To Divide a Co-Owned Property, a Partition Action Is Required

Gary and Stephanie’s mother died and left them the family home, a modest ranch-style house on nearly an acre in a California suburb. The home needed work, but the property also contained a newer 2-story building with a shop space below and small apartment upstairs. The siblings decided to fix up the house and sell within two years and share the proceeds.

A handy fellow, Gary moved into the apartment and began working on repairs to the house.  Within  a few months he saw new potential for the property. When upgrades were complete on the house, he suggested to Stephanie they should rent it out. Gary liked the small apartment and the shop space below – a perfect spot to live and pursue his woodworking hobby. He and Stephanie could split the rental income, and sit back as the property earned equity.

It sounded great to Gary, but not to Stephanie, who wanted to pay down debt and help her twin daughters with looming college tuition.  Stephanie felt bullied into a real estate deal she did not need. She argued with Gary and they stopped speaking. The stage was set for a resolution called a partition action.

What is a Partition Action?

A partition action is a lawsuit that forces the sale of ownership. In California, anyone who wants to dissolve ownership of property that is jointly owned with another person or persons has a legal right to sell his/her interest. To make the division and sale possible, the partition action is required.

Whether the co-ownership concerns a building, home, farm—anything attached to real property—it can be divided and sold.

What is an “Heirs’ Property” Partition?

If heirs can’t agree on use of inherited property, California law now permits heirs like Gary to buy out their 50% share at a price reflecting true market value. So, if the property is appraised at $1 million, Gary may purchase Stephanie’s share for $500,000 – the same amount Stephanie would gain if the entire property was sold. Having the option does not mean having the money – if Gary cannot afford to buy Stephanie out, these two could be headed for a partition action.

This is a common source of dispute leading to partition actions. Sometimes wills do not specify solutions if inheritors cannot agree on what to do with a property. Or, wills may specify a property cannot be divided, even if it’s possible.  In Gary and Stephanie’s situation, for example, city codes or HOAs  might prevent dividing the property into two separate tax lots allowing Stephanie to sell her “share.” Some properties may have usage restrictions preventing future development of a property.

Other Partition Action Scenarios

There are occasions when an individual owns a small share of a property – such as in a “tenant in common” agreement. Partition actions can occur if a tenant in common dies – beneficiaries can pursue forcing the sale of the property under California law. Partition actions may also arise in co-ownership deals such as vacation properties owned by multiple households, and commercial properties with similar ownership shares.

Should You seek Legal Advice for a Partition Actions?

Issues with trusts and probate can cloud jointly-owned property disputes and keep heirs in limbo for months.  Ideally, individuals involved in property disputes would work things out amicably prior to legal action, which can become expensive. The outcomes of partition actions will be most favorable if you seek legal help from an experienced real estate attorney early in a dispute process.

Know Your Rights. Protect Yourself.