Co Ownership Of Real Estate In California Does Not By Itself Create A Partnership

Under well settled California law, “Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property.”  SeeCal. Corp. Code § 16202(c)(1).  “A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received for any of the following reasons: (C) In payment of rent.” See Cal. Corp. Code § 16202(c)(3)(C). Thus, California’s Uniform Partnership Act would require something more than mere co-ownership to establish a partnership between two co-tenants.  Furthermore, co ownership does not in and of itself create a joint venture unless the following is established: (1) the members must have joint control over the venture (even though they may delegate it), (2) they must share the profits of the undertaking, and (3) the members must each have an ownership interest in the enterprise. See Scottsdale Ins. Co v. Essex Ins. Co., (2002) 98 Cal. App. 4th 86, 91.

 

If you are a co-owner or co-tenant in real property and have questions or concerns regarding your rights as a co-owner, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.

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