Factors Impacting Cost of a Partition Action in California

Legal fees in a partition action are generally smaller than the Realtor fees involved in forcing the sale. However, co-owners are wise to make an educated guess of the cost of attorney’s fees in a partition lawsuit. The cost of the partition hinges on several factors, including the extent of disagreement among co-owners, the monetary value of the issues at stake, and the number of disputes the co-owners engage in.

How Much Does a Partition Cost?

The usual cost for a partition action in California is around $15,000, with the cost for a partition action being higher or lower depending on factors like the defendant’s non-cooperation. This article delves into the variety of complications that contribute to the increased cost of a partition action.

Common Variables Impacting Partition Costs

Certain issues commonly arise in a partition that can make the case more expensive, the cost of addressing these issues will depend on the skill and experience of the partition attorney.

Opposing Party’s Delay Tactics During Partition Are the Primary Source of Legal Fees

While it would be great if an attorney working on an hourly basis could guarantee or provide a cap on legal fees, the truth is that most of the legal fees in a majority of partitions are driven by the obstructionist tactics of the opposing party to avoid a sale or buyout.

In other words, the primary source of the legal fees (usually by a plaintiff) will involve overcoming the delay tactics employed by the opposing party (usually the defendant). This usually involves a defendant who is aware that there are virtually no defenses to partition. Instead, partition defendants may delay the case, particularly when they are in sole possession, meaning they already have what they want while living on their co-owner’s equity.

Note that, sometimes, a partition plaintiff may engage in obstructionist tactics. Perhaps they realize after filing that the partition will not turn out as they had hoped.

A skilled partition attorney will ensure that these tactics have only a limited effect, thereby ending the co-ownership promptly and effectively.

Amount in Dispute

Generally speaking, the cost of litigation is directly related to the amount in dispute. For example, if the parties vary widely on their value of the property for the purposes of a buyout, there will be an added cost if the case involves the Partition of Real Property Act buyout procedures. Or, perhaps one party made the entire down payment, but the other party sees this significant sum as a gift. The more that the parties stand to gain or lose over disputed issues, the more expensive the case may become.

Disputes Over Ownership Interest in Property

Nearly all partitions involve ownership interests that are set forth on the deed. However, sometimes there will be a disagreement as to whether the plaintiff holds equitable title to the property, despite their name being on the deed, known as legal title. In other cases, there are disagreements regarding ownership shares, such as determining whether someone is a 50/50 owner or a 1/3 owner based on an ambiguity in the deed. A skilled partition attorney will calculate the value of these arguments to bring about a resolution that makes sense for all parties.

Fighting Over Offsets (Unequal Payments Towards the Property)

“Every partition action includes a final accounting according to the principles of equity for both charges and credits upon each co-tenant’s interest. Credits include expenditures in excess of the co-tenant’s fractional share for necessary repairs, improvements that enhance the value of the property, taxes, payments of principal and interest on mortgages, and other liens, insurance for the common benefit, and protection and preservation of title.” [1]Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1035–36 (citing California Code of Civil Procedure § 872.140)

Offsets commonly include unequal payments for the down payment, mortgage, taxes, insurance, improvements, repairs, and collection of rent. Cases that involve a simple split among the parties according to their ownership interests, e.g., 50/50, are less expensive than those where there is a disagreement over offsets. Proper documentation from the client on the fact of those expenditures can reduce the cost of litigating this topic.

Unusual Properties May Take Longer to Sell

Most partitions involve a single-family home in a populated area where homes are sold in a matter of weeks or months at fair market value. However, some properties may not sell as quickly as others, prolonging the partition process and resulting in additional expenses such as maintenance, taxes, and legal fees during the waiting period. Monitoring the file during the sale process will likely add only minimal expense, but does nonetheless increase the cost of the partition.

Overlapping Issues Between the Co-Owners

Some co-owners have other relationships, such as managing the business of the other co-owner, being the property manager of the co-owned property, acting as trustee of the co-owner’s trust, or perhaps owing an unclear amount of money to their co-owner. These complications sometimes increase the cost of litigation, often times simply because the defendant sees this as a way to slow down the partition action for a perceived litigation benefit.

