Partition Accounting in California: Credits for Mortgage, Taxes and Improvements, Offsets for Living There, and What You Have to Prove
Two siblings inherit a house in Los Angeles. One moves in, pays the mortgage, the property taxes and a new roof. The other lives out of state and pays nothing. Years later the house is sold in a partition action, and each side has a number in mind. The sibling who paid expects every dollar back before the proceeds are split. The sibling who moved away expects half the sale price, and points out that the other has lived there rent-free the whole time.
Both are partly right. A California partition action does not end with a sale; it ends with an accounting. Code of Civil Procedure Section 872.140 provides that the court "may, in all cases, order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity." This article explains what that accounting credits, what it charges, how living in the property changes the math, and the records that decide these disputes.
- Every California partition action includes a final accounting under Code of Civil Procedure Section 872.140, which authorizes the court to order allowance, accounting, contribution or other compensatory adjustment among the parties according to the principles of equity.
- A California cotenant who paid more than their share of the mortgage, property taxes, insurance or necessary repairs is generally entitled to contribution from the other cotenants; on a partition by sale that reimbursement is taken before the proceeds are divided, subject to any agreement between the owners that changes the rule.
- In a California partition, good-faith improvements that increased the property's value are credited to the cotenant who made them, even without the other cotenant's consent, and the credit is generally measured by the increase in value the improvements caused rather than by what they cost; ordinary repairs by an owner in sole occupancy may not be credited the same way.
- Absent an ouster, a California cotenant living in the property owes the others no rent, but when that cotenant asks for contribution for expenses, the court may charge them with at least part of the reasonable value of their occupancy under Hunter v. Schultz (1966) 240 Cal.App.2d 24.
- California Civil Code Section 843 lets an out-of-possession cotenant establish an ouster by serving a written demand for concurrent possession; if the cotenant in possession does not offer and provide unconditional concurrent possession within 60 days after service, the ouster is established and a claim for rental value can follow.
What does a California partition accounting credit a co-owner for?
Payments that preserved the common property, and improvements that increased its value. A cotenant who paid more than their share of the mortgage, taxes, insurance or necessary repairs is generally credited with the excess, and a cotenant whose good-faith improvements raised the value is credited with that increase. The credit comes out of the sale proceeds before division, or is reflected in the allotment if the property is physically divided.
The rule: every partition includes an accounting
In Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035, the Court of Appeal stated that every partition action includes a final accounting according to the principles of equity for both charges and credits upon each cotenant's interest. Credits, the court explained, include expenditures in excess of the cotenant's fractional share for necessary repairs, improvements that enhance the value of the property, taxes, payments of principal and interest on mortgages, and other liens, insurance for the common benefit, and protection and preservation of title. Section 872.140, enacted in 1976, codifies the court's authority to make those adjustments.
On a partition by sale, Milian v. De Leon (1986) 181 Cal.App.3d 1185, 1194 states the mechanics: a cotenant who has paid taxes, trust deed payments or other charges, or who has made improvements with the other cotenant's assent or in a manner that preserved the property, is entitled to reimbursement for those expenditures before division of the proceeds. The practical arithmetic is simple. If one owner advanced $10,000 toward a roof and the net proceeds are $400,000 on a 50/50 title, the paying owner takes $10,000 off the top and the remaining $390,000 is split, or equivalently the $5,000 overpayment, the other owner's half of the roof, is charged against the other owner's share. Either way the paying owner nets $205,000 and the other $195,000.
Mortgage principal, interest, taxes and insurance
These are the core of most accountings and the easiest to prove, because lenders, county tax collectors and insurers keep records. The cotenant who paid more than their fractional share is credited with the excess. There is a wrinkle for principal. Each principal payment increased everyone's equity, so a 50 percent owner who paid 100 percent of principal is credited with the other owner's 50 percent share of it, not with the whole payment. Interest, taxes and insurance work the same way: the credit is the overpayment, not the payment.
Improvements: value added, not money spent
Improvements are different from repairs, and the measure is different from reimbursement. In Mercola v. Chester (1950) 97 Cal.App.2d 140, 143, the court held that a court of equity is required to take into account improvements made by one cotenant in good faith that enhanced the property's value, even though the other cotenant did not consent to them. Mercola spoke of awarding the improver's cost. Wallace adopted the good-faith rule but, at pages 1038 and 1040, fixed the credit at the increase in the property's value caused by the improvements, directing the trial court on remand to determine the increased value caused solely by the improving cotenant's work; that is the figure that gets credited. Code of Civil Procedure Section 873.220 points the same direction for partition in kind: as far as practical and without material injury to the other parties, the referee allots to a party the portion that embraces improvements made by that party, and the value of those improvements is excluded from the valuation.
