Legal Question in Real Estate Law in California

You can't change a deed. A deed is a document that establishes a transfer of ownership at a point in time. Once it is given and recorded it is nothing but an historical record of the transfer. You can remove someone from title to property by another deed or by a court judgment.

First, let me say that three-way joint tenancies are unusual. I'm curious as to how this came about. Much more often, three-way ownership is held as a tenancy in common.

Anyway, the answer is yes, there is at least one legal process for terminating multi-party ownership of property when one or more of the co-owners becomes displeased with the situation. The usual way is for one or more of the co-owners to initiate a special kind of lawsuit called a "partition" action. This asks the court to order the property divided. In the past, the court would draw new boundaries through the farm or ranch, creating separate parcels for each of the soon-to-be former owners. That's how the action got its name. Nowadays, with small urban lots with houses, zoning laws, laws regulating subdivision, etc., this is usually impractical, so instead the court orders the property sold and the net proceeds divided, after paying off the liens and adjusting the net amount for excess costs borne by one or another of the former owners.

Many partition suits are settled before they go to court for an order of partition or before the final distribution of the sale proceeds. This is because, once sued, the defendants usually agree to settle, either by someone buying someone else out, or by agreement to sell the property out of court. Sometimes, in addition, the parties agree to arbitrate any remaining money issues between them along with the buyout or private-sale agreement.

Removing a co-owner from title (not "the deed") and removing them as a co-borrower on a loan are two quite different matters. One can be an owner without being liable on a loan, and vice-versa, and lenders often won't release a co-borrower just because the co-borrower is no longer a co-owner (this happens more often in divorce property settlement situations). Partition usually solves the co-borrower problem as well as the co-ownership problem because the loan is paid off before any money is distributed to the sellers. This raises the question as to what happens when there isn't enough sale proceeds to pay off the loan because the property is "upside down" or "under water." My research on this has, surprisingly, not turned up a definite answer, but there are one or two cases that suggest the lender has to accept a "short" payoff and the sellers get nothing. Whether the lender then has a claim for the deficiency is unclear.

In very unusual circumstances, it might be possible to un-do the co-ownership by some other legal process.