Unskilled Opposing Counsel can Increase the Cost

While clients and choose a skilled partition attorney, much of the cost may be driven by the selection of an attorney by their opposing party. For example, if a defendant hires an attorney who has done few, if any, partition actions, that attorney may inadvertently create complications. The opposing attorney may believe that those complications will create value for their client. Indeed, the opposing attorney may have had success using those tactics when opposing an equally unskilled attorneys handling a partition action. However, when faced with experienced partition lawyers, the opposing counsel may find that those tactics did nothing but raise the cost for both sides. Our partition attorneys are skilled at cutting off tactics employed by inexperienced partition lawyers, thereby decreasing the impact of this factor.

Complications Related to Business Issues

When a property is jointly owned as part of a business venture, related issues can complicate partition proceedings. Sometimes, the co-owners are also co-owners of a business that operates at the property, thereby complicating who is owed what from a sale.

Another scenario is where siblings jointly own a property that also serves as the headquarters for their family-owned business. One sibling, who holds a higher position within the company and has more influence over business decisions, may leverage this power to assert control over the property partition process. They might argue that dividing the property would disrupt the business operations, thereby delaying the partition proceedings and driving up associated costs.

Nonetheless, the absolute right of partition in California applies equally to business properties.

Client-Caused Complications May Increase Cost of Partition

Sometimes, the client can, perhaps unknowingly, drive up the costs and complexities of partition actions due to the emotional decisions involved or otherwise.

Client Persistence on Understanding All Permutations of Partition Outcome

Around 98% Talkov Law’s partition cases settle before trial, often long before trial. Of those that go to trial, many settle before a verdict is reached. The odds that you will be dragged into court are low because most partition cases are decided on motions, meaning the parties are not required to go to court in a partition. The goal is to resolve disputes efficiently and cost-effectively.

Despite this rare trial in a partition, some partition clients insist on exploring every possible permutation of what can happen. This level of precision may increase the cost of the partition with little added benefit. It is important for partition litigants to listen to their attorneys when advised as to what is likely to matter, and what is likely to be irrelevant.

Challenges During Negotiation

Excessive negotiations, whether initiated by clients or opposing counsel, can significantly inflate the costs associated with partitions. Compromise is often necessary, but prolonged negotiation processes can drive up legal fees. For most clients, a reasonable settlement is better than a judgment in their favor by the court.

A skilled partition attorney will help the client through the stresses of litigation while still making rational decisions.

Increased Client Expectations May Lead to Increased Legal Fees

Perhaps the most fundamental factor in the cost of illegal fees will be the expectation of the client.

For example, if a client owns a 50% interest in the property, but is willing to take 25% of the equity in a buyout or sale, the legal fees to accomplish this goal will almost certainly be lower than obtaining a 50/50 split.

However, if a client owns a 50% interest in the property, but insists on receiving 50% of the equity plus the return of the down payment made entirely by the client in a buyout or sale, the legal fees to accomplish this goal will be higher than obtaining a 50/50 split.

The permutations are too many to explain in a blog post. However, the general theme is obvious that the more the client is demanding in an outcome of a partition, the higher the legal fees will be.

Talkov Law’s Partition Attorneys Can Help

While partition actions can be resolved in a matter of months for a reasonable cost, some cases have factors that increase the legal fees and may increase the time for resolution. 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. This experience guides our ability to estimate the complexity of a case.

Contact California’s #1 team for partition action, Talkov Law, where partition attorneys strive to provide equitable and cost-effective representation in partitions by understanding the unique dynamics of each case, providing seasoned expertise in the practice of partitions, and prioritizing the interests and rights of the clients above all. For most cases, legal fees are paid entirely at the end, meaning there is no retainer. For a free consultation, call (844) 4-TALKOV (825568) or reach out online today.

References

References
1 Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1035–36 (citing California Code of Civil Procedure § 872.140)
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