Code of Civil Procedure 874.316 CCP – Determination of fair market value; notice (Partition of Real Property Act)

California Code of Civil Procedure 874.316 is the California partition statute that sets forth the manner in which the fair market value of the property. In conjunction with a co-owner buyout of interests under Code of Civil Procedure 874.317, these statutes form the essence of the Partition of Real Property Act.

Talkov Law has developed cutting edge strategies using this new law to ensure that our clients put a prompt and favorable termination to partition actions.

California Code of Civil Procedure 874.316 sets forth that:

(a) Except as otherwise provided in subdivisions (b) and (c), the court shall determine the fair market value of the property by ordering an appraisal pursuant to subdivision (d).

(b) If all cotenants have agreed to the value of the property or to another method of valuation, the court shall adopt that value or the value produced by the agreed method of valuation.

(c) If the court determines that the evidentiary value of an appraisal is outweighed by the cost of the appraisal, the court, after an evidentiary hearing, shall determine the fair market value of the property and send notice to the parties of the value.

(d) If the court orders an appraisal, the court shall appoint a disinterested real estate appraiser licensed in the State of California to determine the fair market value of the property assuming sole ownership of the fee simple estate. On completion of the appraisal, the appraiser shall file a sworn or verified appraisal with the court.

(e) If an appraisal is conducted pursuant to subdivision (d), not later than 10 days after the appraisal is filed, the court shall send notice to each party with a known address, stating all of the following:

(1) The appraised fair market value of the property.

(2) That the appraisal is available at the court clerk’s office.

(3) That a party may file with the court an objection to the appraisal not later than 30 days after the notice is sent, stating the grounds for the objection.

(f) If an appraisal is filed with the court pursuant to subdivision (d), the court shall conduct a hearing to determine the fair market value of the property not sooner than 30 days after a copy of the notice of the appraisal is sent to each party under subdivision (e), whether or not an objection to the appraisal is filed under paragraph (3) of subdivision (e). In addition to the court-ordered appraisal, the court may consider any other evidence of value offered by a party.

(g) After a hearing under subdivision (f), but before considering the merits of the partition action, the court shall determine the fair market value of the property and send notice to the parties of the value.

California Code of Civil Procedure Section 874.316

Partition of Real Property Act

Court Ordered Appraisal of Partitioned Property

The essence of Section 874.316(a) is that “the court shall determine the fair market value of the property by ordering an appraisal” of the co-owned property. The use of the mandatory word “shall” means that the court has no discretion not to order the appraisal.

Court Required to Adopt Value or Valuation Method Agreed by the Co-Owners

Section 874.316(b) requires the court to adopt any agreed value or the value produced by the agreed method of valuation.

Exception: If the Appraisal Would be of Low Evidentiary Value

Section 874.316(c) does allow the court to decline an appraisal only if the evidentiary value of an appraisal is outweighed by the cost of the appraisal. In such a scenario, the court shall hold an evidentiary hearing after which it determines the fair market value of the property. When this value is determined, it would send notice to the parties of the value. Seemingly, this lack of evidentiary value of an appraisal would arise when the values determined by the co-owners are either extremely close, or if the expected outcome of an appraisal would simply engender further debate because the property is very hard to value. This latter scenario might occur if a business is being run on the property or in the case vacant land, which is notoriously hard to value.

Court Appointed Appraiser Must be “Disinterested”

Section 874.316(d) requires that, if the court orders an appraisal, the court may only appoint a “disinterested real estate appraiser.” This should help to engender trust among co-owners of property upon being confident that the appraiser is not a friend, relative or business associate of any co-owner. This appraisal allows for a fair co-owner buyout of interests as described in Section 874.317.

Notice to Co-Owners of Appraised Value

Section 874.316(e) sets forth the requirements of notice of the appraised value to co-owners, notably that notice is to be given by the court 10 days after the appraisal is filed. The notice must state all of the following: “(1) The appraised fair market value of the property. (2) That the appraisal is available at the court clerk’s office. (3) That a party may file with the court an objection to the appraisal not later than 30 days after the notice is sent, stating the grounds for the objection.”

Hearing on Appraisal

Section 874.316(f) provides that the court shall conduct a hearing to determine the fair market value of the property after more than 30 days after a copy of the notice of the appraisal has been sent to each party regardless of whether or not an objection to the appraisal is filed. At the hearing, the court may consider both the appraisal and any other evidence of value offered by a party.

Determination of Fair Market Value

Section 874.316(g) sets forth that, after the court holds the hearing on the appraisal, the court will make a determination of the fair market value of the property and send notice to the parties of the value.

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.

About Scott Talkov

Scott Talkov is a partition lawyer in California. He founded Talkov Law Corp. after more than one decade of experience at a California real estate litigation firm, where he served as one of the firm's partners. He has been featured on ABC 7, CNN, KCBS, and KCAL-9, and in the Los Angeles Times, the Orange County Register, the San Diego Union-Tribune, the Press-Enterprise, and in Los Angeles Lawyer Magazine. Scott has been named a Super Lawyers Rising Star for 9 consecutive years. He can be reached about new matters at info@talkovlaw.com or (844) 4-TALKOV (825568). He can also be contacted directly at scott@talkovlaw.com.

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