PARTITION ACTIONS: How to Exit a Co-Owned Real Estate Investment

Co-Ownership of California Real Estate

PARTITION ACTIONS: How to Exit a Co-Owned Real Estate Investment Pt. 1

By: Julia M. Wei, Attorney-At-Law

California has the remedy of partition, which allows a co-owner to seek sale of the shared property.  A common situation is real estate that is inherited by siblings or cousins.  Each owner has a fractional interest and over time, the property may require repairs and improvements that not all co-owners are willing to pay for.  The carrying costs of shared property will naturally include property taxes, insurance and any mortgage expense. 

When co-owners can’t agree on management of the property, a co-owner can exit that shared investment by seeking partition of property.

A short FAQ on Partition Law in California (found in Code of Civil Procedure Section 872.210):

Who?

Who can seek partition of their property?  Any co-owner except spouses.  The size of the ownership interest is not a factor.

What?

Partition can be in kind or by sale.  In kind is a division of interests, sometimes a suitable result depending on the nature of the property.  For example, a forty acre parcel may be partitioned in kind such as 20 acres to each co-owner assuming equal accessibility and value.  Usually single family residential real estate is partitioned by sale because it is impossible or impracticable to divide the property. The court must determine which is more equitable if the manner of partition is in dispute.  Also, partition by appraisal is possible by mutual agreement.

When?

At any time so long as the co-owner has not waived the right of partition.

Where?

Civil action in superior court.

Why?

Usually when co-owners cannot agree as to the management or status of the property.  One co-owner may wish to liquidate and "cash out" their interest.