California law allows the party filing a partition action to request that the court award their attorney’s fees and costs from the other co-owners. Attorneys fees are most likely to be granted against an uncooperative defendant. These fees are generally paid from the proceeds of sale of the property.
In fact, the recovery is not limited only to attorney’s fees, but also includes filing and court fees, fees associated with fixing up the property in preparation for sale, referee fees, and broker/Realtor commissions.
What is the Rule on Who Pays for a Partition Action?
The rule on who pays for a partition action is that “the court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable.” Code of Civil Procedure 874.040. In turn, the “costs of partition include…reasonable attorney’s fees incurred or paid by a party for the common benefit.” Code of Civil Procedure 874.010(a).
“Section 874.040 has been consistently interpreted as giving courts only two options in apportioning the costs and fees of a partition action. The court may apportion the fees and costs based on the parties’ respective interests in the property, or it may apportion the costs and fees based on some other equitable apportionment.” Finney v. Gomez (2003) 111 Cal.App.4th 527, 545.
Costs of Partition are Generally Allocated According to Ownership Interest
Generally, “the court shall apportion” attorney’s fees and other costs of partition “in proportion to their interests….” Code of Civil Procedure 874.040; see Code of Civil Procedure 874.010(a). This means that a 50/50 owner would normally be able to recover 50% of the costs of the partition, which include attorney’s fees.
Example of When 50/50 Owners Often Do Not Seek to Recovery Costs of Partition
In practice, each side would be able to collect 50% of their fees against the other co-owner, meaning many partition cases would be a wash resulting in no net recovery of legal fees to either side. For example, imagine if Bob files a partition against Sally. Each side incurs $20,000 of legal fees, and let’s suppose all of the fees are deemed for the common benefit. What might occur is that Bob could obtain an award of $10,000 of his fees to be paid from Sally’s share, while Sally could obtain an award that $10,000 of her fees are paid from Bob’s share.
The net effect in this example is that neither side collected any costs of partition from their co-owner. In practice, it would be unwise for either of these co-owners to file a motion for fees since the motion itself would cost money, the motion would likely extend the time for completion of the case, the motion would be a headache for both parties, and would produce no net benefit to either party. As such, many co-owners in this scenario simply accept a walk away on costs of partition, i.e., a settlement or judgment where there is no allocation of fees or other costs of partition to either party.
However, the Court Can Allocate the Costs of a Partition Entirely to One Party
Allocation of the costs of partition are more commonly seen in the extraordinary cases, notably those where there is a co-owner who is wrongfully exacerbating legal fees, usually for the purpose of delaying the partition, and/or when one co-owner only holds a small percentage interest but has incurred fees in a greater proportion, sometimes by acting as the plaintiff to prosecute the partition.
“Sections 874.010 and 874.040 provide numerous avenues for trial courts to adjust the allocation of costs [of partition].” Orien v. Lutz (2017) 16 Cal.App.5th 957, 968.
The law also allows the court to “make such other apportionment [of the costs of partition] as may be equitable.” Code of Civil Procedure 874.040. “The Law Revision Commission comments to section 874.040 offer the only guidance as to what constitutes ‘other apportionment[s] as may be equitable.’ The Comment states: ‘Although normally the costs of partition are apportioned in proportion to the interests of the parties, there may be cases in which some other arrangement will be equitable. Where litigation for the common benefit arises among only some of the parties, or where the interest of the parties in all items, lots, or parcels of property are not identical, the court may segregate the costs of partition to the extent practicable and apportion a part among particular parties only.'” Finney v. Gomez (2003) 111 Cal.App.4th 527, 545–546.
Moreover, even when costs of partition are requested, the fees must be “for the common benefit.” Code Civ. Proc. § 874.010(a).
Most Cases Settle With Each Side Paying their Own Costs of Partition
Attorneys might give you the false hope that your partition will be free by citing the laws on reallocation of attorney’s fees in a partition. The problem is that this reallocation only occurs in a small number of heavily litigated cases.
What many attorneys won’t tell you, perhaps because they are unaware, is that most partitions end in a settlement. Those settlements either involve one party, usually the defendant, buying out the other party’s interest in the property, or the property being listed for sale.
Parties are generally hesitant to pay the legal fees of the other side in a settlement, seeing this as an admission of wrongdoing. Rather, most settlements will involve each side paying their own costs of the partition.
Accordingly, parties should prepare for this likely result by keeping their costs of partition as low as may be appropriate under the circumstances. This means selecting an attorney who will efficiently litigate your partition action.
Takeaway: Keep the Costs of Partition Low to Ensure You Win the Partition
There’s nothing worse than a hollow victory where one party is declared the winner, but their legal fees take away the benefit. At Talkov Law, we focus on developing efficient solutions to partition actions. To that end, we have developed strategies and tactics that will help to reduce the attorney’s fees and costs of a partition action.
Since many partitions result in a settlement, and most settlements involve a walk-away on the cost of a partition whereby each side pays their own fees and costs, it is important to select an attorney who handles only partition law to make your net recovery from the sale of the property as high as possible.
Talkov Law's Partition Attorneys Can Help
If you want to end your co-ownership relationship, but your co-owner won’t agree, a partition action is your only option. With twelve, full time partition lawyers, Talkov Law is the #1 partition law firm in California and has handled over 550 partition actions throughout California. Every case has resulted in a sale to either a third party or one of the co-owners. Not a single court has denied our clients the right to partition or declared our client to be a non-owner. Plus, for qualified cases, there is no fee until we settle or win your case!
If you're looking to end your co-ownership dispute, contact California's premier partition action law firm by calling Talkov Law at (877) PARTITION (727-8484) or sending us a message today.
