California Code of Civil Procedure 873.820 is the California partition statute that directs the order in which the proceeds of a sale of a property shall be applied. The statute provides that:
The proceeds of sale for any property sold shall be applied in the following order:
(a) Payment of the expenses of sale.
(b) Payment of the other costs of partition in whole or in part or to secure any cost of partition later allowed.
(c) Payment of any liens on the property in their order of priority except liens which under the terms of sale are to remain on the property.
(d) Distribution of the residue among the parties in proportion to their shares as determined by the court.
California Code of Civil Procedure 873.820
This statute applies to both unencumbered and encumbered property. Because partition by a lienholder is no longer a manner of partition, this statute has been updated to remove the previous requirement that liens be paid prior to the lien upon which the owner’s title is based.
It appears that disputes involving payments of liens may be brought to court pending resolution of the dispute.[1]
An extensive treatment of California Code of Civil Procedure Section 873.820(c) as applied to the payment of liens, including liens encumbering only the interests of one co-owner, can be found in Cohen v. Karubian (1969) 276 Cal.App.2d 44, 48. As Miller & Starr explains: “When the court orders a sale, the property can be sold free and clear of all liens and encumbrances. The blanket liens that are a lien on the entire property are satisfied from the sale proceeds in accordance with the proportionate ownership of all the tenants in common. The remaining proceeds are then divided in accordance with their respective interests, and the creditors who have a lien on the interest of only one tenant in common are satisfied from the proceeds due that tenant.” [2]
One court discussed the method of awarding partition offsets, credits, and making adjustments, stating “[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.”[3]
A skilled partition attorney will ensure that the court’s accounting does not suffer from any double counting errors that sometimes occur in partition actions.
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 600 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.
References
| ↑1 | California Code of Civil Procedure 873.810 |
|---|---|
| ↑2 | Right of partition—Partition by a sale of the property, 4 Cal. Real Est. § 11:17 (4th ed.) (citing Lee v. National Collection Agency, Inc. (N.D. Cal. 1982) 543 F.Supp. 920, 922 (“Where a lien exists on just one of the co-tenant’s undivided interest, the property may be sold free and clear of the lien and the lien satisfied from the proceeds of the sale,” citing Wernse v. Dorsey (1935) 2 Cal.2d 513; Balkins v. Norrby (1944) 64 Cal.App.2d 848). |
| ↑3 | Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal. App. 2d 539, 541. |
