Legal Question in Real Estate Law in California

Re: Tic

There are about four issues here; I'll try to answer them all.

First, the legal process for breaking up a co-ownership situation is a special kind of lawsuit called an action for partition, or just partition. Back in the early days of California, when most folks lived on farms, a partition asked the court to divide the property into two pieces and deed one to each co-owner. Nowadays we have big houses on small lots, and laws severely regulating subdivision of land, so now courts will usually order the property sold and divvy up the net proceeds between the former co-owners in a proportion it finds fair after weighing evidence on the owners' relative contributions to carrying costs. The sale is usually done through a broker in the usual way; it's not a courthouse-steps auction like a foreclosure sale. Many partition suits are settled before final judgment by a buy-out agreement or out-of-court sale and money division.

Second and third issues: rent. While the co-owner out of possession (you) cannot demand rent from a co-owner in possession (your friend), you are entitled to your share of the net rents (after expenses) from third-party tenants.

Fourth item: Whether down-payment has any legal effect on percentage of ownership. Yes, it often does. Let's be sure we're talking about true down payment, however. Did your friend put up 1/10 of the down payment, or did she put up 1/10 of the price of the house as a down payment? In other words, if the house cost $300,000 with a 20% down payment, did she put up $30,000 or $6,000? The general rule is that ownership percentage follows contribution to down payment. but being "on the loan" means nothing. The consequence is that if she put up 1/10 of the down payment and you put up 9/10, you may arguably own 90% of the house, not 60%. This cannot be resolved without a close examination of the reasons why title shows you with 60%, not 90%, including whether you made a gift of the 30% not given you by recorded title; or perhaps there is a valid written contract specifying the 60-40 outcome, notwithstanding the 90-10 down payment contributions.

PLease feel free to contact me for further explanation.