California Code of Civil Procedure 874.225 is the California partition statute that states that someone who is not a party to the partition action is not affected by the judgment so long as certain conditions are satisfied. The statute provides that:
Except to the extent provided in Section 1908, the judgment does not affect a claim in the property or part thereof of any person who was not a party to the action if any of the following conditions is satisfied:
(a) The claim was of record at the time the lis pendens was filed or, if none was filed, at the time the judgment was recorded.
(b) The claim was actually known to the plaintiff or would have been reasonably apparent from an inspection of the property at the time the lis pendens was filed or, if none was filed, at the time the judgment was entered. For the purpose of this subdivision, a “claim in the property or part thereof” of any person means the interest of the person in the portion of the property or proceeds of sale thereof allocated to the plaintiff. Nothing in this subdivision shall be construed to impair the rights of a bona fide purchaser or encumbrancer for value dealing with the plaintiff or the plaintiff’s successors in interest.
California Code of Civil Procedure 874.225
In other words, a judgment will not affect a claim to the property if the claim, such as a mortgage (deed of trust), was recorded before the lis pendens was filed. In other words, failing to name a mortgage holder means that the court lacks jurisdiction over that lien.
Moreover, a judgment will not affect a claim to the property if the claim was known to the plaintiff or if the plaintiff could have discovered the claim by inspecting the property. For example, perhaps someone lives at the property who claims to be an owner, or perhaps there is a contractor on the property expecting payment for their work. Or, perhaps the property is 100 acres in size, with 20 acres being a farm with some third party farming the land. A prudent purchaser would have knocked on the door and spoken with the farmer to confirm that they are merely an employee of the owner, rather than someone who claims they bought the 20 acres years ago but forgot to record the deed. This appears to be akin to constructive notice.
Law Revision Commission Comments to California Code of Civil Procedure § 874.225
In 1984, the California Law Revision Commission explained California Code of Civil Procedure § 874.225 as follows:
Subdivision (a) of Section 874.225 continues the substance of former Section 874.220.
Subdivision (b) continues the substance of former Section 874.230, with clarifications relating to the time of the plaintiff’s knowledge. Subdivision (b) is intended to implement the requirement of Section 872.510 that the plaintiff join all persons “actually known” to the plaintiff or “reasonably apparent from an inspection of the property,” who have or claim interests in the property or estate as to which partition is sought. Subdivision (b) is an exception to the rule stated in Section 874.210(c) that the judgment binds all persons having unrecorded interests in the property. It should be noted that subdivision (b) makes the judgment not conclusive only with respect to the share of the plaintiff. The portions of the property allocated to other parties in case of a division, or the entire property in case of a sale to a bona fide purchaser, are free of the unrecorded interests.
The introductory portion of Section 874.225 makes clear that notwithstanding the provisions of this section, a claimant may be bound by the proceeding if the claim was acquired from a party after commencement of the proceeding and with actual knowledge of the proceeding. Section 1908 (a)(2). [17 Cal.L.Rev.Comm. Reports 947 (1984)].
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