Title Disputes: When One
Party Doesn’t Want to Sell
March 2, 2022
If you co-own a property with others and you want to cash out but the others want to retain the property for other purposes, what are your legal options? What if you inherit property with others and no one can agree on what to do with the property? Are all of you stuck until someone budges, or there’s a sudden meeting of the minds?
It’s not uncommon for disputes over the use and ownership of a property to end up in court. This can be initiated by any owner — who is sometimes referred to as a cotenant, or tenant in common, under California law — by filing a petition for partition. After the petition winds its way through the court process, several results are possible.
First, the co-owners, rather than facing the time and costs of fighting things out in court, may decide on a solution on their own. If this doesn’t happen, and matters proceed to the courtroom, the judge will usually weigh two options — partition in kind or partition by sale. “Kind” means to allocate equal portions of the property to all co-owners. By sale means just that — sell the property and divide the cash equally.
A third option, known as partition by appraisal, which is used less frequently, allows the court to bestow ownership on one individual and order that individual to buy out the rest.
If you’re involved in a dispute with other co-owners in Santa Ana, California, or throughout Southern California, including Orange, Los Angeles, and San Diego counties, contact me immediately at the Martinez Law Office, Inc.
I have more than four decades of experience in real estate law, and I can weigh your options with you and advise you of the best path forward — and then represent you in court, if necessary.
Situations Where Cotenant
Disputes May Arise
In addition to heirs receiving joint ownership of property from a will or trust and then disagreeing on what to do with it, other situations can lead to partition actions as well.
If you and friends or family members purchase land that appears to be in the path of development and then cannot agree on what use to put the land, you may be setting yourselves up for court partition.
Say one party wants to build a warehouse and another a mini-mall and no one budges — this could end up in court. Business owners may also come to loggerheads over co-owned property. One may want to rent out an office building, the others to sell it, or vice versa.
When it comes to heirs who disagree over inherited property, in 2021, California passed the Uniform Partition of Heirs Property Act giving co-owners the option to buy out another cotenant who seeks partition, stating:
“If a cotenant requests partition by sale, the bill would give co-owners who did not request the partition the option to buy all of the interests of the co-owners that requested partition by sale, as specified.”
Divorcing spouses who mutually own property, usually their primary residence but sometimes other properties as well, are governed by California’s community property standards. This means that anything acquired during the marriage is owned equally by both spouses.
In a divorce, one spouse can agree to be bought out by the other, but if they cannot decide, the issue must go through the court system. A partition action would pertain only if there were separately held property involved, usually property purchased by either of the parties before marriage.
The Partition Process
As mentioned above, any co-owner can file a petition for partition for any reason in the county in which the property is located. This is not that simple of a process, and many complex legal terms and issues are involved. Filing a petition should involve the knowledge and experience of a real estate attorney familiar with the process.
Once the complaint is filed, a notice of pendency of action (lis pendens) is registered with the County Recorder’s Office. This notifies anyone interested in the property that a legal action is in process.
Under California Code of Civil Procedure Section 872.210, the court must divide California real estate equitably among its co-owners.
The judge presiding over the petition action basically has three options. He or she can order that there be a partition in kind, which divides the property into pieces of equal value and gives each owner one of the pieces. The judge can also order a partition by sale, with the proceeds to be divided equally among the co-owners. In general, courts tend to favor physical division over sale unless a partition by sale would be “more equitable.”
As a third option, there might be, in rare instances, a partition by appraisal, allowing one owner to buy out the rest. For sale or division, the court will appoint a partition referee to carry out the decision.
Work with an Experienced
Real Estate Attorney
If nothing else, a partition action in court can end a dispute that the co-owners are unable or unwilling to resolve on their own. However, steps should be taken before filing a petition to avert the costs and time requirements of a courtroom battle. Even if a petition has been filed, it’s not too late to resolve matters among yourselves.
Whatever stage your dispute is in, whether a partition is on the table or the disagreement over the jointly owned property is still simmering, you should seek the counsel and guidance of an experienced real estate attorney.
If you co-own a property in Southern California and you and the others can’t agree on its future — whether to retain, develop, or sell it — contact me immediately at the Martinez Law Office, Inc. I proudly serve clients in Orange, Los Angeles, and San Diego counties from my office in Santa Ana.
Let me bring my more than 40 years of real estate experience to bear on your situation, and let’s strive together for the best possible resolution.