How Does Partition by Appraisal Work in California law?
A partition action in California is a court-ordered process to bring an end to co-ownership disputes by dividing real estate equitably among co-owners. California law allows for three manners of partition: partition by sale, partition in kind, and partition by appraisal. While partition by sale is by far the most common manner of partition, California partition statutes allows for the rarely-used method of partition by appraisal. A partition by appraisal is described as “An alternative to a division or sale of the property . . . under which one or more parties acquires the interests of the others at their appraised value.” Partition by Appraisal., (2021) 12 Witkin, Summary 11th Real Prop § 81
The text of California Code of Civil Procedure 873.910 provides that: “When the interests of all parties are undisputed or have been adjudicated, the parties may agree upon a partition by appraisal pursuant to this chapter.” A partition by appraisal is most commonly used when the Partition of Real Property Act (formerly known as Uniform Partition of Heirs Property Act) is involved.
Partition by Appraisal Requires the Consent of All Co-Owners
Parties seeking to oppose a partition by sale may urge the court to order a partition by appraisal. However, such a request is improper absent agreement of the parties to partition by appraisal. As the 1976 Law Revision Comment to this section explains that: “The purpose of this chapter is to provide an alternative method of partition for coowners who agree to use this method.” Indeed, this manner of partition is strictly reserved for those co-owners who explicitly agree to a partition by appraisal.
From a practical standpoint, the partition by appraisal statutory scheme is rarely used as reflected by the lack of case law interpreting the partition by appraisal statutes. This is presumably because it requires all parties to agree on who will be the buyer and the use of an appraiser. If these co-owners are willing to work together to agree to a partition by appraisal, it is unclear why the parties would need judicial oversight. Indeed, there is nothing that prevents parties from simply hiring an appraiser and deciding a buyout price without filing a partition action.
Partition by appraisal would generally occur when both parties agree that one or more of the co-owners can remain as owner(s) of the property and agrees to buy out the other co-owner(s). These other co-owner(s) must agree to have their interests bought out of the jointly owned property or else a partition by appraisal is not applicable.
Partitions by Appraisal are Rare in California
However, most partitions are filed because the parties are not in agreement. Sometimes, this is because one or more of the co-owners have taken an unreasonable position. In response, the party filing the partition against a co-owner that wishes to buy the property gains an advantage by forcing the sale. Through that forced sale, it is possible that another buyer will show up to pay more for the property, perhaps more than the other co-owner can pay or will pay. This uncertainty often leads to settlements that are fair and equitable to the co-owner who files the partition.
In other words, co-owners generally select a partition by sale, absent the rare situations usually involving vacant land where partition in kind is more appropriate. However, if you have a tenant in common (TIC) agreement or other document that allows for partition by appraisal, this may be a viable option.
Partition of Real Property Act
California’s Partition of Real Property Act effective for cases filed after January 1, 2023, provides for procedures that are similar to the statutory process for a partition by appraisal. Our extensive blogging on this new law, formerly California’s Unform Partition of Heirs Property Act, should answer many questions about this related remedy in a partition case.
Contact an Experienced Partition Attorney in California
If you want to end your co-ownership relationship, but your co-owner won’t agree, a partition action is your only option. Our experienced partition lawyers have years of experience ending co-ownership disputes and can help you unlock the equity in your property. For a free, 15-minute consultation with an experienced partition attorney at Talkov Law, call (844) 4-TALKOV (825568) or fill out a contact form online.
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