What about disputes involving real estate between multiple owners?
Sometimes, people purchase property or real estate together for various reasons. Sometimes, two or more people will buy a property as a business or proposed business, like buying an office where a business might be located. Alternatively, some people buy a property together in the hopes of making the real estate itself into a business, such as renting out the property for long-term rentals like renting out an apartment or home.
Other times, two or more people will buy a property with the idea that the property might serve as a short-term rental, like an Airbnb or a VRBO. People may also buy a property if they are both living there, even if they are not married yet. Sometimes, the property may become inherited by two or more people after the passing of a loved one. Regardless of why people buy property such as real estate together, sometimes disagreements arise.
Often, such disagreements about real estate arise when the owners have different desires about what to do about the jointly owned property. For example, one owner may want to sell the property and get any equity out of the property. Another owner may want to keep the property.
Sometimes the dispute is because one or more of the property owners may be handling all or a large amount of either the financial burden of the property or the management burden such as dealing with tenants. Sometimes, one person may move out of the area and not want to deal with the property any more.
When the parties cannot work out their issues on their own, then they may decide to file a lawsuit. In such complex legal matters, consulting with your San Jose business lawyer ensures your rights are thoroughly protected and your legal strategies are sound.
What do I do if the other property owners and I can’t agree on what to do?
Under the California Code of Civil Procedure, a co-owner of the property or owner via inheritance may start a partition action.
What is a partition action?
A partition action is an action or lawsuit to try to force the sale of a property where the co-owners do not agree to sell voluntarily. The partition is a cause of action or claim within the lawsuit.
What if I am owed money because I paid all the mortgage payments even though I’m only a 50% owner?
The way to try to make sure you are paid fairly during the dividing up of the proceeds from the sale, is to also seek an accounting cause of action. The accounting cause of action asks the Court to decide how much of the property proceeds you should get.
The Court would award a party who has paid more than their share of the property either more of the proceeds or pay that party back first before dividing the proceeds. Understanding the implications of legal delays, such as waiting time penalties, can further complicate financial settlements in these disputes.
What if I am worried the other party will sell the property while the lawsuit is pending?
When the lawsuit is filed for partition, a Lis Pendens (a Notice of Pendency of Action) is recorded on the property to notify people that the property is subject to a lawsuit. This Lis Pendens should stop most property sales or mortgage refinances from going through. This emphasizes the importance of enforceable contracts in real estate, which can be crucial in preventing or resolving such disputes. Also important after recording is to serve the lawsuit timely and to serve any professionals who might be involved with notice of the lien, such as real estate brokers, your co-owners, and others.
If there is a title company involved, it should also be notified of the issue in writing. Learn more about how our comprehensive real estate legal services can assist you during these critical proceedings.
