1. WHAT DOES A PARTITION REFEREE DO?
2. TYPES OF PARTITION
- Partition by Sale or Partition by Appraisal
- Partition by Valuation
- Partition of Heirs Property
- The Partition of Real Property Act
3. IS THERE A DIFFERENCE BETWEEN A REFEREE AND A RECEIVER?
4. APPOINTING THE RIGHT PARTITION REFEREE IN CALIFORNIA
What Does a Partition Referee Do?
A partition referee is a neutral third party appointed by a court to oversee the partition or division of real or personal property. Partition referees are appointed in partition actions where co-owners are segregating and terminating their common property interests.
In California, joint owners of real property may file a lawsuit seeking to have their joint interest in the property partitioned. The need for a partition often arises in situations where there is a divorce or other break up or after a death where multiple parties have an inherited interest and are in disagreement as to their interests or how to divide them. It may also occur when multiple parties own a property that only one of them is living in.
One co-owner of the property in dispute will file a complaint with the court, which begins an action of partition. After an action is filed, the Court must determine whether the filing party has the right to partition. California Code of Civil Procedure Section 872.210. If the party has the right to partition, the Court will enter an Interlocutory Judgment ordering the partition of the property; determining the manner of partition (physical or by sale) – or delegating this duty to a Referee; and determining the interest of each party. California Code of Civil Procedure Section 872.210. One the partition is completed, whether physically or by sale, the Court enters a final judgment.
TYPES OF PARTITION
Partition by Sale or Partition by Appraisal
Usually, the court will order a division by sale unless the parties agree to partition by appraisal or the court determines a division in kind (i.e. physical division) is possible. Once this is determined, the court appoints a partition referee to handle the actual partition of the property. The partition referee may be authorized to employ attorneys, surveyors, engineers, and others to carry out the division.
Partition by Sale or Partition by Appraisal
Usually, the court will order a division by sale unless the parties agree to partition by appraisal or the court determines a division in kind (i.e. physical division) is possible. Once this is determined, the court appoints a partition referee to handle the actual partition of the property. The partition referee may be authorized to employ attorneys, surveyors, engineers, and others to carry out the division.
Partition by Valuation
If the parties agree, the property can be partitioned based on a valuation. There are a number of ways to do this, but generally an appraiser will be agreed upon, or the parties will submit names to the Referee and/or the Court, and one will be selected (of course, these parameters can vary based on the parties creativity and leverage); and after a final valuation is set based on the parameters agreed to, each party will be given a chance to buy the other out, and if neither does, the property will be sold and the proceeds divided based on ownership interests, other adjustments, and equity.
As part of the partition process, there will be an accounting of charges and credits to each co-owner’s share. Both plaintiff(s) and defendant(s) will want to seek reimbursement of money spent to maintain, improve or preserve property that benefits all co-owners. Credits can include expenditures in excess of the co-owner’s fractional share for necessary repairs, improvements that enhance the value of the property, taxes, payments of principal and interest on mortgages, and other liens, insurance for common benefit, and protection and preservation of title.
Partition of Heirs Property
The Uniform Partition of Heirs Property Act (UPHPA) modified the above statutory framework, effective January 1, 2022, creating a right for certain co-owners to force a buy-out based on an appraised value of the property. The UPHPA applies to “Heirs Property”—defined as property (i) owned at least 20% by relatives and (ii) where the interest of the party seeking to buy-out was acquired by a relative. California Code of Civil Procedure §874.311 Et Seq. (2021).
Under the UPHPA, when an action for partition is filed by a co-owner of inherited property, the other co-owners/heirs are provided with an opportunity to buy out the property at fair market value. The co-owner seeking to buy out the others’ shares must timely make an election with the court and timely deposit sufficient funds with the court.
The Partition of Real Property Act
In actions filed after January 1, 2023, the Partition of Real Property Act applies to all property held by tenants in common unless (1) they have an agreement not to partition the property, or (2) they have a written agreement specifying another procedure for partition of the property. Thus, unless an action was filed January 1, 2022 and December 31, 2022, or prior to that time period, the Partition of Real Property Act applies to all property held by tenants in common unless one of the above two exceptions applies, whether or not the property is “heirs” property. It does not, however, apply to property held by joint tenants.
