Legal Question in Real Estate Law in California
My parents divorced 11 years ago.During the divorce process the property owned by both parents was settled as :Father to be two-thirds ownership and Mother one-thrid ownership.Currently the property is being used as rental property, Father receiving two-thirds of the rental income and Mother receiving the remaining third of the rental income.Problem is that Father has decided to make all decisions regarding the property ie: rental income,rental maintenance among other things.Father states that he has the power to make all decisions.Mother relies on her third of the rental income to make a living.Father does very well with or without the rental income.Father has decided to lower the rent well below the current rate for this tenant and says mother has no say so.Is this accurate?Does mother have any options at all (Possiblly force a sale) ? Any suggestions would be appreciated.
1 Answer from Attorneys
The law provides a process called "partition" to end unhappy property co-ownership situations. The name for this special kind of lawsuit derives from older times when it was often used to divide up farms and ranches between the heirs by physical subdivision. We are a largely urban population now, plus we have zoning and restrictions on subdivision, so more often than not, partition is done these days by selling the property and "partitioning" (i.e., divvying up) the net proceeds of sale. So, if this property sold for $600,000 net of paying off any mortgages, commission, etc., your mother would pocket $200,000. The owners' shares will also be adjusted by the court, if necessary to be fair, to take into account past inequitable division of ownership costs and/or rental income.
Partition can be time-consuming and costly, but sometimes when one co-owner initiates the process by filing suit, that will result in a buy-out offer from the other, or at least an agreement to sell the property out-of-court. Sometimes the co-owners agree to an out-of-court settlement in which the property is sold and an arbitrator is used to hear arguments and decide how the net proceeds of sale should be shared.
Unless there is something in the marital settlement agreement or decree, or a private contract, I doubt your mother has a legal remedy other than partition. Even if this were a business partnership, which it probably isn't, the majority partner would be allowed, within reason, to set rents, etc. Co-owners of real estate have been held to be in a fiduciary relationship, which could be an alternative pathway to demanding fair treatment, but I'm somewhat skeptical that asserting a breach of fiduciary duty is the best pathway here.
There is always the possibility that Father is fibbing about the rent he's receiving, or maybe the tenant is his girlfriend, in which cases this is probably actionable as fraud, but I guess there is no evidence of either.
Related Questions & Answers
-
I just purchased a condo with "hard cash." In a "DEMAND LETTER"... Asked 9/06/09, 12:02 pm in United States California Real Estate and Real Property