When You Can't Afford a Partition Action

When You Can’t Afford a Partition Action

Updated on May 16, 2023

Can’t afford a partition action but need to figure out a way to sell your interest in the property you inherited or co-own? Keep reading to find out what you can potentially do when you are considering a partition action but can’t afford it. 

When You Can’t Afford a Partition

Have you ever heard the expression of being house rich but cash poor?  This often results of a long history of owning the property, being gifted property, inheriting property or simply a change in life circumstances.  When people are house rich and cash poor, they sometimes desire to sell their property to liquidate it so they can have the money to go about their life.

But, what happens when you want to sell but you co-own the property with someone who does not want to sell?   In that situation, where the parties cannot come to an agreement to sell, one party may try to force a sale through a court ordered sale – otherwise known as a partition action.

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When You Can't Afford a Partition Action

Filing a partition action, however, does not immediately solve the cash poor problem. This is true because it is very difficult for an individual to navigate a partition action without a lawyer.   Likewise, if you own the property through an entity, the entity must have a licensed lawyer represent it.   Retaining a lawyer typically involves paying the lawyer’s hourly fees.

What to do When You Can’t Afford a Partition Action

In this situation, the property owner has a few options (amongst others) to consider:

  • See if your co-owner will buy you out. This helps avoid the time and expense of a partition action and may even save on the costs of sale by avoiding the use of a real estate broker.  This could be done with either a broker or the assistance of a lawyer.
  • Negotiate with your co-owner to see if you can come to an agreement regarding sale terms.
  • Hire a lawyer to help with the lawsuit and pay the hourly fees. Keep in mind you will have the right to ask the court to be reimbursed your attorneys’ fees roughly in accordance with your property interest in the property at the conclusion of the property.
  • Hire a contingency lawyer who will take a percentage of the outcome. We think this is a bad option and not terribly fair to the property owner.  For example, if you have a property worth $1,000,000 and your interest is 50% ($500,000), then you would be giving up 30-40% (35%=$175,000) of your equity just to bring the partition action.  This could be prohibitively expensive – especially if the case settles without much litigation.
  • See if the law firm will secure its fees through the sale. Some firms offer this option where the law firm can secure its fees with a deed of trust against the property such that they get paid out their hourly fees (plus interest) at the sale. This can be a good option as it helps solve the cash poor, property rich scenario. From time to time, Schorr Law has done these sorts of deals for the right property – but it is typically on a case-by-case basis.
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To discuss your partition matter and creative ways to deal with the all too common cash poor but property rich scenario, please do not hesitate to contact our Partition Dispute Attorney in Los Angeles today. You can call us directly at (310) 954-1877, text us at (310) 706-2265, or send us a message here.

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