Whether parties agree or disagree, a co-owner can be removed from title. If the parties reach an agreement, usually involving a payment, a co-owner can transfer their interest by way of a deed. If the parties cannot reach an agreement, a partition action can also remove a co-owner from title. This article explains these options to resolve a co-ownership dispute.
Transferring Title When Parties Agree
Assuming that the parties who hold interests in the real property agree to conveying one co-owner’s property interest to another, the co-owner who is conveying the interest may use a conveyance deed such as a quitclaim deed or a grant deed. This process typically involves executing a deed or other legal instrument that formally transfers the ownership rights of the property from the current co-owner (the grantor) to the person who receives that interest (the grantee). The grantee may already be a co-owner of the property. Transferring property title effectively changes the legal status of ownership.
There is great public mystery about the difference between a quitclaim deed and grant deed. Certain differences are explained below, though these differences rarely have any impact on the effectiveness of the deed in transferring title to the property.
Quitclaim Deed
A “quitclaim deed transfers whatever present right or interest the grantor has in the property.”[1]City of Manhattan Beach v. Superior Ct. (1996) 13 Cal. 4th 232, 257 (citing Westlake v. Silva (1942) 49 Cal.App.2d 476, 478). “A quitclaim deed does not contain any implied covenant or warranty of title, freedom from encumbrances, or the grantor’s right of possession. It is often used to release all of the interest that the grantor may have or claim to have in the property described at the time of the deed.”[2]Miller & Starr, Quitclaim Deeds—In general, 3 Cal. Real Est. (4th ed.) § 8:13.
For example, Harry and Sally, siblings who inherited a family property, find themselves at odds over its management and ownership due to differing goals and financial situations. After discussions, Harry expresses his wish to exit the co-ownership arrangement, while Sally desires sole ownership. They agree on fair compensation for Harry’s share, and Harry executes a quitclaim deed, transferring whatever present right or interest he has in the property to Sally. This deed, recorded with the county recorder’s office, signifies Harry’s release of all claims or interests in the property to Sally. In this transfer, Sally, as the recipient of the quitclaim deed, has no legal grounds to pursue action against Harry, who transferred the property, if an encumbrance on the property is later discovered. Indeed, in many situations, it is presumed that Sally already knew that there was a mortgage on the property, and that this mortgage would remain after the deed was executed and recorded.
Grant Deed
Grant deeds are standard instruments used to transfer the title of real estate requiring that the property interest being conveyed hasn’t already been transferred to someone else. These assurances, called implied promises, offer extra safety for co-owners. As explained by Miller & Starr, 3 Cal. Real Est. (4th ed.) § 8:6, a grantor must follow two important guarantees, called implied covenants, when conveying property to a grantee:
(1) that prior to the execution of the conveyance he or she has not conveyed the same estate, or any right, title, or interest therein, to any person other than the grantee; and
Miller & Starr, 3 Cal. Real Est. (4th ed.) § 8:6
(2) that such estate is, at the time of the execution of said conveyance, free from any encumbrance that is done, made, or suffered by the grantor, or any person claiming under the grantor, such as his or her agents, employees, or representatives.
If the property will indeed have a mortgage, known in California law as a deed of trust, after the transfer, a grant deed should not be used. Instead, a quitclaim deed would likely be appropriate.
Removing a Co-Owner Without Mutual Agreement
When co-owners of real property find themselves at odds over the transfer of title, two legal avenues offer resolution: partition action and quiet title. In California, the right to pursue a partition action is unequivocal and ensures an absolute entitlement to partition, mandating equitable distribution through a court-supervised sale and subsequent allocation of proceeds. By contrast, the other method, quiet title actions, is only available in certain circumstances where one party is not a true, equitable owner of the property.
Partition Actions
In California, co-owners are unconditionally entitled to pursue a partition action. This signifies that any co-owner, regardless of the extent of their stake in the property, has the ability to initiate a partition process. Generally, a partition action cannot be halted unilaterally by a dissenting party. Instead, the defendant usually much reach an agreement through settlement negotiations, which usually involves payment to the plaintiff for their interest in the property. As the courts have explained, “the right to partition is absolute, and cannot be denied, ‘either because of any supposed difficulty, nor on the suggestion that the interest of the cotenants will be promoted by refusing the application or temporarily postponing action…,’”[3]Priddel v. Shankie (1945) 69 Cal.App. 2d 319, 325.
The partition statutes explain in Code of Civil Procedure 872.820 that the judge will determine whether a partition in kind or a partition by sale is appropriate, though most cases proceed by partition by sale.
In a partition action where the court finds a partition by sale is proper, the following two-phase process will be executed to equitably divide the property among the co-owners:
- A Realtor is typically engaged to promote the property on the open market with the aim of securing the highest possible sale price. It’s worth noting that in some instances, one of the co-owners may emerge as the purchaser of the property.
- Co-owners are afforded the opportunity to assert any claims for offsets related to equal payments for mortgage, taxes, insurance, repairs, improvements, rental income, and other relevant expenses. Additionally, the court retains the authority to allocate partition attorney’s fees, typically in favor of the party initiating the partition action.
If your goal is to ensure that you are the sole owner, or simply to remove the other co-owner through a partition action, it is important to work with a partition attorney experienced in strategies to buyout co-owners in a partition action.
Quiet Title Actions
Many co-owners believe that a quiet title action might solve their problems. However, this is rarely the case.
At its essence, a quiet title is a legal proceeding aimed at establishing or confirming one’s legal ownership of real property while eliminating any competing claims or clouds on the title. It is particularly useful in situations where there are uncertainties or conflicting assertions regarding property co-ownership, involving boundary disputes, unresolved liens, or conflicting claims stemming from inheritance or previous conveyances. Quiet title actions are particularly important when a party’s name is on the deed, but they do not hold equitable title to the property.
Due to the requirement of proving title contrary to a recorded deed by clear and convincing evidence, quiet title is rarely effective at removing a co-owner who contributed to the down payment, made mortgage payments, or was otherwise treated like a real co-owner at any time in the past.
Talkov Law’s Partition Attorneys Can Help
Navigating property ownership disputes can be a complex endeavor, often necessitating a clear understanding of the legal avenues available to resolve conflicts. Whether stemming from disagreements among co-owners or uncertainties regarding property rights, such disputes can escalate, leading to real estate litigation. Given the potential for property ownership conflicts to escalate into litigation, seeking counsel from a seasoned partition attorney is advisable. If you’re looking to end your co-ownership dispute, including by retaining the property through a buyout of the co-owner’s interest, contact California’s premier partition action law firm by reaching out to Talkov Law. For a free consultation, call (844) 4-TALKOV (825568) or reach out online today.
Talkov Law unlocks access to justice for co-owners by funding your case. For qualified cases, you pay no fees until we successfully partition your property by obtaining a sale on the market or to your co-owner!
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