What is a partition action?
A partition action is a court case that ends co-ownership of property, either by physically dividing it or by selling it and dividing the money. It’s the legal answer to how to force the sale of a property with multiple owners when they can’t agree.
Each state has its own partition statute. California’s is in Title 10.5 of the Code of Civil Procedure, starting at Section 872.010. The basic shape is similar almost everywhere: a co-owner files, the court decides who owns what and how to partition, and then it oversees the division or sale.
It comes up most with inherited property. One heir wants to keep the building, one wants the cash, and one never answers the phone. Partition gives any of them a way out.
Partition in kind vs. partition by sale
Partition in kind means the court physically splits the property among the owners, while partition by sale means the court orders the whole property sold and divides the net proceeds. Many statutes say they prefer division in kind, but for buildings a sale is the usual result.
In California, Section 872.820 tells the court to order a sale when the parties agree or when a sale would be more equitable than division. An apartment building almost always fits. You can’t give one heir the roof and another the boiler, and carving a building into separate parcels or condos means surveys, maps and approvals that rarely make sense.
| Partition in kind | Partition by sale | |
|---|---|---|
| What happens | Property is split into separate parcels | Whole property is sold, proceeds divided |
| Common for | Vacant land, farmland, large lots | Houses, apartment buildings, mixed-use |
| Main drawback | Parcels may be worth less than the whole | Court sales can bring a lower price |
Who can file a partition lawsuit?
Generally, any co-owner can file a partition lawsuit, whether they hold 5% or 95%. That includes tenants in common, which is how most heirs hold title, and joint tenants with a right of survivorship.
California’s Section 872.210 lets any owner of a concurrent interest in real property file, but spouses can’t use it to partition community property.
If an LLC or partnership owns the building, the heirs own company interests, not real estate, so the operating agreement controls. A signed agreement that waives partition or sets buyout terms is usually enforced.
How a partition action works, step by step
A partition case moves from filing to a court order on ownership, then to a sale or division, and finally to payout. A contested case can take more than a year.
- File the complaint: the co-owner sues all other owners and lienholders and records a notice of pending action (lis pendens) against the property.
- Serve and respond: every owner is served and can answer or object.
- Ownership ruling: the court decides who owns what share and whether partition is allowed. In California this is the interlocutory judgment.
- Referee and valuation: the court can appoint a referee to manage the division or sale, and heirs property laws require a court-determined value.
- Buyout window: where a buyout right applies, the other co-owners get a chance to buy out the owner who asked for a sale.
- Sale: the referee or a court-appointed broker sells the property, and the court approves the sale.
- Accounting and payout: the court settles credits between owners and orders the net proceeds paid out.
How much does a partition action cost, and who pays?
Partition costs are usually split among the owners by ownership share and paid out of the sale proceeds before anyone gets a check. In California, Section 874.010 says the costs of partition include reasonable attorney’s fees incurred for the common benefit, the referee’s fees and expenses, surveyor costs and the title report.
Section 874.040 tells the court to divide those costs in proportion to the owners’ interests, or in another way that’s equitable. Section 873.820 sets the order money comes out of a court sale: expenses of the sale first, then other partition costs, then liens such as the mortgage, and only then the owners.
Not every legal bill counts as common benefit. Fees spent fighting each other over who owns what usually stay with the owner who ran them up. Under California’s Partition of Real Property Act, Section 874.321.5 adds that the court shouldn’t charge partition costs to an owner who opposed partition unless that’s equitable.
The Uniform Partition of Heirs Property Act
The Uniform Partition of Heirs Property Act is a model law from the Uniform Law Commission that adds protections when family members inherit property together. An early-2026 American Bar Association Uniform Laws Update reported it had been enacted in 24 states, the District of Columbia and the U.S. Virgin Islands, with Michigan and New Jersey adopting it in 2025.
The act applies to heirs property, defined in Texas Property Code Section 23A.002, for example, as property held in tenancy in common with no written agreement on partition, where at least one owner inherited from a relative and at least 20% of the interests or owners are tied to family.
California went further. Its Partition of Real Property Act, Sections 874.311 through 874.323, extends these protections to all property held as tenants in common with no binding partition agreement, for cases filed on or after January 1, 2023.
- Court-set value: the court determines fair market value, usually through an appraisal, before any sale.
- Buyout right: owners who didn’t ask for a sale can buy out those who did at that value.
- Partition in kind gets a real look: the court weighs factors such as family ownership history and sentimental attachment, not just money.
- Open-market sale: if the property is sold, it’s generally listed with a broker at no less than the court’s value instead of auctioned on the courthouse steps.
How do buyout rights work?
