Co-owning a property can offer numerous benefits, but it can also present challenges—especially when it comes to deciding whether to sell the property. In California, disagreements between co-owners (sometimes called "co-tenants" or "joint owners") over selling a house are not uncommon. When co-owners have different opinions about what to do with a property, navigating the situation requires careful legal and financial considerations. Below, we’ll explore the options available to California co-owners when there's a disagreement about selling a house.
1. Understanding Co-Ownership in California
Co-ownership generally comes in two forms in California:
Tenancy in Common (TIC): Co-owners hold an individual, undivided interest in the property. Each co-owner can sell or transfer their share without the consent of the others.
Joint Tenancy: Co-owners hold equal shares in the property. When one dies, the other automatically inherits their share (right of survivorship). A joint tenant can sever the joint tenancy by selling their interest, but this would convert the ownership to a tenancy in common.
When the property in question is co-owned under one of these arrangements and there's a dispute over selling, the law provides several ways to resolve the disagreement.
2. Negotiation and Buyouts
If co-owners disagree about selling the house, the first step should always be an attempt to resolve the issue amicably. Negotiation is often the most cost-effective way to settle disputes. Here are some potential outcomes of negotiation:
One co-owner buys out the others. If one party wants to keep the property and the others wish to sell, the staying co-owner can buy out the others' share. This avoids a forced sale and may preserve family or partnership relationships.
Agreeing on sale terms. Sometimes co-owners can agree on certain conditions to sell the house, such as waiting for a better market or agreeing to split the proceeds in a specific way.
Key Tip: Document all agreements made between co-owners to avoid future disputes.
3. Mediation or Arbitration
If co-owners are unable to come to an agreement on their own, they may consider mediation or arbitration. Mediation involves a neutral third party who facilitates discussions between co-owners to reach a voluntary agreement. In arbitration, an arbitrator hears the case and imposes a decision that the co-owners must follow.
Mediation is non-binding, meaning either party can walk away if no resolution is reached. Arbitration, on the other hand, is typically binding, meaning the parties must follow the arbitrator’s decision.
4. Partition Actions: The Legal Route
If negotiation or mediation fails, a co-owner has the legal right to file a partition action in California Probate Court to force the sale of the property. A partition action is a legal process where the court determines whether the property should be sold or divided.
Types of Partition:
Partition by Sale: The most common outcome when dealing with houses. The court orders the sale of the property, with the proceeds divided among the co-owners according to their ownership interest.
Partition in Kind: In rare cases, the court might physically divide the property. This is typically only feasible with large parcels of land, not single-family homes.
Process of a Partition Action:
One co-owner files a lawsuit requesting the court to partition the property.
The court will then evaluate whether the property can be divided or must be sold.
If a sale is ordered, the court will appoint a real estate agent to sell the property, and the proceeds will be distributed according to ownership percentages.
A partition action can be time-consuming and expensive, so it’s generally a last resort. However, it can be the only option if co-owners are completely at an impasse.
5. Consider the Costs
Selling a property in California—especially through a partition action—can incur significant costs, including:
Court fees for filing the partition lawsuit.
Attorney's fees for legal representation.
Real estate agent commissions and other sale-related expenses (e.g., inspections, repairs).
In a partition sale, the court may order that these costs be deducted from the sale proceeds before distribution among the co-owners.
6. Impact of a Partition Action on Special Types of Co-Ownership
Special rules apply when the property is held in a trust or as part of an estate under probate. For instance, if the property is held by a living trust, the terms of the trust may dictate how disputes are handled. Similarly, if the house is part of a probate estate, the California Probate Court may already be involved in deciding how the property is distributed among heirs. In these cases, the probate court will oversee the sale of the property, ensuring all interested parties receive their fair share.
7. When to Seek Legal Help
If you're involved in a co-ownership dispute in California and are considering a partition action or other legal recourse, it’s crucial to consult with an experienced California probate or real estate attorney. They can help evaluate your options, negotiate with other co-owners, and guide you through the legal process.
Conclusion
Disputes between co-owners can make selling a property in California challenging, but there are solutions. From negotiating buyouts to pursuing legal partition actions, co-owners have options to resolve disagreements. The key is to approach the situation with a clear understanding of California co-ownership laws and the costs involved. Whether you resolve the dispute amicably or in court, make sure to seek professional legal advice to protect your interests.
Contact Us for Legal Help
If you are a trustee and have questions about your responsibilities or how to properly administer a trust, contact the top-rated California probate attorneys Moravec, Varga & Mooney – today to schedule a telephonic consultation. Have questions, call (626) 460-1763 or email LV@MoravecsLaw.com.
Southern California Probate Lawyer Serving all counties in California, including Los Angeles, Riverside, San Bernardino, Sacramento, Santa Cruz & Beyond.
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