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Code of Civil Procedure 873.770 CCP – Taking Setoff from Party Purchaser (Partition Actions)

California Code of Civil Procedure 873.770 is the California partition statute that explains how the partition referee will distribute proceeds of sale when the purchaser is also a party entitled to some of the proceeds of sale, i.e., when credit bidding may be available. The statute provides that:

Where the purchaser is a party or lienholder entitled to a share of the proceeds of sale, the referee may:
(a) Take the purchaser’s receipt for so much of the proceeds of sale as belongs to the purchaser.
(b) Take security, or other arrangement satisfactory to the referee, for payment of amounts which are or may become due from the purchaser on account of the expenses of sale, general costs of the action, and costs of the reference.

Code of Civil Procedure 873.770 CCP

In other words, this statute suggests that credit bidding a co-owner’s equity in a partition by sale may be possible to buy out a co-owner. However, the issue becomes whether there is a determination at the time of the partition sale of the amount that will be paid to the purchasing co-owner.

A similar provision exists under the Partition of Real Property Act, providing that: “If a purchaser is entitled to a share of the proceeds of the sale, the purchaser is entitled to a credit against the price in an amount equal to the purchaser’s share of the proceeds.”  Code of Civil Procedure 874.320(f).

Law Revision Commission Comments to California Code of Civil Procedure § 873.770

In 1976, the California Law Revision Commission explained California Code of Civil Procedure § 873.770 as follows:

Section 873.770 continues the substance of former Section 786 with the addition of subdivision (b), which provides for assurances of payment of a share of the costs which may not be determined at the time of sale.

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 seven, full time partition lawyers, Talkov Law is the #1 partition law firm in California and has handled over 300 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 (844) 4-TALKOV (825568) or sending us a message today.

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