In this post I briefly discuss some of the other claims and issues that arise or that can arise in your partition action under the California Partition of Real Property Act. This post is the fourth post in this series about the Act, and it is the last post in this series. However, of course, I will be making other posts about the partition of real property both under the California Partition of Real Property Act and also under the other already existing California partition statutes. The following are not in any particular order, and, I must add that of course the following are brief summaries and it also is not possible to anticipate all of the other claims and issues that might arise and be presented to the Court.
1. The methods for service of the Complaint under the Act are the same as under other statutes and case law, including, for example, service by publication. Service is important for the Court to have jurisdiction (consider, for example, personal and in rem jurisdiction, and also consider possibly applicable service options under the Code of Civil Procedure, the Probate Code, the Civil Code, and pursuant to agreement between the people and entity parties). See, e.g., California Code of Civil Procedure §874.314.
2. The Court can appoint a referee, and which should be anticipated as a possiblity. See, e.g., California Code of Civil Procedure §874.315.
3. The following is a copy and paste of the California Partition of Real Property Act §§874.317(g) and (h):
(g) Not later than 45 days after the court sends notice to the parties pursuant to subdivision (a), any cotenant entitled to buy an interest under this section may request the court to authorize the sale as part of the pending action of the interests of cotenants named as defendants and served with the complaint but that did not appear in the action.
(h) If the court receives a timely request under subdivision (g), the court, after a hearing, may deny the request or authorize the requested additional sale on such terms as the court determines are fair and reasonable, subject to the following limitations:
(1) A sale authorized under this subdivision may occur only after the purchase prices for all interests subject to sale under subdivisions (a) to (f), inclusive, have been paid into court and those interests have been reallocated among the cotenants as provided in those subdivisions.
(2) The purchase price for the interest of a nonappearing cotenant is based on the court’s determination of value under Section 874.316.
As you can see – there can be significant repercussions for a defendant who is served with the Complaint under the Act but who does not appear in the action.
4. If all the interests of all cotenants that requested partition by sale are not purchased by other cotenants pursuant to California Code of Civil Procedure §874.317, or if after conclusion of the buyout under Section 874.317 a cotenant remains that has requested partition in kind, the Court shall order partition in kind unless the Court, after consideration of the factors listed in Section 874.319, finds that partition in kind will result in great prejudice to the cotenants as a group. In considering whether to order partition in kind, the Court shall approve a request by two or more parties to have their individual interests aggregated. See, e.g., California Code of Civil Procedure §874.318.
The following are the factors that are listed in Section 874.319:
California Code of Civil Procedure §874.319
(a) In determining whether partition in kind would result in great prejudice to the cotenants as a group, the court shall consider the following:
(1) Whether the property practicably can be divided among the cotenants.
(2) Whether partition in kind would apportion the property in such a way that the aggregate fair market value of the parcels resulting from the division would be materially less than the value of the property if it were sold as a whole, taking into account the condition under which a court-ordered sale likely would occur.
(3) Evidence of the collective duration of ownership or possession of the property by a cotenant and one or more predecessors in title or predecessors in possession to the cotenant who are or were relatives of the cotenant or each other.
(4) A cotenant’s sentimental attachment to the property, including any attachment arising because the property has ancestral or other unique or special value to the cotenant.
(5) The lawful use being made of the property by a cotenant and the degree to which the cotenant would be harmed if the cotenant could not continue the same use of the property.
(6) The degree to which the cotenants have contributed their pro rata share of the property taxes, insurance, and other expenses associated with maintaining ownership of the property or have contributed to the physical improvement, maintenance, or upkeep of the property.
(7) Any other relevant factor.
(b) The court shall not consider any one factor in subdivision (a) to be dispositive without weighing the totality of all relevant factors and circumstances.
5. Apportionment – costs, fees, taxes, insurance, other expenses, and possibly attorneys’ fees.
The possible apportionment or charging of costs, expenses, and fees including possibly attorneys’ fees requires careful analysis case-by-case – thus, for example, and so that you can get a feel for some of the possibilities that can occur, I am providing you with the following statutes or part thereof.
California Code of Civil Procedure §874.321.5 provides as follows:
In an action for partition of property, the court may apportion the costs of partition, including an appraisal fee, pursuant to Section 874.040, except that the court shall not apportion the costs of partition to any party that opposes the partition unless doing so is equitable and consistent with the purposes of this chapter.
Further, in its discussion of whether partition in kind would result in great prejudice, California Code of Civil Procedure §874.319(a)(6) lists the following as being relevant:
(6) The degree to which the cotenants have contributed their pro rata share of the property taxes, insurance, and other expenses associated with maintaining ownership of the property or have contributed to the physical improvement, maintenance, or upkeep of the property.
As California Code of Civil Procedure §874.321.5 (see above) references Section 874.040, California Code of Civil Procedure §§874.010 through 874.050 (including Section 874.040) provide as follows:
Section 874.010:
The costs of partition include:
(a) Reasonable attorney’s fees incurred or paid by a party for the common benefit.
(b) The fee and expenses of the referee.
(c) The compensation provided by contract for services of a surveyor or other person employed by the referee in the action.
(d) The reasonable costs of a title report procured pursuant to Section 872.220 with interest thereon at the legal rate from the time of payment or, if paid before commencement of the action, from the time of commencement of the action.
(e) Other disbursements or expenses determined by the court to have been incurred or paid for the common benefit.
Section 874.020:
The costs of partition include reasonable expenses, including attorney’s fees, necessarily incurred by a party for the common benefit in prosecuting or defending other actions or other proceedings for the protection, confirmation, or perfection of title, setting the boundaries, or making a survey of the property, with interest thereon at the legal rate from the time of making the expenditures.
Section 874.030:
Where disbursements have been made by a party under the direction of the court, interest at the legal rate shall be allowed thereon from the time of making such disbursements.
Section 874.040:
Except as otherwise provided in this article, the court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable.
Section 874.050:
(a) The court may order that the share of the costs apportioned to a future interest be paid by other parties to the action or by the persons who are then the presumptive owners of the future interest.
(b) Where the court orders payment pursuant to this section, such payment is subject to a right of reimbursement, with interest at the legal rate, secured by a charge upon the future interest.
Thus, the possible apportionment or charging of costs, expenses, and fees including possibly attorneys’ fees can be quite broad (and see, for example, Section 874.010(e) above), and see also 6. below discussing possible additional claims, requests for damages and remedies.
6. Finally, but this is a very big “finally” category – real property partition actions both under the California Partition of Real Property Act and under the other California partition statutes that apply if the Act does not often involve or are related to or might be consolidated with additional claims such as for fraud and deceit, breach of contractual duties, breach of fiduciary duties, minority interest claims, conflicts of interest, theft, constructive trust, accounting, and the list of possible claims and possible requests for damages and remedies goes on.
Best to you, David Tate, Esq.
Please reach out on this topic or on other topics if you wish.
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David Tate, Esq. (and inactive CPA)
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David Tate, Esq. (and inactive California CPA) – practicing only as an attorney in California.
David Tate, Esq. - Litigation and Governance Attorney, and Mediator - California (and inactive CPA) – (1) Trust, estate, probate, elder abuse, POA, partition, etc. disputes, litigation and contentious administrations and special assets; (2) business and real property contract litigation and internal and co-owner business disputes, partition and buyout litigation, governance, boards, AC, GC, investigations and audit; (3) mediator and dispute resolution services - authority, rights, duties, conflicts of interest, governance, diligence, compliance, liability, and ADR. 