Code of Civil Procedure (CCP) Section 873.690 – Persons Ineligible to Purchase at Sale

Code of Civil Procedure section 873.690 outlines who is not eligible to purchase the property being sold at a partition sale. As one can see, the list is quite small. But, ultimately, this statute is important because it prevents those individuals with the most influence over the parties from stepping in and possibly taking advantage of them. Notably, sales that violate this section are void, not voidable.

Code of Civil Procedure section 873.690 states

1. The following persons shall not purchase property sold in the action directly or indirectly:
   1. The referee.
   2. The attorney of a party.
   3. The guardian of a party, unless for the benefit of his ward.
2. All sales contrary to this section are void except that a sale to a bona fide purchaser following a sale contrary to this section shall not be disturbed.

“Shawn” and “Julie” are an unmarried couple who want to start a life together. They find a nice home in Los Angeles and buy it as joint tenants. They move in and start their new life together.

Unfortunately, Shawn and Julie’s relationship doesn’t work out, and they break up. They cannot agree on what to do with the property. Shawn wants to sell all the property and move on with his life, so he sues for partition by sale.

Eventually, the court orders the property sold and the sale proceeds distributed. The court concludes that the property will be sold at a private sale. The court assigned “Amy” as referee for the sale. As Amy begins marketing the property, she begins to fall in love with it. When she sees that the highest bid on the house is something she can afford, she submits her own bid that winds up being the highest.

Unfortunately for Amy, her attempt to buy the property won’t work. Even if the sale closed, it is void; that is, it’s as if it never happened.

1976 Addition.

Section 873.690 supersedes former Section 783. Because the parties listed in this section may not purchase the property "directly or indirectly," neither they nor persons for their behalf may purchase the property.

Subdivision (a) (3) expands the coverage of former Section 783, which barred the guardian of an infant in the sale of real property, to bar any guardian in the sale of any property. It should be noted that Section 873.690 precludes the listed parties only in partition sales. Sales made to enforce the lien of a referee, attorney, or guardian ad litem imposed under this title are sales in which those persons may be interested and may participate.

As is the case with most of the partition statutes, section 873.690 does not include a an “official” Assembly Committee Comment from the California Legislature. But this is the norm. That’s because the Legislature endorsed an overall adoption of the Law Revision Commission suggestions when it passed the new partition statutes in 1976.

In fact, the introduction to Assembly Bill 1671 (the bill that contained the new partition laws) states that the Revision Commission’s recommendations “reflect the intent of the Assembly Committee… in approving the various provisions of Assembly Bill 1671.” This demonstrates that the intent of the Legislature was essentially in line with that of the Revision Commission.

As to the comment here, it makes mention that section 873.690 supersedes now-repealed section 783. That former statute provided:

“Neither of the referees, nor any person for the benefit of either of them, can be interested in any purchase; nor can a guardian of an infant party be interested in the purchase of any real property, being the subject of the action, except for the benefit of the infant. All sales contrary to the provisions of this section are void.”

As one can see, today’s statute is far more expansive in its prohibitions on who cannot participate in a partition sale. True, “only three categories of people are identified as being ineligible to purchase property in a partition sale.” (Cummings v. Dessel (2017) 13 Cal.App.5th 589, 600.) But at the same time, those categories of people (attorneys, guardians, and the referee) are in the position where they might most be able to take advantage of the parties.

Another key feature of this statute is that a sale contrary to its prohibitions is “void.” Legally speaking, this is distinct on account of its effect. Commonly, the word “void” is associated with and mixed up for the word “voidable.” But the two words are associated with different outcomes.

“The word ‘void,’ in its strictest sense, means that which has no force and effect, is without legal efficacy, is incapable of being enforced by law, or has no legal or binding force.” (Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 12.) “Voidable,” on the other hand, is “that which may be avoided, or declared void; not absolutely void, or void in itself.” (Little v. CFS Service Corp. (1987) 188 Cal.App.3d 1354, 1358.)

What does this really mean? In essence, a voidable transaction is one that the parties may ratify. (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.App.4th 919, 930.) They can look past the defects and allow it to go through. One that is void, on the other hand, means it is totally without legal effect and is absolutely invalid.

Parties should keep this in mind when looking at the purchaser at a partition sale. If an attorney or referee attempts to step in and make the purchase, it will be void, not voidable.

Here at Underwood Law Firm, our knowledgeable attorneys are here to help navigate the complex web of case law and statutes surrounding partitions. If you are thinking of filing a partition, are already in the midst of a partition suit, or just have any questions, please do not hesitate to reach out to our office.