Legal Question in Real Estate Law in California

Re: Follow up to: How much does partition action costs?

This was asked before and I already answered.

Re: Follow up to: How much does partition action costs?

After looking at the answers, I assume you are referring to Mr. Guerrini's answer. He should probably explain it himself, but I'm pretty sure I know what he meant:

In a partition, the court will divide the net proceeds in proportion to ownership, probably 50-50 in your situation; HOWEVER, the parties will be entitled to receive, or required to give up, adjustments to the otherwise 50-50 settlement, amounts called "contribution" or "reimbursement" to reflect various adjustments that should be made in fairness to one another, such as outlays in excess of the percentage of ownership for mortgage payments (principal and interest), property taxes, insurance, and necessary repairs. If the party in possession received net profits from third-party rents or from farming the lands, a share of the profits would usually be payable to the other former owner.

In the case you describe, such adjustments would be made only to outlays in excess of 1/2 made AFTER the date of the gift of the 50% ownership.

The theory is that co-owners, irrespective of which is in possession, should share the necessary costs of ownership equally.

If an owner in possession makes improvements to the property, the co-owner out of possession is not required to contribute 1/2 unless the two of them agreed beforehand to make that improvement, or in some cases if both ultimately benefitted. However, if A had painted the kitchen yellow and later B, now in sole possession, paints it green, that expenditure probably needn't be shared when the net dollars are divided.

So, just remember, a partition action results in the net equity in the property being divided according to demonstrated ownership percentage, subject to all manner of equitable offsets for items as discussed above; the whole purpose being to do justice to all parties and not follow a ritualistic percentage formula.

The issue becomes very significant in an era where the net equity in a partitioned property may be very low in proportion to a party's claims for expense outlays in excess of ownership percentage.

By the way, the term is "GRANT DEED."