Legal Question in Real Estate Law in California

Re: Partition Lawsuit Questions

OK, a tenant in common has an absolute right to end the co-ownership through a partition lawsuit. However, this right can be lost through waiver, and the courts have often found that granting a right of first refusal is a waiver to the extent that partition conflicts with the other owner's opportunity to exercise the right. Does or did the other owner also have a buy-out right against you? If so, perhaps there is a cloud upon your right to seek partition, and I think that's the first issue you have to grapple with.

Bringing a partition suit starts a process that can be over in five days or drag on more than five years. At the short end of that spectrum, the mere filing of the suit results in a negotiation followed by a quick out-of-court settlement. At the long end, final resolution could take five years, rarely more (when, e.g., there are appeals). I guess 9-12 months might be typical, and that includes a high percentage of out of court settlements. Fully litigated cases may average more like two years.

The allocation of attorney and court fees is a bit complex. Generally, each party pays its own attorney fees unless there is a contract to the contrary, except that legal fees and other costs for the common good are proratable or fully reimbursable in some situations. There are many rules that interplay here; without a long-winded dissertation, best to assume that costs will be allocated "fairly" by the court, whatever that may mean.

Sales pursuant to a partition decree are not usually courthouse-steps auctions as in a judicial foreclosure. Courts usually try to set up procedures that result in sales under normal market procedures, including listing on MLS and taking time to solicit and screen offers. The objective is to get full market value, not to allow one co-owner to get a bargain.

There is no conflict; the court will likely ignore your desire to buy out the co-owner at a bargain price. You will be bidding against the rest of the market, one way or another; again, unless you have a pre-existing, valid contract with your co-owner that calls for a different result. In that case, the court would presumably enforce your contract rights.

Re: Partition Lawsuit Questions

You could both spen thousands of dollars to acheive the same thing that would result in the end.

My suggestion is that you sit down with someone who is knowledgable about real estate, shared ownership and perhaps even taxation (there could be tax ramifications for both of you).

You will not get a bargain, and your partner will not get a premium. Your partner is entitled to fair market value of the property. Sit down with someone together before taking the measure of a partition action.

Re: Partition Lawsuit Questions

Is there a partnership agreement? If so, that's the first place to look for each partner's respective rights and obligations. If not, then you generally have the right to sell your 1/2 TIC share and so does your partner. You also have the right to partition, in which case the house will be sold for fair market value and the profits will be split. In all likelihood, this is a case where settlement would be best. In addition, you may be able to negotiate a less than full value price for your partner's share. Money now is better than money later. Give me a call to discuss this further. (949) 548-1700(The call is free). I also run a mortgage and real estate company.