My Co-owner Asked for Partition by Sale. Can I Buy Out my Co-owner?

Yes, California Code of Civil Procedure 874.317 is the California partition statute that sets forth the manner in which a co-owner of property can buy out the interests of the other co-owners who requested a sale in a partition action. . The purchase price for the buy out under the Partition of Real Property Act is based on the fair market value of the property.

Co-Owner’s Right to a Buy Out Under the Partition of Real Property Act

The Partition of Real Property Act, effective January 1, 2023 in California, allows a co-owner who did not request a partition by sale to purchase the interest of a party who did request partition by sale. It does so through Section 874.317(a), which explains that the court will “send notice to the parties that any cotenant except a cotenant that requested partition by sale may buy all the interests of the cotenants that requested partition by sale.” Section 874.317(b) explains again that a co-owner “may give notice to the court that it elects to buy all the interests of the cotenants that requested partition by sale.” “‘Partition by sale’ means a court-ordered sale of the entire property, whether by auction, sealed bids, or open-market sale conducted under Section 874.320.”[1]Code Civ. Proc. § 874.312(b).

How Does the Fair Market Value of the Buyout Get Determined?

Within the Partition of Real Property ActCalifornia Code of Civil Procedure 874.316 establishes a protocol for appraising property in partition actions, dictating how courts should assess fair market value, the conditions under which they may accept an agreed valuation by cotenants, and the criteria for appointing an independent appraiser to ensure an impartial valuation process as follows:

(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.

California Code of Civil Procedure 874.316

Purchase Price Calculation for Buying Out Property

Section 874.317(c) explains that the buyout “purchase price for each of the interests of a cotenant that requested partition by sale is the value of the entire parcel determined under Section 874.316 multiplied by the cotenant’s fractional ownership of the entire parcel.”

Section 874.317(d) explains what happens when a co-owner elects to purchase the property at the appraised price. First: “If only one cotenant elects to buy all the interests of the cotenants that requested partition by sale, the court shall notify all the parties of that fact.”[2]California Code of Civil Procedure Section 874.317(d)(1).

Who is Ineligible to Purchase a Property Subject to a Partition by Sale?

Under California Code of Civil Procedure 873.690, only a small group of individuals are prohibited from purchasing property in a partition action. “Only three categories of people are identified as being ineligible to purchase property in a partition sale, namely, a referee appointed by a court to divide or sell the property, a party’s attorney, and a party’s guardian or conservator unless for the party’s benefit.”[3]Cummings v. Dessel (2017) 13 Cal. App. 5th 589, 600. This means that co-owners can buy the property in a partition action.

Talkov Law’s Partition Attorneys Can Help

If you’re looking to end your co-ownership dispute through buying out your co-owner’s interest in the property subject to partition, Talkov Law can help. As California’s foremost experts in partition action, having Talkov Law’s partition attorneys by your side means legal strategies tailored to maximize your benefits. For a free consultation, call (844) 4-TALKOV (825568) or reach out online today.

References

References
1 Code Civ. Proc. § 874.312(b).
2 California Code of Civil Procedure Section 874.317(d)(1).
3 Cummings v. Dessel (2017) 13 Cal. App. 5th 589, 600.
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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