7 Affirmative Defenses to a Partition Action in California

//

When Two People Own Property, But One Person Doesn’t Want to Sell

Tricks To Save Your House in a Partition Action

An experienced partition attorney in California may often be asked whether there are affirmative defenses to a partition under California law. Of course, every defendant wants to win a partition action.

While some people may refer to these as affirmative defenses, it might be best to look them as ways to achieve a better outcome. If played correctly, you may even be able to save your house and become the sole owner for as little as possible. Even if your house is sold, you may be able to maximize your return.

How to Stop a Partition Action

1) Challenging a Plaintiff’s Standing to Bring a Partition Action

The requirement is that “A partition action may be commenced and maintained by…An owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate therein is owned by several persons concurrently or in successive estates.” Code Civ. Proc. § 872.210(a)(2). So long as the plaintiff is not alleging a community property interest that must be raised through a family law attorney, any co-owner of the property has a right to partition under California law.

Courts have even considered partition as a remedy when an owner is not on record title, meaning they hired a quiet title attorney who would have been required to show their equitable ownership by clear and convincing evidence under Evidence Code 662.

Contrary to common belief, there is no requirement that the parties bringing a partition action have the support of a majority of owners of the property.  Rather, an owner of just 1% of a property could bring a partition action. While defendants may not be pleased, partitions promote the alienability (ability to be sold) of property so that properties do not become owned by numerous owners who must reach an agreement to sell to just one owner. However, even if this defense does not apply, other defenses may be available.

Keep in mind that all of this information likely does not apply to property a married couple owns as joint tenants. Spouses looking for information about how to sell jointly owned property in a divorce should refer to this article about the sale of property in a divorce, written by a California divorce attorney.

2) Waiver of Right to Partition

“A co-owner of property has an absolute right to partition unless barred by a valid waiver.” Orien v. Lutz (2017) 16 Cal.App. 5th 957, 962 (citing Code Civ. Proc. § 872.710(b) (“partition as to concurrent interests in the property shall be as of right unless barred by a valid waiver”)); see, e.g., Pine v. Tiedt (1965) 232 Cal. App. 2d 734; American Medical International, Inc. v. Feller (1976) 59 Cal.App. 3d 1008, 1014.

Ordinarily, such a waiver would come about due to “an agreement among co-owners of property….” Orien v. Lutz (2017) 16 Cal. App. 5th 957, 963. However, such written agreements between co-owners of real property are rarely seen in California. Rather, most co-owners simply accept a deed placing multiple owners on title, then realize the complications of doing so later. Establishing this defense is possible, but a writing is going to go a long away.

3) Keep Recoverable Costs Low by Showing Cooperation with the Plaintiff, Referee, Realtor/Broker and Court in the Listing and Sale

If you’re hoping to defeat a partition, it is still important to show some level of cooperation with the plaintiff, the referee, any broker or Realtor hired to list the property for sale, and the court for any hearings. This will allow you to be in the good graces of these important parties in the process to the extent you wish to leverage your position as co-owner. It can also reduce the costs that may be apportioned to each of the co-owners after the sale.

4) Refinance the Property to Buy Out the Co-Owner

One of the most common ways to defeat a partition action is to buy out the other co-owner or co-owners. Generally speaking, to determine the amount that should be paid, first determine the likely value of the property, them deduct the costs of sale (perhaps 7% to 9%), then deduct any mortgages or liens on the property. From this amount, determine the percentage interest of each owner in the property to find their equity. Generally, buying out the interest of a co-owner involves obtaining a loan. This can be done by using an escrow to hold the deed from the other co-owners while the purchasing party deposits all the funds necessary. When the loan is funded, the escrow will pay the co-owner and record the deed. Of course, if you have the cash, you’re welcome to fund the escrow with cash.

5) Overbid at the Sale with a Credit Bid for the Co-Owner’s Equity in the Property

California law provides that “the court shall order sale by such methods and upon such terms as are expressly agreed to in writing by all the parties to the action.” Code Civ. Proc. § 873.600. It goes on to provide that: “The court may, at the time of trial or thereafter, prescribe such manner, terms, and conditions of sale not inconsistent with the provisions of this chapter as it deems proper for the particular property or sale.” Code Civ. Proc. § 873.610(a).

Accordingly, co-owners of a property hoping to save their home should request that the court allow overbidding at the hearing approving the sale so that the co-owner can outbid any third party.

