Learn how partition actions work in California and how to avoid costly co-ownership disputes. Lucas Real Estate Group in Newport Beach guides clients and Trustees through trust sales, co-ownership agreements, buyouts, planning, and trusted referrals if court action is necessary.
Understanding Partition Actions in California
At Lucas Real Estate Group, we regularly assist clients dealing with the complexities of co-owned real estate — whether that’s through assisting Trustees sell family real estate, buyout negotiations among siblings of inherited property, or negotiating buyouts between co-owners. While we do not directly file partition lawsuits, we have trusted litigation attorneys we refer to when court involvement becomes necessary. Our focus is on avoiding litigation altogether through thoughtful planning, proactive communication, and when needed, formalized buyout agreements.
But it’s essential to understand partition actions — because if co-owners cannot agree, the path often leads to court.
Why Might a Partition Action Be Necessary?
Partition actions are often necessary when co-owners of a property simply cannot agree on how to move forward. This situation arises more frequently than people realize.
For example, two friends may have bought a beach house together years ago — and now, one wants to sell while the other wants to hold onto it. Or two investors purchased a rental property and now one wants out.
Or more commonly, siblings inherit real estate from their parents. Perhaps three siblings now co-own a home their parents once used as a summer beach house. One sibling wants to live in it — or continue living in it — while the others would prefer to sell and receive their share of the inheritance.In another variation, one sibling sees the home as a cherished family compound to gather and continue family traditions, while another sibling, now living in Colorado, has no interest in maintaining a Newport Beach property and would rather cash out. Or maybe two separate families originally purchased a vacation home together, but now the next generation — the children of each family — have inherited the property. With more cooks in the kitchen, differing visions and financial goals create conflict. Some want to be bought out; others refuse to sell.
We’ve seen all of these scenarios — and more. We’ve helped numerous clients resolve disputes and successfully sell inherited properties. We’ve also helped siblings negotiate creative buyouts using strategies like California’s Proposition 19. For example, we’ve used a “share and share alike” approach to help one sibling retain the property with the low property tax basis, while obtaining a bridge loan to buy out the others.
All of this highlights the importance of having a clear co-ownership agreement if you plan to purchase property with a friend, relative, or partner. Without a proper agreement that outlines ownership interests, maintenance responsibilities, and an exit strategy, you may find yourself relying on California’s partition laws — which may not provide a fair or desired outcome for your situation.
Contact a qualified real estate attorney, such as our office, to help you draft a customized co-ownership agreement before you invest in property with others.
What Is a Partition Action?
A partition action is a legal process in California that allows a co-owner of real estate to force the sale (or division) of a property when other co-owners do not agree. These lawsuits are typically filed under California Code of Civil Procedure (CCP) § 872.010 et seq.
In most cases, a court will order a partition by sale, meaning the property is sold and the proceeds are split among the owners according to their ownership shares — with potential adjustments for expenses like mortgage payments, taxes, or property improvements.
Recent Changes to California Partition Law (Partition of Real Property Act)
In 2022, California adopted the Uniform Partition of Heirs Property Act, codified at CCP §§ 874.311–874.323, under the broader umbrella of the Partition of Real Property Act. Originally designed to prevent the loss of generational farmland in southern states, it now applies to a wide variety of California real estate — from multi-million dollar coastal homes to investment properties.
- Right of First Refusal via Appraisal (CCP § 874.317): Before a court orders a public sale, a non-petitioning co-owner has the right to buy out the interests of the other co-owners at an appraised value. This is intended to preserve family ownership but can complicate cases involving investment or mixed-contribution partnerships and inherent disputes over the appraised value. Most co-ownership agreements we draft have more complex provisions than a mere single appraisal. As we’ve seen, if you send out two appraisers, in the absence of a purchase contract (set price known to the appraiser), you will get two different values. Ideally they will be close, but larger swings are possible – Just look up your house on zillow.com and then on redfin.com and compare those companies’ algorithmic values to prove the point.
- Mandatory Court-Appointed Licensed Real Estate Agent (CCP § 874.320): Courts are now required to appoint a licensed real estate broker or agent to handle any sale — rather than receivers or attorneys, which had previously led to higher fees and potential delays (since they would hire a real estate broker anyhow, but then be a paid intermediary throughout the process).
- Court-Ordered Appraisals (CCP § 874.316): The court must determine the fair market value of the property by ordering an appraisal. However, the procedure for how and when appraisals occur is still developing — leaving uncertainty around timing, costs, and dispute resolution. As noted above, this process of a single appraisal to determine the value is guaranteed to disappoint one (or more) parties to the partition action.
- Impact on Mortgaged Property: The Act makes no mention of mortgages or deeds of trust, leaving unresolved how buyouts are to be handled when a mortgage is shared. This creates practical issues, such as one owner being left on the mortgage for a property they no longer own.
- Concerns About Fairness and Delay: While the law aims to protect vulnerable owners, critics argue it introduces delays, increased legal costs, and unclear procedures — particularly in high-cost states like California, where even modest homes may carry large mortgages.
- Potential Elimination of Contribution Claims: Historically, co-owners who paid more toward a property (e.g., down payment or repairs) could recover those contributions in partition actions under CCP § 872.130 and § 873.820. The new Act’s silence on these rights raises concerns about fairness — especially in unequal investment partnerships.
Our Focus: Planning and Resolution, Not Litigation
Partition lawsuits can be expensive, time-consuming, and emotionally draining. At Lucas Real Estate Group, we help clients avoid those disputes through:
- Co-Ownership Agreements: Negotiating and documenting detailed terms of the ownership structure, including initial contributions, ongoing obligations and exit procedures including right of first refusal and detailed methods for valuation.
- Buyout Agreements: Negotiating and documenting fair exits.
- Tax and Legal Planning: Addressing Prop 19, property taxes, and capital gains.
- Trust Administration: Helping heirs and trustees navigate co-owned property through sales or sibling buyouts.
- Referral Network: Connecting clients with skilled litigation counsel if needed.
We serve clients throughout Newport Beach, Eastside Costa Mesa, and Orange County, including Corona del Mar, Dover Shores, Newport Heights, and beyond.
Questions or Need Help?
Thinking of selling California real estate or dealing with a co-ownership situation? Let’s talk. We provide full-service sales, property management, and strategic planning in Newport Beach, Costa Mesa, and the surrounding areas.
📞 Call us at 949-478-1623
✉️ Email [email protected]
– Devin R. Lucas
Author Devin R. Lucas is a Real Estate Broker, REALTOR®, and Real Estate Attorney. Together with licensed CPA and REALTOR® Courtney Lucas, they lead Lucas Real Estate, a full-service real estate group aligned with Coldwell Banker Global Luxury.
We offer unmatched expertise in real estate sales, legal strategy, capital gains planning, and property tax matters, including Propositions 13, 58, 19, and more.
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