Co-Ownership Trials and Tribulations:
Quiet Title Actions Vs. Partition Actions
Who owns the real estate and who can sell it? How much should each person get? There are many situations in which two people may co-own a property, the most obvious being a married couple. Since California is a “community property” state, if that couple divorces, all assets are split 50/50, so either the property is sold and the proceeds are split, or the couple needs to come to some arrangement where the party retaining the property compensates the other party for their take in the property.
That can get complicated enough, but there are much more complicated situations. What if you aren’t married? What if you buy a house with a significant other, you each put in an equal share of the mortgage, but only one of your names is on the title? Perhaps one person’s credit is better, or perhaps you simply don’t know that your name should even be on the title. Not everyone is a real estate attorney after all, and we can be very trusting in love.
Friends might buy a property together as well, a parent might go on title for their child, or business partners may buy commercial property together. Such partnerships aren’t so different from a romantic relationship, and when things go south, property is often the most valuable and complicated asset at stake.
What do you do if you find yourself in one of these scenarios? First, talk to a real estate attorney! Depending on the situation, though, your attorney may file either a quiet title action or a partition action, or very possibly both.
In a quiet title action, you ask the court to establish the proper legal title based on the evidence. So in our example of the unmarried couple, each contributed half the money toward the mortgage, so each should have an equal share of the property, but there is only one name on the title. Let’s say Brad’s name is on the title, but Janet’s name is not. Janet’s attorney files a quiet action where evidence is presented that demonstrates Janet’s contribution to the mortgage. This may include witnesses and documentation that show “clear and convincing proof” that Janet also has a claim to the property (Evid. Code §662). This is a high burden of proof for a civil case: the evidentiary presumption is that because Brad has legal title, he also has full beneficial title. If successful, however, Janet’s name can be added to the title and will have equal right to use or sell the property.
Why is it called a quiet title action? You can read more in our previous post here.
A partition action means that one of the co-owners files a petition for partition, which asks that a real estate property be divided fairly between all co-owners. In essence, a partition action is used by one party to force the sale of the property. In our scenario, once Janet’s quiet title action gives her an established and equal claim to the property, she may want to sell the property in order to receive her share. Brad may want to hold on to the property, however, and continue living there. Ideally, Brad and Janet would negotiate some way for Brad to buy out Janet’s share. However, if negotiations fail, the partition action can force a resolution. A petition to partition should be a final, not a first, resort, however.