Legal Question in Real Estate Law in California

can one party on a jointly held property sell the property


Asked on 10/25/12, 9:06 am

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Rarely. The right to sell someone else's interest would have to be granted in a written instrument of some kind, or by a court for good cause.

Ordinarily, a co-owner of real estate can sell his or her share, but not the other owner's share. Since the market for part interests with strangers is generally lousy, such sales seldom take place except in unusual circumstances, but they are legal.

When a co-ownership (joint tenancy, tenancy in common, or sometimes a partnership) goes sour, one unhappy co-owner can and often does go to court to seek what is called "partition" of the jointly-owned property. The name comes from the prior (19th Century and earlier) practice where farms and ranches would be subdivided (partitioned) between heirs. Real property can still be partitioned by actual subdivision when practical, but in the 21st Century, with most land being urban and/or subject to zoning and other laws restricting further subdivision, the more common method of partition is "partition by sale." In partition by sale, the court orders the property to be placed on the market, and when it sells, the liens and costs are paid and the remaining balance is divided among the former co-owners according to their adjusted interests, as found by the court. A half owner's share might be more or less than 50% of the net, if that half owner had paid more or less than his/her/its fair share of certain costs, such as mortgage bills, insurance, necessary repairs, etc.

Many lawsuits that are brought to force partition don't go all the way through the court process, but are settled out-of-court when the defendant sees the handwriting on the wall. Most co-owners would rather agree to a private buy-out or sale deal than see a court-administered proceeding go to the same or similar conclusion, but at greater expense.

When there is no equity in the property, some interesting problems arise in distribution of the proceeds of the partition sale. Generally, it turns out to be a short sale, in which the lender eats the shortfall.

I'd be happy to discuss your particular situation in more detail if you'll contact me directly with some particulars about the property and the co-owners. I see from your Zip code that we're in the same county.

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Answered on 10/25/12, 9:34 am

Yes, but not easily. The two options are to sell only the share the one party owns, or force a sale by judicial action. A person can always sell a partial interest in a property, if they can find a willing buyer. The trouble is that few buyers are interested in buying a partial share in a property and winding up essentially partners with the other owner who they don't even know. If a buyer can be found, they pretty much never will be willing to pay the full fractional share of the market value of the entire property, due to the hassle factor and risk of buying into a joint ownership with the other owner. Realistically, only in the commercial real estate market where joint owners agree that one will sell their share and the other owner cooperates in the sale, forming a new co-ownership arrangement with the buyer, or in private "friends and family" transactions, do you see successful sales of fractional interests. The other option is to file what is called a "partition" action. In old days when two owners of a single parcel wanted to part ways, they could petition the court to equitably divide the property into two new parcels. Of course with modern subdivision laws and zoning and planning regulations, the courts can no longer just divide a parcel, but the term partition remains. What the court now does is "partition by sale." That means that if the parties cannot agree to sell the property cooperatively, or one buy the other out, either party can obtain a court order that the property be sold, just like a foreclosure or judgment lien sale. The proceeds are then divided, with each party entitled to ask the court for certain adjustments to the division based on who put how much money into the equity in the property during the purchase and joint ownership. The court then distributes the proceeds according to its determination of who is entitled to what final portion of the sales price. Of course foreclosure sales always bring far less than the full market value of the property, and the same is true of partition sales. So invariably even if one party has to file a partition action, the parties eventually settle on a cooperative sale or a buy-out of one by the other, rather than waste money running up attorneys fees and getting less than market value for the property. Although partition actions are not very common, I have handled several in my career. So if you think that will be necessary in your situation, please feel free to contact me for a no-obligation consultation.

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Answered on 10/25/12, 9:41 am


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