A common misperception in co-ownership of real estate in California is that ex-boyfriends and ex-girlfriends will each get half the proceeds of sale in a partition. This myth is often repeated by exes who put in less than half the money on the property, but want half now that the romantic relationship has ended since their name is on the deed. Whether the exes are joint tenants or tenants in common, unequal payments towards the property will generally result in recognition of offsets by a court in a partition action.
What are Offsets in a Partition Action?
Offsets are unequal contributions towards the property. This includes when only one of the co-owners paid for the down payment, the mortgage, or improvements or when co-owners made unequal payments.
In those situations, the court will perform an accounting since:
The court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.
California Code of Civil Procedure 872.140
The court in Wallace v. Daley found that: “Every partition action includes a final accounting according to the principles of equity for both charges and credits upon each cotenant’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.”[1]Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035.
What Offsets are Most Likely to be Awarded by the Court?
The rule is that: “The court may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.”[2]California Code of Civil Procedure § 872.140
The most commonly awarded offset in a partition is the property’s down payment. A California court has found that “proceeds of partition sale ordered divided ‘in the proportion of one–third to her and two–thirds to him’ based on unequal down payments.”[3]Donnelly v. Wetzel (1918) 37 Cal.App. 741, 742. Similarly, another court “decreed that plaintiff owned a one-fourth interest in the real property and that defendant owned a three-fourths interest based on their proportional unequal payments toward the purchase of the property.”[4]Cosler v. Norwood (1950) 97 Cal.App.2d 665, 666. Many of those down payments are gifts from family members, which the court may presume are a gift to the related co-owner, not to their significant other.
Improvements can also be awarded, but it is important to document payments and the work that was performed. Generally, “where it is shown that one cotenant in common has, in good faith, with or without the consent of his cotenant, expended money in making permanent improvements which were necessary to the preservation of the common property, partition should not be decreed without first counting the cost of such improvements, and making a suitable allowance for the same.”[5]Ventre v. Tiscornia (1913) 23 Cal.App. 598, 605.
Which Offsets are Sometimes Awarded?
When property is owned by partners who have earning capacities, offsets for mortgage payments may be interpreted as a gift from the higher-earning co-owner to their former partner. A seasoned partition attorney may argue a compelling case by distinguishing the principal payments of the mortgage, which is more likely to be reimbursed, from the interest. Furthermore, payments for taxes and insurance might also be eligible for reimbursement. The likelihood of recouping these costs decreases significantly after one party has vacated the property.
Generally, “when, in a suit for partition or a sale for division, or other proceeding between cotenants in equity or in which equitable powers may be exerted, a cotenant who has been in possession or use of the premises seeks to obtain contribution respecting improvements made, or amounts expended in protection or preservation of the property, the court, as incidental to the granting of such relief and by way of adjusting the rights of the parties, may charge the claimant, defensively, with at least a part of the reasonable value of his occupancy or use….”[6]Hunter v. Schultz (1966) 240 Cal.App. 2d 24, 30–31.
What Payments are Less Likely to be Awarded?
There are offsets that may not be awarded such as utility payments, landscaping, pool maintenance, payments in cash without invoices from vendor, and gifts between the co-owners.
Generally the “cotenant is not ordinarily entitled to compensation for services rendered in managing, operating, or taking care of the common property in the absence of an express agreement or a mutual understanding that the services should be paid for.”[7]Combs v. Ritter (1950) 100 Cal. App. 2d 315, 317. In California, “one joint tenant cannot maintain an action against his cotenant for rent for occupancy of the property or for profits derived from his own labor. He may, however, compel the tenant in possession to account for rents collected from third parties.”[8]Swartzbaugh v. Sampson (1936) 11 Cal.App.2d 451. Another California court affirmed that: “A joint tenant out of possession may not maintain an action against his cotenant in possession for the rents, issues and profits derived from the property by means of the occupant’s own labor.”[9]Black v. Black (1949) 91 Cal.App.2d 328, 332.
Give Talkov Law a Call Today
Ending both a romantic relationship and a co-ownership relationship is never easy, but the seasoned partition lawyers at Talkov Law have experience handling partition actions throughout California. If your former romantic partner is refusing to sell a home you co-own together, filing a partition action may help you recover on previous contributions towards improvements, mortgage, and taxes. Contact Talkov Law for a free, 15 minute consultation at (844) 4-TALKOV (825568) or contact us online today.
References
| ↑1 | Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035. |
|---|---|
| ↑2 | California Code of Civil Procedure § 872.140 |
| ↑3 | Donnelly v. Wetzel (1918) 37 Cal.App. 741, 742. |
| ↑4 | Cosler v. Norwood (1950) 97 Cal.App.2d 665, 666. |
| ↑5 | Ventre v. Tiscornia (1913) 23 Cal.App. 598, 605. |
| ↑6 | Hunter v. Schultz (1966) 240 Cal.App. 2d 24, 30–31. |
| ↑7 | Combs v. Ritter (1950) 100 Cal. App. 2d 315, 317. |
| ↑8 | Swartzbaugh v. Sampson (1936) 11 Cal.App.2d 451. |
| ↑9 | Black v. Black (1949) 91 Cal.App.2d 328, 332. |
