Code of Civil Procedure 872.820 CCP – Sale of Property; Division of Proceeds (Manner of Partition)

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California Code of Civil Procedure 872.820 is the California partition statute that provides for the manner of partition to be partition by sale so long as the it would be more equitable than partition in kind. The statute provides that:

Notwithstanding Section 872.810, the court shall order that the property be sold and the proceeds be divided among the parties in accordance with their interests in the property as determined in the interlocutory judgment in the following situations:

(a) The parties agree to such relief, by their pleadings or otherwise.

(b) The court determines that, under the circumstances, sale and division of the proceeds would be more equitable than division of the property. For the purpose of making the determination, the court may appoint a referee and take into account his report.[1]California Code of Civil Procedure 872.820

The practical effect of Section 872.820(b) is that most properties will result in a partition by sale since most properties in a partition action are single-family homes that cannot “equitably” be split between the co-owners.

Single-Family Homes Will Almost Always Result in Partition by Sale

The effect of California Code of Civil Procedure 872.820(b) is that almost all single-family homes will result in a partition by sale because it is not possible to equitably divide the property into two parcels of equal value. As one secondary source explains, a “sale may be more equitable if, for example, the value of the whole would exceed that of the divided parcels, or zoning restrictions make physical division impracticable.”[2]Determination of Manner of Partition., 12 Witkin, Summary 11th Real Prop (2020) § 73 A rare exception would be a single-family home located on a parcel with a significant portion of land with value equal to the house, e.g., a farm house. Another rare exception might be when there are two homes on a lot. However, generally this element of the manner of partition for an interlocutory judgment is almost always met as a matter of law for single-family homes.[3]California Code of Civil Procedure 872.720

Burden of Proof on Manner of Partition

“As a rule, the law favors partition in kind, since this does not disturb the existing form of inheritance or compel a person to sell his property against his will. The presumption is that land held in common tenancy can be equitably divided between the parties by allowing each a tract in severalty, equal to his interest in the whole, measured by value.”[4]Richmond v. Dofflemyer (1980) 105 Cal.App. 3d 745, 757

The leading treatise on real estate law in California provides that “[t]he burden of proof is on the party who seeks a sale, rather than a physical division, to prove that it would be ‘more equitable’ to sell the property rather than to divide it and distribute portions in kind to the cotenants.”[5]Miller & Starr, Right of partition—Partition by a sale of the property, 4 Cal. Real Est. (4th ed.) § 11:17 The treatise goes on to explain that: “In order to compel a sale rather than a physical division, it must be shown that either: (1) a division into subparcels of equal value cannot be made, or (2) a division of the land would substantially diminish the value of each party’s interest, such that the portion received by each cotenant would be of substantially less value than the cash received on a sale.”[6]Id.

Partition by Sale vs. Partition in Kind – Butte Creek Island Ranch v. Crim

The seminal case of Butte Creek Island Ranch v. Crim (1982) 136 Cal. App. 3d 360, 366–67:

There are two types of evidence which have been held sufficient to justify a partition sale of property rather than physical division.

The first is evidence that the property is so situated that a division into subparcels of equal value cannot be made. This test is not met by evidence that a portion of the property is not equal to the whole, for that is always the case in a partition action. Nor is this test met by evidence that the land is not “fungible” or uniform in character. (See Williams v. Wells Fargo Banksupra., 56 Cal.App.2d at pp. 647-648.) In order to meet this test the party desiring a partition sale must show that the land cannot be divided equally. (East Shore Co. v. Richmond Belt Railway (1916) 172 Cal. 174, 180.) An example of this type of situation is provided in Sting v. Beckham (1949) 94 Cal.App.2d 823, where it was shown that the major value of the land consisted of a water well and that without the well the land had little value. In that case physical division of the land would have required an award of the subparcel with the well to one party to the manifest prejudice of the other party. Another example is provided in Priddel v. Shankie (1945) 69 Cal.App.2d 319, which involved a small (40 feet by 140 feet) inside lot with structures located in such a way as to preclude equal partition.The referee appointed by stipulation of the parties concluded that parcel B was capable of physical division and that this was the most equitable solution. That parcel could be divided into a north and a south parcel of approximately 90.5 acres each and provision could be made for access easements over existing paths. Plaintiff initially conceded the fairness of such a division before a change of mind based upon factors extraneous to the feasibility of physical division. Upon such a change of heart it was incumbent upon plaintiff to prove that the land was not capable of equal division; yet the record is insufficient in this regard. It may be admitted, as defendant in fact conceded, that ownership of the entire parcel B would be more advantageous to plaintiff. That concession, however, does nothing to establish that the property is not capable of equal division. Moreover, any potential prejudice through an imprecise division was obviated by defendant’s offer to permit plaintiff to select which of the subparcels it desired. Sale of the property is thus not supported by this first type of evidence.

