How does a partition sale work in California?.

My ex-partner is trying to force a partition sale of a home we share as J T W R S. My questions are: 1. Are residents forced to leave the house when it goes on sale or only after it is sold? 2. Do the lien holders get paid first, then attorney and then the remainder divided between co-owners? 3. If the house is upside down in value, would a court force the sale if there is no equity?

Long Beach, CA -

Attorney Answers (3)

Michael Raymond Daymude

Michael Raymond Daymude

Real Estate Attorney - Sherman Oaks, CA
Answered

Partition actions in CA are governed by Code of Civil Procedure section 871.010 et seq. Disputes between spouses involving division of community or quasi community real property are excluded from partition by CCP 872.210 (b) as are disputes between registered domestic partnerships.

Partition actions are expensive. Anyone with an interest in the property, including lienholders, must be joined. If the owners cannot agree on the terms of partition, the court must order a sale of the property.

The filing of the partition action may accelerate any loan and an early foreclosure of the property. While unlikely, as long as the loans are being kept current, it is more likely when the property is underwater.

The court in a partition action is a court of equity and may make orders as appropriate. Generally, however, a party in possession cannot be forced to deliver up possession until the property is sold. However, the court can make orders regarding payment of expenses relating to the property while the action is pending.

“Do the lien holders get paid first, then attorney and then the remainder divided between co-owners?” – Yes, that would be the typical case. However, the entire cost of the partition action, not just the attorney fees, would be paid by the parties in the percentage of their interest in the property.

“If the house is upside down in value, would a court force the sale if there is no equity?” – Yes, that is a possibility. Therefore, because of the cost and expense of a partition action it is far better for the parties to mediate their dispute if they cannot agree, or arbitrate it. In nearly all cases, each party will fair substantially better financially if the costs of partition can be avoided.

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Frank Wei-Hong Chen

Frank Wei-Hong Chen

Real Estate Attorney - San Marino, CA
Answered

1. No, not until after the house is sold.

2. Yes, all lien holders and encumbrances must be paid in the priority set by statute. Upon granting judgment partitioning by sale of each property, the court will order that the proceeds of the sale pay the encumbrances thereon, and the net proceeds thereof then be divided between the parties in an equitable amount to be determined by the court, in addition to allowance, accounting, contribution, or other compensatory adjustment among the parties according to principles of equity, pursuant to California Code of Civil Procedure section 872.140. In such a partition action, each party will need to present evidence of why the court ought to distribute the proceeds differently than the ownership percentages.

3. Yes, even if there is no equity in the house. Note that a partition action does not necessarily mean the property needs to be sold to a third party. You could end up buying out the other owner and become the sole owner, or alternatively, the court could reallocate the ownership percentages of each owner.

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Chi Leung Ip

Chi Leung Ip

Real Estate Attorney - El Monte, CA
Answered

Don't fight this type of action. Most judges will grant your husband's partition action. Instead, work out the sale of the house. If it is under water, work out with the lender through a short sale. Of course, the above advise is based upon that your ex is not under any court order to pay for your house payment or expenses as a part of his child support or spousal support. If there are on-going issues with regard the payments to the house related to child support or spousal support, you have to resolve your dispute in the family court where your divorce was finalized. Edward C. Ip www.lawyer4property.com

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