California’s partition law underwent significant changes when the Legislature adopted the Uniform Partition of Heirs Property Act (AB 633), codified in Code Civ. Proc. §874.311 et seq. This law in California fundamentally restructured how co owners of inherited property and jointly owned property can divide or sell real property following a death. The new framework aims to address devastating land loss by allowing families to retain co owned property through a structured partition process that emphasizes fair treatment, transparency, and equal opportunity for every property owner involved.

Before this new law, any co owner could initiate a partition action in superior court, often resulting in a forced sale of the subject property, regardless of whether other owners wanted to keep it. Under AB 633, California has effectively reformed its property law to balance liquidity and legacy.

Understanding California’s Real Property Act and the Reforming of Property Law

The Real Property Act governs ownership and transfer of real and personal property in the state, forming the foundation for partition of real property when multiple parties share ownership. Prior case law treated a partition complaint as a matter of right. This meant that any one co owner could demand that the appropriate court order the property sold if it could not be divided without material loss in value.

This absolute right frequently led to the liquidation of family land, with proceeds distributed among co owners based solely on their percentage interest. In practice, this resulted in widespread devastating land loss, particularly for heirs unable to fund a buy-out. Recognizing these inequities, the Legislature enacted the Heirs Property Act. The new system allows other owners to retain the asset through a defined first refusal process before it reaches the open market.

How California’s Partition Law Works Under the Heirs Property Act

When one co owner files a partition complaint under the Uniform Partition of Heirs Property Act, the superior court must first determine whether the property qualifies as heirs property. If the court determines that it does, several relevant factors and procedural safeguards apply under the statute.

Step 1: Independent Appraisal

The court appoints a neutral appraiser to establish the property’s fair market value. This appraisal ensures transparency and prevents undervaluation of the subject property. The appraised value becomes the benchmark for any subsequent buy-out or sale proceeds division.

Step 2: Right of First Refusal for Co Owners

Before ordering a partition by sale, the court provides co owners the opportunity to buy out the interest of the party requesting sale. The purchasing parties must deposit funds equaling the fair market value of the interest with the court within the specified timeline. This process grants property owners a practical means to preserve co ownership without resorting to an immediate forced sale.

Step 3: Partition in Kind Before Sale

If the buy-out is not completed, the court must evaluate whether partitioning property physically is feasible. A partition in kind—a physical division of the real property—is preferred whenever possible. Only if the court determines that such division would cause great prejudice to the parties will it order a partition by sale. This ensures that liquidation is a last resort rather than a default outcome.

Practical Implications for Property Owners and Heirs

The partition process under the new law has brought significant clarity for property owners, trustees, and beneficiaries navigating co ownership disputes. For those wishing to retain an inherited property, the Heirs Property Act provides a window to secure financing and acquire full ownership interest.

However, buyers must comply with strict procedural timelines, including filing election notices and depositing funds. Missing these deadlines may allow the court to proceed with a partition by sale, at which point the property may be sold and sale proceeds distributed among the owners according to their respective interests.

For co owners seeking to retain real property, obtaining access to capital within the statutory timeframe can be challenging. Private lenders in California like HCS Equity provide short-term bridge financing that allows heirs to fund the buy-out based on the appraised value determined by the court. These loans are typically secured by the subject property itself and can be repaid after title consolidation or refinancing.

How the Court Determines Fair Market Value

The superior court relies on the independent appraisal to establish the property’s fair market value, but the process may involve additional hearings if parties contest the valuation. The court reviews relevant factors including current market conditions, comparable sales, and property condition to ensure an accurate assessment.

If any co owner disputes the appraised value, the court can appoint additional experts or consider supplemental evidence. This process underscores the law specific to California’s partition framework, emphasizing due process, equitable outcomes, and transparency across all partition actions.

Partitioning Property and the Role of the Superior Court

Once valuation and elections are complete, the superior court determines the most appropriate resolution based on the circumstances. A partition in kind results in each owner receiving an individual portion of the property, where feasible. In instances where division is impractical, the court may approve a sale of the subject property, ensuring that the sale proceeds reflect fair market value and are distributed proportionally to each interest holder.

This modernized approach reflects California’s continued effort to reform property law while safeguarding family equity and mitigating devastating land loss that occurred under prior case law.

Why California’s Partition Law Matters

The Uniform Partition of Heirs Property Act not only updates property law in California but also promotes stability in property ownership and community wealth preservation. By reducing the frequency of forced sales, the law allows property owners to maintain generational control and continue building wealth through retained real property assets.

While other states have adopted similar statutes, California’s version aligns closely with local real property valuation standards and court oversight procedures, ensuring the partition of real property proceeds under equitable and market-based principles.

Protecting Inherited Real Estate Under California Law

California’s partition law represents a major step in reforming property law, promoting fairness and preserving family equity in co owned property. For those involved in partition actions or managing inherited real property, the Uniform Partition of Heirs Property Act establishes a clear, court-supervised path toward resolution based on fair market value and equal opportunity.

For heirs and property owners seeking to retain ownership but requiring fast access to capital to complete a buy-out, HCS Equity offers private real property financing tailored to meet court timelines and compliance requirements.

Contact HCS Equity today to learn how private capital solutions can help you navigate partitioning property and preserve your property ownership under California’s partition law.