Separating from a partner is a difficult position but it is even more complex when an unmarried couple separates after purchasing a property together. Unfortunately, this scenario is common enough that nearly half of all partition cases involve unmarried couples. Depending on whether the goal of a co-owner is to force the sale of the property to a third party or buy out a co-owner for sole possession of the property, retaining a partition attorney to help navigate through the legal intricacies of each option is integral.
Co-Owner Agrees to be Removed From Title
The most amicable scenario involves a co-owner who willingly agrees to be removed from the title by executing a deed. The grantor (also known as transferor) on the deed would be the co-owner whose name is being removed. The grantee (also known as the transferee or recipient) on the deed could be either an existing co-owner or anyone else. This article does not explain the details of how this is done, so it is important to work with a lawyer or title company and to buy title insurance to protect your interests.
Co-Owner Does Not Agree to be Removed From Title
It is common for co-ownership relationships to deteriorate when the property was purchased by a couple who is no longer seeing eye to eye. When co-owners cannot agree on how to manage their co-owned property, filing a partition will allow the court to equitably divide the interests of all the co-owners even if one or more co-owners does not agree to the sale or division.
A partition action is particularly appropriate for former partners who would be inconvenienced by the joint possession of land. As explained by a California court: “Partition is a remedy much favored by the law. The original purpose of partition was to permit cotenants to avoid the inconvenience and dissension arising from sharing joint possession of land. An additional reason to favor partition is the policy of facilitating transmission of title, thereby avoiding unreasonable restraints on the use and enjoyment of property.”[1]LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 493.
Forced Sale of Property to Third Party
“A tenant in common has an absolute right to partition.”[2]Formosa Corp. v. Rogers (1951) 108 Cal.App. 2d 397, 409. Under California Code of Civil Procedure Section 872.210, the court must divide California real estate equitably among its co-owners. The leading treatise on real estate law in California, Miller & Starr, explains that “[t]he burden of proof is on the party who seeks a sale, rather than a physical division, to prove that it would be ‘more equitable’ to sell the property rather than to divide it and distribute portions in kind to the cotenants.”[3]Right of partition—Partition by a sale of the property, 4 Cal. Real Est. (4th ed.) § 11:17. “In order to compel a sale rather than a physical division, it must be shown that either: (1) a division into subparcels of equal value cannot be made, or (2) a division of the land would substantially diminish the value of each party’s interest, such that the portion received by each cotenant would be of substantially less value than the cash received on a sale.”[4]Right of partition—Partition by a sale of the property, 4 Cal. Real Est. (4th ed.) § 11:17.
In general, the portion of the land with the home will be worth more than any land that could be divided where the home is not located. Accordingly, single-family homes are almost universally ordered to be sold in a partition by sale.
Buy Out Your Co-Owner’s Interest
The newest co-owner buy-out technique arises under the Partition of Real Property Act effective January 1, 2023, as follows:
If any cotenant requested partition by sale, the court shall, after the determination of value under Section 874.316, 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.
California Code of Civil Procedure 874.317(a)
When determining the sum owed to a co-owner for buying out their interest, the Partition of Real Property Act, California Code of Civil Procedure 874.316 establishes a protocol for appraising property in partition actions. California Code of Civil Procedure 874.316(b-d) dictates 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(b-d)
Are You Entitled to the Money You Contributed?
When a co-owner files a partition action, and “the court has determined the share of each party in the net proceeds of the sale according to their respective interests, any claims that one party may have against the other should be deducted from the share of the party to be charged, and that of the other party should be increased accordingly.”[5]48 Cal. Jur. 3d Partition § 98
In California, “[w]hen a cotenant makes advances from his own pocket to preserve the common estate, his investment in the property increases by the entire amount advanced. Upon sale of the estate he is entitled to be reimbursed his entire advancement before the balance is equally divided.”[6]Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal. App. 2d 539, 541. As explained by another California court, “[e]very 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.”[7]Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1035–36.
Give Talkov Law a Call Today
It’s not uncommon for one property owner to add their soon-to-be spouse to the title of their home in anticipation of a forthcoming marriage. The decision to force the sale of property that is jointly owned by ex-fiancés is a common result of breakups involving property disputes. If your ex-fiancé(e) is refusing to sell a home you co-own together, contact California’s #1 team for partition action. Talkov Law’s partition attorneys are equipped to provide the guidance and representation you need. For a free consultation, call (844) 4-TALKOV (825568) or reach out online today.
References
| ↑1 | LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 493. |
|---|---|
| ↑2 | Formosa Corp. v. Rogers (1951) 108 Cal.App. 2d 397, 409. |
| ↑3, ↑4 | Right of partition—Partition by a sale of the property, 4 Cal. Real Est. (4th ed.) § 11:17. |
| ↑5 | 48 Cal. Jur. 3d Partition § 98 |
| ↑6 | Southern Adjustment Bureau, Inc. v. Nelson (1964) 230 Cal. App. 2d 539, 541. |
| ↑7 | Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1035–36. |
