Who Pays for a Partition Action?

A 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. 

Partition in Kind is the process of physically dividing the property into distinct portions that are separately titled. (CCP § 874.312.)

Partition by Sale is the process of selling the entire property and dividing the sale proceeds equitably among co-owners. Property can be sold at auctions, sealed bids, or open-market sale in a partition by sale. (CCP § 874.312.)

Lastly, Partition by Appraisal allows one or more parties to acquire the ownership interests of other parties at the interests appraised value. The partition by appraisal method is used when physically dividing the property is impossible or inequitable, or when sale of the property would either incur unwanted tax liability or force a sale against a co-owner’s wishes. (Cummings v. Dressel (2017) 13 Cal.App.5th 589.) 

Partition is an absolute right of co-owners of real or personal property, but the right may still be modified or waived by contracts. (Thomas v. Witte (1963) 214 Cal.App.2d 322; Schwartz v. Shapiro (1964) 229 Cal.App.2d 238.) Still, partition actions are a favored legal remedy because they largely avoid the inconveniences and tensions arising out of joint property ownership disputes and unreasonable restraints on the property’s use and enjoyment, while facilitating transmission of the co-owned property’s title. (Cummings v. Dressel, supra, at p. 596-97; Leg Investments v. Boxler (2010) 183 Cal.App.4th 484.)

What Costs are Associated with Partitions?

According to California Code of Civil Procedure § 874.010, partition costs include attorney fees, referee fees and expenses, compensation for services of individuals employed by the referee like surveyors, the reasonable costs of a title report, and any other disbursements or expenses the court determines were incurred for the common benefit. (CCP § 874.010.) 

Partition actions can also involve costs incurred for purposes other than the common benefit of co-owners. While these expenses are reviewed during the partition action, courts follow the principles of equity when apportioning them. Thus, unreasonable expenses do not generally influence the cost of partition for both parties. 

Who Pays for a Partition Action?

Generally, courts divide the costs of partition among the parties in proportion to their ownership interests or in a different manner when necessary to ensure equitable distributions. (CCP § 874.040.) This means that partition costs are typically divided based on ownership interests, but the court retains discretion to adjust the cost distribution based on other equitable considerations. (Finney v. Gomez (2003) 111 Cal.App.4th 527.) 

Court’s retain discretion to adjust the allocation of fees for expenses incurred for matters like exacerbating the dispute or purpose beyond common benefit. (Orien v. Lutz (2017) 16 Cal.App.5th 957.) Courts may also adjust fee allocations if they deem the allocation unreasonable. (Ibid.) Thus, while the default rule in California is proportional allocation of costs based on each parties’ ownership interest, courts deviate from this rule when equity demands a different allocation to avoid unfairly burdening parties with costs that were unreasonably incurred by the other party. (Ibid.) 

For example, in Finney v. Gomez the court of appeals reversed an award of 100% of the attorney fees and costs of partition to the landowner because the trial court abused its discretion. (Ibid.) Trial courts are limited in their discretion, meaning they can only award attorney fees and costs based on existing contracts or statute. As such, costs and fees should have been divided proportionally based on the parties’ ownership interests in the property, which evidence proved were equal proportions of ownership interests, meaning both parties should have shared the costs of partition. (Ibid.) 

Ultimately, the cost of partition depends on the complexity of the litigation and the co-owners’ willingness to cooperate. Co-owners generally recover attorney’s fees from the opposing party or from the property’s sale proceeds. And, while it is also possible to recover additional expenses that are proportional or in addition to a party’s ownership interest, the expenses must be properly documented to establish the expense arose out of common benefit. 

What is an Example?

“Shawn” and “Julie” co-own real property in Southern California that they inherited from a family member. The property is an undeveloped parcel of land that Shawn and Julie want to divide into separate sections so that they each have full control over their portion. Julie wants to sell her portion, and Shawn intends to build a home on his portion, so they agree to partition the property by physically dividing the land into two parts. 

Shawn and Julie disagree about who should pay for the partition because Julie thinks Shawn should be responsible for all the costs since he intends to build on the land. Because of their inability to agree, Shawn and Julie hire a surveyor to assess the land and suggest how to divide the property. The surveyor costs $5,000 and because Shawn and Julie agree this is a necessary step, they split the cost equally. 

Shawn and Julie still, however, cannot agree on the division of the remaining costs, so the court considers several factors including Shawn and Julie’s entitlement to equal shares of the property, the benefits of partitioning the property, and Julie’s intention to sell the property. Using these factors the court determines Shawn and Julie will split partition costs equally because partition will equally benefit them and all costs were incurred for the common benefit.  

Conclusion

The Underwood Law Firm has a team of experienced lawyers who can help guide you through your asset management and help you pursue solutions like partition to ensure you recover the entirety of what you are legally entitled to. We are here to help.