The second type of evidence which supports a partition sale rather than physical division is economic evidence to the effect that, due to the particular situation of the land, the division of the land would substantially diminish the value of each party’s interest. The generally accepted test in this regard is whether a partition in kind would result in a cotenant receiving a portion of the land which would be worth materially less than the share of the money which could be obtained through sale of the land as a whole.  This is a purely economic test. If plaintiff, who demands that the land be sold, can receive a portion of the land through physical division and that portion could be sold for a sum equal to the amount it could realize through sale of the entire parcel then as a matter of law no economic prejudice can be shown. The manifest inequity of ousting an unwilling cotenant from the land where no economic detriment is suffered cannot be permitted. An example of this type of situation is provided in Formosa Corp. v. Rogers (1951) 108 Cal.App.2d 397, there a 17.4 acre movie studio had been developed in such a unique manner that physical division would result in damage to the aggregate value of the land in the amount of $1.5 million.[7]Butte Creek Island Ranch v. Crim (1982) 136 Cal. App. 3d 360, 366–67

Presumption in Favor of Physical Division Can be Overcome Without Showing Great Prejudice

The law is that: “Partition in kind is favored in law and in the absence of proof to the contrary the presumption in favor of in kind division will prevail.”[8]Butte Creek Island Ranch v. Crim (1982) 136 Cal.App. 3d 360, 365

It is important to note that “‘great prejudice’ from physical division (former C.C.P. 752 et seq.) is no longer a prerequisite to sale.”[9]Determination of Manner of Partition., 12 Witkin, Summary 11th Real Prop (2020) § 73 (citing Law Rev. Com. Comment on C.C.P. 872.820 and Butte Creek Island Ranch v. Crim (1982) 136 C.A.3d 360, 365, … Continue reading The effect is that partition by sale is now easier to obtain.

Contact an Experienced Partition Attorney in California

If you want to end your co-ownership relationship, but your co-owner won’t agree, a partition action is your only option. Our experienced partition lawyers have years of experience ending co-ownership disputes and can help you unlock the equity in your property. For a free, 15 minute consultation with an experienced partition attorney at Talkov Law, call (844) 482-5568 or fill out a contact form online.

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References

References
1 California Code of Civil Procedure 872.820
2 Determination of Manner of Partition., 12 Witkin, Summary 11th Real Prop (2020) § 73
3 California Code of Civil Procedure 872.720
4 Richmond v. Dofflemyer (1980) 105 Cal.App. 3d 745, 757
5 Miller & Starr, Right of partition—Partition by a sale of the property, 4 Cal. Real Est. (4th ed.) § 11:17
6 Id.
7 Butte Creek Island Ranch v. Crim (1982) 136 Cal. App. 3d 360, 366–67
8 Butte Creek Island Ranch v. Crim (1982) 136 Cal.App. 3d 360, 365
9 Determination of Manner of Partition., 12 Witkin, Summary 11th Real Prop (2020) § 73 (citing Law Rev. Com. Comment on C.C.P. 872.820 and Butte Creek Island Ranch v. Crim (1982) 136 C.A.3d 360, 365, 186 C.R. 252 [although ‘great prejudice’ need not be shown before sale, presumption in favor of physical division over sale still controls]); see generally 48 Cal. Jur. 3d Partition § 65. One court explained this change as follows: “As a rule, the law favors partition in kind, since this does not disturb the existing form of inheritance or compel a person to sell his property against his will. Forced sales are strongly disfavored. The 1976 revision of the partition statute, section 872.810, continues this preference, but the standard for allowing a sale of property has been changed from ‘great prejudice’ to ‘more equitable’ under section 872.820, subdivision (b), thereby enabling sale in cases where it previously was precluded under the predecessor statute.” Richmond v. Dofflemyer (1980) 105 Cal.App. 3d 745, 757.
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