California real estate disputes: Partition in kind vs. partition by sale

April 18, 2013 (Press-News.org) California real estate disputes: Partition in kind vs. partition by sale

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When co-owners of real estate disagree about how to use and maintain their shared property, it sometimes becomes necessary to settle the dispute by requesting that the court sever the co-ownership in a process known as partition. In California, a co-owner of property typically may initiate a partition action at any time.

Partition in kind

One way that the courts may resolve a partition action in California is by ordering a partition in kind. In this type of partition, the land itself is divided up and distributed among the owners, leaving each individual with independent ownership of a fraction of the property.

When California courts order partition in kind, they are required to assign an "equitable portion" of the property to each co-owner. This means that the land must be divided fairly -- but not necessarily equally. For example, if the court partitions a 10-acre piece of land between two co-owners, it will not automatically grant five acres to each individual. This issue often arises when one area of the land is more valuable than the rest -- for instance due to its proximity to a road, shoreline or other feature of the land.

Land may also be partitioned into unequal parts due to the relative ownership shares of each joint owner. For example, if Party A has a 25 percent stake in the land and Party B has a 75 percent stake, Party A will receive a proportionally smaller or less valuable portion of the land than Party B. The court may also take into consideration the relative expenditures made by each co-owner for things such as taxes, repairs, maintenance and improvement of the property.

Partition by sale

When dividing a property by partition in kind is not practical, for instance in the case of a single-family home, the court may order a partition by sale. This involves selling the property and giving each owner a share of the proceeds. As with partition in kind, the proceeds must be divided equitably -- fairly -- among the owners.

Traditionally, the California courts had a strong preference for partition in kind, and would order partition by sale only under very specific circumstances. During the past several decades, however, partition by sale has become more common and is routinely used to sever co-ownership of real estate in California, particularly in urban or developed areas. If one or more co-owners are opposed to the sale of a disputed property, the court may permit them to buy out the shares of the co-owner who has initiated the partition action, thereby preventing a forced sale.

To learn more about the legal options that are available when involved in a dispute over jointly owned property in California, contact an experienced real estate lawyer.