Different types of land can bring different challenges in a partition action. Agricultural land is no exception. This is especially true given the diverse agricultural industries throughout California, producing nearly $50 billion in revenue in 2018 alone, shown below:
- Dairy Products, Milk — $10.40 billion
- Grapes — $5.54 billion
- Cattle and Calves — $3.63 billion
- Almonds — $3.52 billion
- Lettuce — $3.15 billion
- Strawberries — $2.68 billion
- Pistachios — $1.86 billion
- Broilers — $1.59 billion
- Tomatoes — $1.46 billion
- Carrots — $1.11 billion
Unique Aspects of Agricultural Partition Actions
Due to the unique nature of farmland and the variation within each parcel, it may not be considered equitable for the property to be physically divided amongst the co-owners in a partition action. Accordingly, a partition by sale of the agricultural land may be the best course of action.
Oftentimes, during the pendency of the partition action involving agricultural land, the most efficient way to protect the property subject to partition is to have a referee appointed under Code of Civil Procedure section 873.010(a) providing that: “The court shall appoint a referee to divide or sell the property as ordered by the court.”
Alternatively, a receiver can be appointed, with Section 564(b)(9) of the California Code of Civil Procedure noting that a receiver may be appointed: “In all … cases where necessary to preserve the property or rights of any party.” A partition action is one of these actions where a receiver may be deemed “necessary to preserve the property.”
It may become necessary for a partition receiver to be appointed in order to manage the property “for the purpose of its preservation and ultimate disposition according to the final judgment therein.” Kreling v. Kreling (1897) 118 Cal. 421, 422.
Williamson Act in a Partition Action
As explained by the California Department of Conservation: “The Williamson Act, also known as the California Land Conservation Act of 1965, enables local governments to enter into contracts with private landowners for the purpose of restricting specific parcels of land to agricultural or related open space use. In return, landowners receive property tax assessments which are much lower than normal because they are based upon farming and open space uses as opposed to full market value.”
The property must be within the Agriculture land use category and meet minimum acreage requirements for eligibility, which vary depending on the productive potential of the soil – more productive soils result in smaller minimum size requirements. In order to meet the minimum size requirement, two or more parcels may be combined if they are contiguous or if they are under the same ownership.
The Williamson Act may present an argument that the co-owned property should not be physically divided as it may lose the reduced property taxed. Or perhaps, the argument is that it cannot be physically divided due to the contract with the count.
How to Prevent a Partition of Farmland
One way that farm owners can involuntarily lose farmland in California is through partition if the farm is owned by multiple co-owners.
Interestingly, one common strategy that can prevent partition of agricultural land is for co-owners to form a Limited Liability Company (LLC) and hold title of the property in the LLC. This concept of using the LLC is to replace the multiple owners of the land with one LLC owning the land means that those co-owners own the LLC rather than the land. Partition rights only apply to real estate, not to business entities. So, instead of multiple people owning the land, multiple people own an LLC that owns the land. Since there are no partition rights with an LLC, no one owner can force the sale of the land via a partition action.
Because many farms are owned by families, avoiding a partition action requires this kind of forethought. Otherwise, California partition law treats a single-family residence that has been owned for a year the same as a 1,000-acre farm that has been in the family five generations.
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 six, full time partition lawyers, Talkov Law is the #1 partition law firm in California and has handled 250 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!