Legal Question in Real Estate Law in California

Re: forced sale

probably

Re: forced sale

If you are joint owners, she could sue for partition. Talk to her to see if you can work out an agreement since it would cost her about $10,000 in legal fees to get a court order, she would have to pay a realtor 6% of the sales price, and the housing re-sale market is very low now. So she might be willing to sign an agreement that you can buy her out over a period of time or the sale is delayed for a time. Remember that there is no common law marriage in California so there is no community property between you. Absent one of you agreeing to take care of the other, what she earned and brought into the relationship is hers, what you brought yours. It is the same as if you were business partners

Re: forced sale

Yes, it is called a partition action.

Re: forced sale

In order to provide unhappy co-owners a means to unwind their situation, the Legislature has passed statutes providing for a special kind of lawsuit called a "partition action." It is codified in the Code of Civil Procedure as sections 872.010 through 874.240 - about ten pages of fine print. Here are the basics:

Partition actions got their name from the former practice of splitting co-owned property between the unhappy co-owners by physical subdivision. This practice worked well in the 18th and 19th Century when most properties were farms and ranches and there were few if any zoning and subdivision laws. This still works occasionally, but most often partition is done by a court order requiring the sale of the property and division of the net proceeds between the former owners in proportion to their adjusted interests in the property.

The judge will often assign a referee to assist in deciding what allocation of the proceeds of sale is "fair" by taking evidence and going over each owner's past contributions to items such as mortgage principal and interest, property taxes, insurance and necessary repairs. The court can also oversee the sale process if necessary, but more often the parties are able to agree to use a particular real estate broker, pricing strategy, etc. to protect their joint interest in getting the best price and avoiding a courthouse-steps auction kind of sale.

The partition suit is a two-step process and starts with a trial to determine the plaintiff's right to partition. There are very few defenses to a partition suit, so this step is usually pretty perfunctory (but see below). If the plaintiff is found to have the right to partition, the court will issue an interlocutory decree of partition, and the sale will go forth. When it is known what the sale produced, the court will reconvene to take evidence on, and make orders for, the proper distribution of the net proceeds of sale ("net proceeds" being what is left over after paying off all liens on the property, commissions, costs of escrow, and the like), taking into account the adjustments mentioned above.

Defenses to partition include waiver of the right by the plaintiff, which can occur because, for example, the plaintiff has expressly or impliedly given up his right to partition, as by giving the co-owner an option to buy him out or a right of first refusal, or that the parties have entered into a contract for development of the property where a third party's rights are involved.

Finally, I might add that a lot of partition suits are resolved soon after they are filed, when the defendant relaizes that defending is expensive and voluntary out-of-court settlement is quick, easy and cheap. The settlement may involve one party buying out the other, or a private sale outside court jurisdiction, perhaps with the cash issues to be resolved by arbitration.