current lawful use of the land, the extent of each co-owner’s contributions to property expenses, and any evidence of the co-owners’ collective ownership duration. (Ibid.) Ultimately, the co-owner seeking the sale bears the burden of proving partition in kind would inflict great prejudice on the parties. (Sting v. Beckham, (1949) 94 Cal.App.2d 823.) 

Partition by Sale results in the property being sold, and the sale proceeds being divided equitably among co-owners, to avoid inflicting great prejudice on the parties. (Cummings v. Dessel, (2017) 13 Cal.App.5th 589; Code Civ. Proc., § 872.820.)

Before ordering a sale, courts may allow co-owners to buy-out the interests of those co-owners seeking partition by sale. (Code Civ. Proc., § 874.820.) This buy-out option is called Partition by Appraisal. Partition by Appraisal is used when physical division is inequitable or otherwise impossible, and sale would result in the unwanted loss of property or tax liability. (Cummings v. Dessel, (2017) 13 Cal.App.5th 589.) This process requires courts to order an appraisal that establishes the property’s fair market value, before presenting parties with the buy-out option. (Code Civ. Proc., §§ 874.316; 874.317.) Co-owners can object to the appraiser’s valuation and offer additional evidence they believe is more indicative of the property’s actual value. (Code Civ. Proc., § 874.316.) 

Step 5: Final Judgment and Accountings

Courts order a final judgment of partition to officially partition the subject property in the manner determined to be the most equitable under the circumstances. In this step, the final judgment specifies the manner of partition and any necessary accounting measures. 

An accounting ensures that the partition is just and results in each co-owner receiving the proportional value to their ownership interests. In partitions by sale, an accounting must occur after the property is sold, and ensures the proceeds are split according to each co-owner’s expenses, meaning it accounts for any additional contributions one co-owner may have made over the other. (Code Civ. Proc., § 874.318.) 

What is an Example?

“Shawn” and “Julie” are siblings who inherited their childhood home in California when their parents died. Julie is emotionally attached to the home and wants to keep the property as an Airbnb and vacation home. Shawn, however, refuses, and seeing the home as nothing but a massive expense, wants to sell. 

Refusing to compromise with Julie, Shawn files for partition by sale in their local California Court. The court grants Shawn’s petition because the siblings disagree, and the property cannot be fairly divided into two usable parts. As a result, a court-appointed referee lists the property for sale and accepts the highest bid. Then, the property is sold, and the court approves the sale and each party’s final accounting before dividing the sale proceeds accordingly. Once the sale proceeds are divided equally between Shawn and Julie, the partition action ends, as their dispute is now resolved. 

Conclusion

Although the right to partition in an absolute right of every co-owner, navigating a partition is often a complex, tiresome, and lengthy process. If sale or disposal of property is a point of contention, partition may be a solution. At Underwood Law, our partition attorneys can help you navigate your partition action efficiently and with care. We are here to help.