Partition of Property Explained

A co-owner of property can request the courts to conduct a partition sale by which the property is sold and the proceeds divided according to the interests in the property ( Code of Civil Procedure section 872.220.)

A. The Court Will Order That the Properties Be Sold When Partition by Sale Would Be More Equitable than Division of the Property.
Code of Civil Procedure section 872.820 provides:
“. . . the court shall order that the property be sold and the proceeds be divided among the parties in accordance with their interests in the property as determined in the interlocutory judgment in the following situations:
(a) The parties agree to such relief, by their pleadings or otherwise.
(b) The court determines that, under the circumstances, sale and
division of the proceeds would be more equitable than division of the property. For the purpose of making the determination, the court may appoint a referee and take into account his report.”
Whether or not a partition by sale would be more equitable than a partition in kind is a question of fact. (See Mitchell v. Cline (1890) 84 Cal. 409, 418.) There are two types of evidence which will demonstrate that a sale would be more equitable than partition in kind. The first is evidence that the property is so situated that a division into subparcels of equal value cannot be made. The second is economic evidence to the effect that, due to the particular situation of the land, the partition in kind of the land would substantially diminish the value of each party’s interest. (Butte Creek Island Ranch v. Crim (1982) 136 Cal. App. 3d 360, 365–367.) In the instant case, partition by sale of the two PROPERTIES is more equitable than division in kind of the property because each is a condominium which cannot be divided.

B. The Court Should Determine Whether a Public Auction or a Private Sale Would Be More Beneficial to the Parties.
The court may, at the time of trial or thereafter, prescribe such manner, terms, and conditions of sale not inconsistent with the provisions of the statutes governing sale of property in partition actions (Code of Civil Procedure sections 873.510–873.850), as it deems proper for the particular property or sale (Code of Civil Procedure section 873.610). In addition, the court may refer the manner, terms, and conditions of sale to the referee for recommendation. (Code of Civil Procedure section 873.610.)
The property must be sold at public auction or private sale as the court determines will be more beneficial to the parties. For the purposes of making this determination, the court may refer the matter to the referee and take into account the referee’s report (Code of Civil Procedure section 873.520.)

C. After Payment of the Expenses of the Partition by Sale, Costs of Partition, Payment of Liens, and the Reimbursement of Expenses Paid by Party, the Residue Should Be Distributed among the Parties in Accordance with Their Fifty Percent Interests in the Property.

Code of Civil Procedure section 873.820 provides that the proceeds of sale for any property sold must be applied in the following order:
?Payment of the expenses of sale.
?Payment of the other costs of partition in whole or part or to secure any cost of partition later allowed.
?Payment of any liens on the property in their order of priority except liens that under the terms of sale are to remain on the property.
?Distribution of the residue among the parties in proportion to their shares as determined by the court.

1. A Party Is Entitled to Reimbursement of All Advances Made Towards Remodeling the Properties, Utilities, Property Taxes, in Excess of Their Interest in the Property.
In a partition action, a cotenant is entitled to an accounting and compensatory adjustments for expenditures in excess of the cotenant’s fractional share for necessary repairs, improvements that enhance the value of the property, taxes, payments of principal and interest on mortgages and other liens, insurance for the common benefit and protection and preservation of title. (Code of Civil Procedure section 872.140.) Section 872.140 of the Code of Civil Procedure states: "The court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity." Thus, partition actions are governed by broad principles of equity jurisprudence, and what is awarded to a cotenant in any given action depends on the facts and circumstances of the particular case. (Code Civ. Proc. § 872.140; see also Wallace v. Daley (1990) 220 Cal. App. 3d 1028 at 1035.)
The court in Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal. App. 2d 539 discussed the method of awarding credits and making adjustments. The court stated that “[w]hen a cotenant makes advances from his own pocket to preserve the common estate, his investment in the property increases by the entire amount advanced. Upon sale of the estate he is entitled to be reimbursed his entire advancement before the balance is equally divided.” Id. at 541. Therefore, a cotenant will be entitled to a reimbursement for any credits or adjustments before the balance of any proceeds is divided between the two cotenants.
Party states that she has paid an estimated $517,520.00 in expenses associated with the Property (i.e., mortgage, HOA fees, property taxes, repairs/improvements etc.) As a fifty percent owner of the Property, she should receive a fifty percent reimbursement of these advances, i.e., $258,760.00, prior to distribution of the residue of the sale proceeds.

2. Each Party Owns a Fifty Percent Interest in the Property as Tenants in Common.
The court must order that the property be divided among the parties in accordance with their interests in the property as determined in the interlocutory judgment. (Code of Civil Procedure section 872.810.) Recordation is prima facie evidence of execution and delivery. (Evidence Code section 1600.) A duly executed deed is presumed to have been delivered at its date. (Civil Code section 1055.) In the case of an adult donee, a rebuttable presumption of acceptance of a gift deed arises when the conveyance is beneficial. (Herman v. Mortensen (1945) 72 Cal. App. 2d 413, 419–421.) In the instant matter, Party owns fifty percent of the Property and Wilkins owns fifty percent of the Property as tenants in common pursuant to the recordation of a Quit Claim Deed recorded on March 22, 1990 as instrument number 90-561700. Thus, after all the expenses and costs of the sale, liens and reimbursements to Party are paid, the parties should share the residue of the sale proceeds pursuant to their respective fifty percent ownership interests.

David DiJulio 

Attorney At Law

DiJulio Law Group 

818-502-1700