If you own a piece of California real estate with one or more other people, what do you do if you want to sell the property but your co-owners do not? The answer may depend on how you acquired joint ownership. If you and your co-owner(s) acquired the property through inheritance, a partition suit may be your best option.
The Uniform Law Commission explains that under The Uniform Partition of Heirs Property Act, if your father, for example, bequeathed the family farm to you and your three siblings in his will, all of you are tenants in common. This means that all four of you have equal rights to use the property.
While all of you have the equal right to use the property, each of you also has the following individual rights:
- To deed your portion of the property to someone else
- To mortgage your portion of the property without the consent or approval of your co-owners
- To force the property’s sale via a partition action in court
If you file a partition action, the court has two basic options: partition-in-kind and partition-by-sale. In the former, the court physically divides the property into four equal parts and gives each of you full ownership of your respective part. As you might expect, partition-in-kind often is unfeasible. Consequently, partition-by-sale represents the solution courts apply most often.
In a partition-by-sale, the court orders you and your co-owners to sell the property as a single parcel and divide the sale proceeds. Since you and your siblings each owns an undivided one-fourth interest in the property, what this means is that each of you will receive one-fourth of the sale proceeds.
Traditionally, partition-by-sale had two main problems. First, any co-owner(s) opposing the sale had little if any recourse. Second, partition sales seldom garnered anywhere near fair market prices.
The Uniform Partition of Heirs Property Act solves such problems. Here the court must determine the property’s overall fair market value via an independent appraisal. Then your co-tenants have the right of first refusal, meaning one or more of them has the opportunity to buy out your share before anyone else. Only if none of them exercises their rights can the court order a sale on the open market. Even then, the court must specify a sales price no lower than the property’s court-determined value.
This is general information and not intended as legal advice.