Doing business with relatives can complicate relationships. However, financial transactions with family members can become unavoidable, such as when siblings receive a piece of land as an inheritance.
If family members jointly own a piece of real estate but do not agree on what to do with the property, a partition action might be necessary.
What a partition action does
In California, when co-owners of real property disagree on whether to sell it, one party may force a sale in court through a partition action. California’s Civil Procedure Code Section 872.210 outlines a co-owner’s right to take this step.
If the court orders the sale of the property, the previous co-owners then share the money. People who can initiate this process include those who inherited property, divorced couples with joint property and business partners.
Partitioning can often become necessary after relatives receive a piece of real estate jointly as an inheritance. Additionally, with over 1.4 million family-owned businesses in California, partitioning can come into play when family members inherit stakes in a company but cannot agree on how to manage the organization or its assets, including real estate.
Ideas on how to handle the partitioning process
California defines partition procedures in three categories:
- Partition in kind divides the property into separate individual pieces
- Partition by appraisal involves selling the property after an appraisal, either to one of the co-owners or dividing the proceeds among the previous co-owners after a sale to a third party
- Partition by judgment requires a court decision on how to divide or sell the property
Lawsuits can take years to complete, especially with more contentious and complex disputes. The partition process may move along more speedily if the parties take practical steps.
For example, the party or parties bringing the suit should be aware of the types of ownership. Joint tenancy differs from tenancy in common as to rights of survivorship and if tenants may change. Understanding the type of ownership for a particular piece of real estate helps a person decide what to do with the land and whether pursuing a partition action is necessary.
Also, clear communication can eliminate or smooth the partition process. When family members openly discuss their intentions for the property and put these in writing, the parties can avoid disagreements and the need for partitioning.
However, if partitioning is necessary, the property co-owners may be able to handle the process through mediation, keeping the matter out of the courts. Otherwise, a partition action may be the only other recourse.