The Partition of Real Property Act requires the Court to determine the “fair market value” of the property, subject to limited exception. After the fair market value is determined, the parties/cotenants that did not request a partition by sale are allowed to buy out the interests of those that did request a partition by sale. Subsequent to this buy-out process, if a party/ies duly completes the buy-out process, the Court will enter an order reapportioning the interests accordingly.
If no party elect to buy out the cotenants, the Court shall order Partition in Kind, unless Partition in Kind would result in great prejudice, in which case it shall order a Partition by Sale.
Is There a Difference Between a Referee and a Receiver?
Somewhat. Typically, a person appointed to take over a business is referred to as a Receiver. A Referee is typically appointed to primarily sell real property. However, part of a Referee’s assignment usually includes managing the property prior to selling it. This may include collecting rents, maintenance, making repairs and potentially improving the property to maximize the sale. Thus, a Referee is responsible for running the business of managing the property. A Referee is a form of Receiver, and they are not mutually exclusive terms.
APPOINTING THE RIGHT PARTITION REFEREE IN CALIFORNIA
When seeking the appointment of a partition referee, it is important to find a firm that has knowledge of property law, litigation, and real estate markets. ANAND LAW has in-depth knowledge of all three, which allows us to resolve partition disputes quickly and fairly for all parties involved.
We have experience to deal with any issue that may arise in a partition action, including: corporate ownership, sale of attendant business, unlawful detainer (evictions), quiet title, boundary disputes, TIC properties, tenant properties, unexpired leases, hazardous materials, code violations, mechanics liens, unrecorded easements, and HOA regulations. We ensure that all potential pitfalls are accounted for in order to resolve your situation with finality.
We have a network of agents throughout Southern California which allows us to provide hyper-localized expertise of the markets, and maximize value for you and your clients. We also routinely work with a variety of developers, contractors, brokers, agents, investors, family offices, experts (including construction, geology, and handwriting), appraisers, notaries.
See more:
Partition Law Past and Present: The Partition of Real Property Act and its Predecessor The Uniform Partition of Heirs Property Act
California Partition Referee?
Distribution of Proceeds from a Partition Sale: Expenses, Costs, Fees, Liens…and Adjustments Based on Equitable Considerations
An Overview of Quiet Title and Partition
ANAND LAW is composed of attorneys, business/financial strategists, and real estate brokers. We act as a court appointed Partition Referee throughout California, including in the cities and areas of Los Angeles, Pasadena, Arcadia, Burbank, La Canada Flintridge, Covina, West Covina, Downey, Santa Monica, Glendale, Eagle Rock, Hollywood, Atwater Village, Echo Park, Glassell Park, Loz Feliz, Silverlake, Highland Park, Boyle Heights, Hancock Park, Cheviot Hills, Koreatown, Miracle Mile, Mid City, Venice, Van Nuys, Encino, Studio City, Sherman Oaks, Panorama City, North Hills, West Hills, Thousand Oaks, Calabasas, Granada Hills, Long Beach, Glendora, Anaheim, Inglewood, Santa Ana, Beverly Hills, Pomona, Marina Del Rey, Playa Del Rey, Mar Vista, Culver City, Cheviot Hills, Holmby Hills, Westchester, El Segundo, Hermosa Beach, Redondo Beach, Manhattan Beach, Huntington Beach, Orange, Irvine, Costa Mesa, Newport Beach, Moorpark, Fresno, Stockton, San Francisco, Berkeley, and communities throughout Los Angeles, Orange, Santa Barbara, Riverside, San Bernardino, San Luis Obispo, San Diego, Ventura, San Francisco, Alameda, and Mendocino Counties.
The information on this site is provided for informational purposes only and does not constitute legal advice. The information contained is not intended to be a complete recitation of the law, and is provided only as general information in an area—it may not contain all nuances of the law, and is not guaranteed to be correct or complete. ANAND LAW PC (“ALPC”) expressly disclaims all liability in respect to actions taken or not taken based on the information contained in the FAQ.
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