The co-owner should also request that the co-owner be given credit for their one-half interest in the property, sometimes known as a credit bid. For example, if all parties agree that the co-owner will obtain $100,000 from the sale of the property, that co-owner should be able to bid the $100,000 they would otherwise receive. As a practical matter, that would mean that the co-owner who buys from the court would need a smaller loan to purchase the house. For example, if the purchase price is $300,000, and the co-owner has a credit bid of $100,000, they would only need to obtain $200,000 more to buy the house.

6) Recovering Offsets, Reimbursements and Attorney’s Fees

Co-owners should always be mindful that the state court has the power to order the recovery of attorney’s fees, costs, credits & reimbursements in a partition accounting. The famous case of Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1036 explained as follows:

Every 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.

Co-owners seeking to maximize their outcome from the partition action should keep careful records of the payments they made and the payments that the other co-owner did not make on property taxes, insurance coverage, mortgage payments, repairs, etc.

7) Offsets Exceeding the Plaintiff’s Equity in the Property

Theoretically, if a co-owner can show that the plaintiff has no equity in the property, the Court may be hesitant to allow a partition to go forward. One such way of showing that the plaintiff has no equity would be if the offsets exceed the plaintiff’s equity in the property under an assumed sale at fair market value. This would require certain facts that may only be present in certain cases.

Contact an Experienced Partition Attorney in California

The bottom line is that partition actions in California are complicated, meaning it is important to protect your rights to stop the effect of a partition action by contacting a real estate lawyer with experience in partition actions to determine the best course of action.

  • What is an Answer to a Partition Action?What is an Answer to a Partition Action?
    Answer to a Partition Action Complaint in California When an action for partition is filed, the opposing party has an opportunity to respond to this action by filing an answer. An answer to a partition action is a pleading by…
  • Civil Code § 683.2(c) – Joint Tenancy Severance After Death is Limited by California LawCivil Code § 683.2(c) – Joint Tenancy Severance After Death is Limited by California Law
    By definition, a joint tenancy is an interest in property in which each party has an equal share in the property. Joint tenants also enjoy the privilege of the right of survivorship, which allows a deceased joint tenant’s interest in…
  • The Ultimate Glossary of Partition Action TermsThe Ultimate Glossary of Partition Action Terms
    A partition action is the only court-ordered process to separate joint owners’ respective interests in California real estate. This process can be long, tedious, and difficult, but the attorneys at Talkov Law are here to help. They have provided this…
  • Co-Owner’s Rights to Lease and Evict TenantsCo-Owner’s Rights to Lease and Evict Tenants
    A common issue with co-ownership is how to manage rented property. Notably, many times only one of the co-owners allows a third party to lease the co-owned property without the consent or over the objection of the other co-owners. As…
  • What is an Ouster?What is an Ouster?
    Co-ownership of property can raise many questions about the rights of each owner to the common property. Conversely, that co-ownership relationship can sour, causing one co-owner to seek the benefits of sole ownership- the right to exclude others- without the…
  • How to Win a Partition ActionHow to Win a Partition Action
    The Tricks to Winning a Partition Action in California A partition action is the only court process in California to end disputes when parties are co-owners (also known as co-tenants) of real property. Indeed, the court must divide the real…
  • Absolute Right to Partition in CaliforniaAbsolute Right to Partition in California
    One of the most common questions raised by co-owners of real property in California is how to force the sale of the property when the co-owners do not agree. California Code of Civil Procedure Section 872.210 allows a co-owner to…
  • If I Leave the Property, Do I Forfeit Co-Ownership Rights?If I Leave the Property, Do I Forfeit Co-Ownership Rights?
    As partition attorneys, property co-owners frequently ask if ownership rights can be forfeited by a co-owner moving out of (“abandoning”) the property. More specifically, co-owners want to know if they would give up their ownership rights to a co-owned property…
About Scott Talkov

Scott Talkov is a real estate lawyer, business litigator and bankruptcy lawyer in California. He founded Talkov Law Corp. after of experience with one of the region's oldest law firms, where he served as one of the firm's partners. He has been featured on ABC 7, CNN, KCBS, and KCAL-9, and in the Los Angeles Times, the Orange County Register, the San Diego Union-Tribune, the Press-Enterpise, and in Los Angeles Lawyer Magazine. Scott has been named a Super Lawyers Rising Star every year since 2013. He can be reached about new matters at info@talkovlaw.com or (844) 4-TALKOV (825568). He can also be contacted directly at scott@talkovlaw.com.

Contact us to schedule your complimentary consultation.

Super Lawyers
US News and World Report Scott Talkov
Scott Talkov Three Best Rated 2021

Recent Blog Posts