How is the sale of a California property conducted in a partition action?
Throughout the process of a partition action in California, the end goal is almost always to force the sale of jointly owned property. With the court ordering the sale, it can be confusing how it goes about doing this. How exactly is a property sold in a partition action? Luckily, the partition attorneys at Talkov Law have handled over 150 partition actions, dozens of which were sold through the court, the remainder of which resulted in an agreed buyout, voluntary sale on the open market, or other settlement.
The most common way a property sold is a partition that the partition referee hires a Realtor to market and sell the property. While California partition statutes like California Code of Civil Procedure 873.520 cryptically speak to a “public auction or private sale,” the practical effect of these laws is that partition referees generally sell property in the same manner as a normal seller. Specifically, the referee will commonly work with a known Realtor for residential properties or broker for partition of commercial properties, each of whom is familiar with the area and type of property. Effectively, the referee becomes the reasonable seller who will do exactly what would have happened if all the sellers of the co-owned property were reasonable. To ensure that reasonable methods are used, many courts appoint attorneys as the referee, though the referee fees are often quite inexpensive when compared to the Realtor fees.
The sales process with a partition referee in a California partition action
The partition referee is someone who is appointed by the courts to market and sell a property while taking into account all parties’ best interests. The referee will make sure parties agree on or have any feedback on the proposed list price. Once a list price is agreed upon, the partition referee appoints a Realtor. The Realtor will then place the property on the MLS, or the Multiple Listing Service, which is a real estate advertising and listing service for real estate professionals, as well as Zillow, Redfin, Trulia, and Realtor.com or other real estate sites. The partition referee will review bids on the property, and, generally, will also inform both co-owners of all bids and give them a chance to outbid those offers. The referee will keep an open line of communication with the owners and be sure to inform them of any developments in the sale process.
Once the referee has reviewed all bids with the co-owners, the plaintiff will create a referee’s report and file a motion to confirm the sale. This hearing will be open for anyone to bid at least 5% higher. Should there be a bidder who overbids on the property by at least 5%, the referee may “Vacate the sale and direct that a new sale be made.” or “Vacate the sale, accept the increased offer, and confirm the sale to the offerer.”
This is a relatively rare occurrence in California, given that a 5% overbid with California’s record-breaking property values is a significant amount. More than likely, a member of the public will not overbid on a property they have no attachment to.
If there is no disagreement as to sale, the referee will submit a stipulated sale order to the court. The court usually approves the order within a few a days.
Sale procedures in a partition action in California
Article 2. Sales Procedures
- CCP § 873.600. Order of Court; Methods and Terms; Agreement of Parties
- CCP § 873.610. Manner, Terms and Conditions Consistent with Chapter; Recommendations of Referee
- CCP § 873.620. Sale of Property Separately or as Unit
- CCP § 873.630. Credit Sales
- CCP § 873.640. Notice of Sale
- CCP § 873.650. Contents of Notice of Sale
- CCP § 873.660. Securities; Perishable Property; Passage of Title; Proceeds
- CCP § 873.670. Public Auction; Location; Postponement
- CCP § 873.680. Private Sale; Time; Bids
- CCP § 873.690. Ineligible Purchasers; Bona Fide Purchaser
Will I receive fair market value for my home when it is sold in a California partition action?
Many co-owners are concerned that partitioning a home may mean that they will not receive fair market value for their property. This is rooted in the incorrect idea that properties in a partition action are sold in a “flash sale” or by other liquidation processes. In reality, with more than one hundred partition actions pending throughout the state, our partition attorneys have found that there is little to no difference in the sale price of a partitioned home and one of a typical home. The home may even sell for more than if it was listed as an ordinary sale as the referee will ensure that any uncooperative coowner is removed from the property. Working with a partition attorney who is also a Realtor and broker will ensure that you receive maximum value for your property.
Talkov Law's Partition Attorneys Can Help
If you want to end your co-ownership relationship, but your co-owner won’t agree, a partition action is your only option. With six, full time partition lawyers, Talkov Law is the #1 partition law firm in California and has handled 250 partition actions throughout California. Every case has resulted in a sale to either a third party or one of the co-owners. Not a single court has denied our clients the right to partition or declared our client to be a non-owner. Plus, for qualified cases, there is no fee until we settle or win your case!