A buyout right lets the co-owners who want to keep the property purchase the share of the owner who asked for a sale, at a price based on the court’s valuation. Under California Section 874.317, after the court sets value, any co-owner who didn’t request a sale has 45 days to elect to buy all the interests of those who did.
The price is simple: the value of the whole property times the selling owner’s fraction. If the court values a building at $3,000,000 and the owner who wants out holds 30%, the buyout price is $900,000. The buyer still has to raise the money, usually through a refinance, a loan or a partner.
Outside heirs property laws, there’s usually no automatic buyout right, but co-owners can always agree to one.
Worked example: splitting sale proceeds among three heirs
Sale proceeds are split by ownership share after sale expenses, partition costs and liens are paid, and then adjusted for credits owed between owners. Here is how it works for three siblings who inherited a 12-unit building as tenants in common: Ana owns 50%, Ben 30% and Cara 20%.
The building sells for $3,000,000. Sale expenses are $150,000, partition costs (referee, appraisal and common-benefit attorney fees) are $90,000, and the mortgage payoff is $600,000. That leaves $2,160,000 for the three owners.
While the case was pending, Ana paid $60,000 of property taxes and insurance out of pocket. Courts can order an accounting and credit an owner who paid more than their share of carrying costs, and California Section 872.140 allows this kind of compensatory adjustment. Reimbursing Ana first leaves $2,100,000 to split 50/30/20.
Ana ends up with $1,110,000, Ben with $630,000 and Cara with $420,000. Without the credit, they would have gotten $1,080,000, $648,000 and $432,000. In effect, each sibling carries the $60,000 in line with their share: Ana $30,000, Ben $18,000 and Cara $12,000.
| Step | Ana (50%) | Ben (30%) | Cara (20%) | Total |
|---|---|---|---|---|
| Sale price | $3,000,000 | |||
| Less sale expenses, partition costs, mortgage | -$840,000 | |||
| Net to owners | $2,160,000 | |||
| Credit for taxes and insurance Ana paid | $60,000 | $60,000 | ||
| Remaining split by share | $1,050,000 | $630,000 | $420,000 | $2,100,000 |
| Total paid to each owner | $1,110,000 | $630,000 | $420,000 | $2,160,000 |
| Without the credit | $1,080,000 | $648,000 | $432,000 | $2,160,000 |
Tax effects of a forced sale
A court-ordered sale is taxed like any other sale: each co-owner reports gain or loss on their share, using their own basis. For heirs, that basis is usually the building’s fair market value on the date of death under the stepped-up basis rule in Section 1014, so the taxable gain is often small.
In the example, say the building was worth $2,700,000 when the parent died. The $3,000,000 price minus $150,000 of sale expenses is $2,850,000, a gain of $150,000. Ana reports $75,000, Ben $45,000 and Cara $30,000. Under Section 1223(9) the gain is long-term no matter how soon after the death the sale happens. Paying off the mortgage doesn’t change the gain.
A co-owner who bought in years ago may have a low basis and owe depreciation recapture, and may be able to roll their share into a 1031 exchange if a qualified intermediary is in place before closing.
Alternatives to a partition lawsuit
The best alternative to a partition action is usually an agreed sale or buyout. It gets to the same place without court costs, a court-supervised sale or months of delay, and co-owners can settle at any point, even after a case is filed.
- Co-owner buyout: one heir buys out the others at an appraised value, often with a refinance or seller financing from the selling heirs.
- Negotiated sale: all owners agree to sell, sign a written agreement on price and timing, and split proceeds through escrow.
- Mediation: a neutral mediator helps owners settle value, credits and who pays what, often in a day or two of sessions.
- Sell to a direct buyer: a buyer who purchases the whole building as is, sets one price and closes on a fixed date removes most of the issues owners fight about.
How this works for a 5+ unit apartment building
For an apartment building, a partition sale is almost always a sale of the whole property, and the price turns on the building’s NOI and the market cap rate, not on what the heirs think it’s worth. A court-appointed broker or referee markets it, and tenants and leases stay in place.
Buildings caught in a dispute often have deferred maintenance, below-market rents and messy books. That limits what a financed buyer can pay, since the loan is sized on DSCR. A buyer who underwrites the building as is can give the owners a cleaner number to agree on.
Selling a co-owned building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units nationwide, including inherited buildings with several owners. We make one offer for the whole building, so no heir has to buy out another, and escrow pays each owner their share under instructions all owners sign, including any credits you agree on.
If a partition case is already filed, an agreed sale can be presented to the court to end it. Send the address and unit count through the form on this page or call (469) 660-2977. We typically respond within 48 hours.
