Court-Appointed Partition Referees and Post-Judgment Receiverships
Business relationships sour, married couples split up, and family members can’t agree on what to do about a property they share. When these situations can’t be resolved through other means, the courts may appoint a partition referee.
A court-appointed partition referee is a neutral third-party individual appointed by the courts to address disputes between co-owners of real property.
What Does a Court-Appointed Partition Referee Do?
A partition action occurs when one co-owner petitions the court to force the other co-owner(s) to cooperate with either the sale or division of the property they own together. When the court validates the petitioner’s claim, the partition referee is appointed and is authorized to:
- Collect any rental payments until the legal conflict is fully resolved
- Hire property inspectors to investigate the condition of the property
- Hire a real estate broker to sell the property
- Negotiate the sale of the property
- Collect the proceeds and distribute them according to the court’s orders
Accounting & Distribution Process
Once the property is sold, owners’ claims of credits, reimbursements and deductions will be addressed.
The division of the assets is determined during the accounting phase of the partition action. California Code of Civil Procedure section 827.140 states that the courts may “order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity.”
When Is a Partition Referee Needed?
Let’s take a look at a couple of typical disputes and how they may be resolved through a partition action.
Investment partners who are in conflict
If three parties jointly owned a piece of property, there could be a disagreement over what to do when one or more parties want to sell. You can easily imagine a situation where Party A wants to sell the property and split the proceeds, Party B wants to wait until the market warms up, and Party C wants to retain the property for the long term, collecting rental income from an existing tenant.
If there is no way to resolve this dispute without involving the courts, one of the parties can seek the appointment of a partition referee. The referee will most commonly choose between three resolution options:
1) Sell and distribute the net proceeds to the co-owners
2) Physically divide the real property
3) Sell one co-owner’s interest in the property to another co-owner
Siblings who disagree over inheritance
One of the most common reasons for a partition referee is related to inheritance.
When adult siblings inherit a piece of property from their deceased parents, it is difficult to get everyone to agree on what should happen next. Any time you have multiple individuals who own portions of a single property, it is easy for people to disagree on how to handle it.
These complications are even more likely to emerge when the co-owners don’t seek out joint ownership, which is often the case with sibling inheritance. One sibling may want to hold onto the property for decades to allow it to fully appreciate in value. Typically, this is the sibling who is the most financially secure. Another sibling may want to seek a quick sale, especially if they are struggling financially. Alternatively, one or more siblings may think that another sibling is not well-suited to manage the property. Finally, if an additional sibling is out of contact with the others, that complicates things even further.
One sibling may consider filing a partition action and requesting the appointment of a partition referee.
Griswold Law–California’s Trusted Partition Referee Law Firm
Richardson “Red” Griswold has been appointed by the California courts more than 200 times to serve as a court-appointed receiver and a partition referee. Today, he and his team at Griswold Law are proud to serve the California court system by remedying difficult ownership situations like those that require a partition action.
To learn more about how Mr. Griswold and the attorneys at Griswold Law can help you or your clients as a court-appointed partition referee, reach out to us today and set up a time to talk.
Click here to learn more about Griswold Law’s partition referee services.
