Partition In Kind V/S Partition By Sale
If co-owners of a property find themselves unable to resolve a dispute, one of the owners usually approaches the court to file a partition lawsuit – which serves to terminate the co-ownership by dividing the property.
Under California law, partitionaction may be of two types:
- Partition in kind
- Partition by sale
California courts were traditionally big advocates of the partition by kind method as partition by sale consumed a lot of time and money. However, over time, the impracticality of splitting physical property reared its head, which led courts to look more favorably upon partition by sale instead.
Partition in Kind
Under this option, the court orders that the physical land or property is to be equitably divided between the owners. This is also referred to as actual partition. This option is viable when the property can be divided into equal parts. For example, two identical houses on a plot can be split among two co-owners of the plot, but a family home cannot be split with the same ease.
Land may be divided among the owners depending on factors including ownership shares and investments etc. For example: a co-owner with a smaller stake in the land will receive a proportionately smaller share. The division also depends on the expenses undertaken by each owner for improving the property. Land is seldom split on the area alone.
The value of the land is determined by a number of factors, including:
- The structures on the land
- The fertility of its soil
- Its proximity to a main road
Partition by Sale
Also known as partition by licitation, this method involves putting the property on the real estate market and then distributing the amount received from its sale among the owners. This method is chosen for its practicality as the value of the entire property exceeds that of its parts.
Partition by sale is a method that is used by co-owners to arm twist the other owners into selling the property. The court allows co-owners who are reluctant to sell the property to circumvent this by buying out shares of the owner who wishes to make the sale.
Partition by allotment is another option wherein the court allows the ownership of the land or property to be transferred to one owner, provided that he pays his co-owners the worth of their stake in the property. This is invoked when one co-owner enjoys a larger share of the property.