Partition by Appraisal

Partition by Appraisal – A Guide to Court-Ordered Property Buyouts 

Partition by appraisal is a specific legal method used to resolve real estate disputes that allows one or more co-owners to purchase the interests of others. It serves as an alternative to a forced sale or a physical land division.

Many people prefer this method because it keeps the property within the existing group. It is often the best choice when one owner has a close emotional attachment to the property and wants to keep the ownership rather than forcing a sale.  

We focus on partition-by-appraisal and can help you move through the process smoothly. Our attorney works to reach a fair outcome while protecting your interests.

Contact us today to talk about your situation. 

Basics of Partition by Appraisal 

A partition by appraisal is unique because it generally requires a formal written agreement. All parties involved in the lawsuit must consent to this specific method of resolution. Without mutual agreement, the court typically defaults to a partition by a public sale.

This requirement ensures that no owner is forced into a buyout against their will. The agreement must be filed with the clerk of the court to be valid. 

Once the parties agree, the court will appoint a neutral third-party partition referee to oversee the valuation process and the eventual ownership transfer. One of the first major steps is obtaining a professional appraisal of the property.

The appraiser determines the fair market value of the entire piece of real property. This value serves as the baseline for calculating what the buying owner must pay. If the property is worth $1 million, a half-owner must pay half.

Adjustments are often made for existing mortgages and previous maintenance costs. The court must approve the final appraisal report before any money changes hands. 

Advantages of Partition by Appraisal 

One primary benefit of this process is avoiding high marketing costs. Selling a home on the open market often involves expensive real estate agent commissions. A partition by appraisal eliminates these fees because no outside buyer is ever engaged.

It also protects the privacy of the co-owners from public showings and open houses. The timeline for this process is often shorter than a traditional home sale. 

This approach is especially valuable regarding inherited family homes or small businesses. For instance, three siblings inherit a house, but only one wants to live in it. The sibling who stays can buy out the other two at a price determined by the court. This means the other two siblings can quickly cash out on their equity. It also means that the family house won’t get sold to a stranger. 

However, the buyer must have the financial ability to complete the purchase promptly. They’ll have to get a new mortgage or draw some money from their personal savings to make the payment. If they can’t pay, the court may have to sell the house. The agreement usually sets a specific payment deadline. If they don’t make the payment by then, the partition process continues to the next stage. 

Legal requirements for a partition by appraisal vary slightly by state and locality. In California, the Code of Civil Procedure governs the specific steps of this action. Modern laws have made it easier for co-owners to initiate these buyout procedures, so experienced legal counsel is highly recommended to navigate the complex statutory requirements. An attorney ensures that all filings are accurate and your financial interests are protected. 

Partition by appraisal is an effective means of solving disputes over the divided ownership of real estate. It allows one co-owner to fully acquire the property while balancing the rights of those who wish to disengage with those who wish to remain.

Because the court utilizes an appraiser, the outcome is an unbiased solution. This technique is the best way to achieve closure to what can be an emotionally charged conflict. Contact our experienced legal team today to secure your fair share of property equity.