A partition action is the procedure for segregating and terminating common interests in the same parcel of real property, resulting in either: (1) a physical division of the property; (2) a sale of the property and a division of the proceeds; or (3) a partition by appraisal whereby one cotenant acquires the interests of the other cotenants based on a court ordered and supervised appraisal. California courts have established that consent by cotenants is not required to partition a property by sale because the right to partition is absolute. For owners of real property where title is held in a cotenancy capacity, the prospect of another cotenant seeking a partition and forced sale of the property can be nightmarish. The Partition of Real Property Act (“Act”), which applies to partition actions filed on or after January 1, 2023, should allow such non-petitioning cotenants to rest a little easier.
The Act, codified at §§ 874.311-874.323 of the California Code of Civil Procedure, is designed to prevent dispossession of property by way of a forced sale by replacing the Uniform Partition of Heirs Property Act (“UPHPA”). The UPHPA applied to “heirs property” for which there was no written agreement governing partition among the owners. The UPHPA had preserved the right of a cotenant to sell their interest in inherited real estate, while ensuring that the other cotenants had the necessary due process to prevent a forced sale: notice, appraisal, and right of first refusal.
The Act maintains this same goal while expanding its application to “real property held in tenancy in common where there is no agreement in a record binding all the cotenants which governs the partition of the property.” Put plainly, the Act removes the condition under the UPHPA that required the property to have been inherited property, thus expanding the scope of partition actions far beyond those included in the UPHPA and allowing for added opportunities for non-partitioning parties to purchase the partitioning parties’ interest through partition by appraisal.
Except where (1) the cotenants have agreed in writing to the value of the subject property or (2) the court determines that the evidentiary value of an appraisal is outweighed by the cost of the appraisal, the court determines the fair market value of the property by ordering an appraisal. Where the court orders an appraisal, the court must appoint a disinterested real estate appraiser licensed in the State of California to determine the fair market value of the property, assuming sole ownership of the fee simple estate. Not more than ten (10) days after such appraisal is filed, the court then sends notice to each cotenant with a known address, stating all of the following:
(1) The appraised fair market value of the property;
(2) That the appraisal is available at the court clerk’s office; and
(3) That a party may file with the court an objection to the appraisal not later than 30 days after the notice is sent, stating the grounds for the objection.
Cal. Code Civ. Proc. § 874.316(e).
Thereafter, the court conducts a hearing to determine the fair market value of the property at least thirty (30) days after a copy of the notice of appraisal is sent to each cotenant with a known address, whether or not an objection to the appraisal is filed. In addition to the court-ordered appraisal, the court may consider any other evidence of value offered by a party. Finally, after the hearing but before considering the merits of the partition action, the court must determine the fair market value of the property and send notice to the cotenants of such value.
Whether used to resolve a dispute between co-owners, avoid potential issues with a new, unknown cotenant, or simply as a method of further investment, the Act now provides non-heir cotenants with a clear path to buy out their fellow cotenants’ property interest. As a practical matter, it is recommended that cotenants agree in writing to the method of valuation to be used in the event of a future partition action, rather than relying on the court and its chosen appraiser.
 Conf. of Comm’rs on Uniform State Laws, The Uniform Partition of Heirs Property Act – A Summary, 2010.
Authored by Reuben, Junius & Rose, LLP Attorney Michael Corbett.
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.