So the owner who spent $80,000 on a kitchen is not entitled to $80,000. They are entitled to the amount by which the kitchen increased the sale price, which may be more or less. That usually requires an appraiser who can value the property with and without the improvement.
Hunter v. Schultz (1966) 240 Cal.App.2d 24 shows how the proof plays out. The occupying owner testified he spent $4,000 to $5,000 on materials but produced receipts for $1,862.10. The trial court credited $1,862.10, and the Court of Appeal affirmed, noting that the trier of fact may weigh the credibility of a witness with a financial interest. The receipts, not the recollection, set the figure.
Repairs by the owner who lives there
Ordinary maintenance by the cotenant in sole occupancy is treated with more skepticism. Wallace, at pages 1039 to 1040, held that a co-owner who had first occupied the property as an ordinary tenant under a rental agreement that put the cost of repairs, alterations and improvements on the tenant could claim no credit for her own improvements, even those made after she became a co-owner, because the rental agreement survived her purchase and she had bargained away compensation. Secondary authorities and older decisions apply a similar instinct to routine repairs by a cotenant who had the sole benefit of the property while making them. Expect the paint, the water heater and the gardener to be contested; the roof and the foundation are far more likely to be credited.
Does a co-owner who lived in the property owe rent in California?
Not ordinarily. A co-owner has the right to occupy the whole property, and absent an ouster the owner who moved out cannot claim rent for the years the other lived there. The answer changes the moment the occupying owner asks the court for credits, because the court may offset the reasonable value of that occupancy, and it changes entirely if the occupant excluded the other owner.
The general rule: no rent without ouster
A cotenant has the right to possess the whole property. In Estate of Hughes (1992) 5 Cal.App.4th 1607, 1611, the court restated the rule that, absent an ouster, a cotenant out of possession has no right to recover the rental value of the property from a cotenant in possession. Merely residing on the property, without excluding or refusing to share possession with the other owner, is not an ouster (Hughes at p. 1613). The sibling who moved away cannot, by itself, demand rent for the years the other sibling lived in the family home.
The offset: when the occupying owner asks for contribution
Hunter v. Schultz is the case every occupying cotenant needs to read before filing a claim for expenses. Ann and Melvin Schultz bought a San Leandro home as joint tenants in 1950. Ann left in 1952 and paid nothing afterward; Melvin stayed, remarried, and he and his new wife maintained and improved the house. When Ann sued for partition in 1962, the trial court reimbursed the occupants for loan principal and improvements, but offset their $6,257.86 in interest, taxes and insurance against the value of Ann's share of the use of the property, and split the rest equally. The Court of Appeal affirmed. It acknowledged the general rule that a cotenant in exclusive possession owes no rent, but adopted the rule that a court may charge a cotenant seeking contribution with at least a part of the reasonable value of his occupancy or use (240 Cal.App.2d at pp. 31-32). The offset, the court said, is not "rent" within the no-rent rule; it is an equitable adjustment to the occupant's own claim.
The practical effect is a two-column ledger. The occupying owner's column shows what they paid above their share. The other owner's column shows the reasonable rental value of the occupant's exclusive use, multiplied by the out-of-possession owner's share. A court applying Hunter can net the two. An owner who paid $60,000 in interest, taxes and insurance over ten years while enjoying a house that would have rented for $3,000 a month may find the offset exceeds the credit.
Two cautions. Hunter describes the charge as "at least a part" of the reasonable value of occupancy; the amount is within the trial court's equitable discretion, and the opinion does not require a full rental-value offset. And the offset arises when the occupant seeks contribution. An occupying owner who claims nothing has nothing to offset, and the other owner is back to the no-rent rule unless there was an ouster.
Ouster: when rent becomes a claim of its own
An ouster is the wrongful dispossession or exclusion by one tenant of his cotenant from the common property, as Hughes put it (5 Cal.App.4th at p. 1612, quoting Zaslow v. Kroenert (1946) 29 Cal.2d 541, 548). Changing the locks, posting no-trespassing signs, refusing entry, or claiming the whole property as one's own and denying the cotenant's title can establish it. In Hughes, a surviving husband who held a one-third interest filed probate petitions claiming he owned the entire house; the court held those filings were the functional equivalent of an exclusion and constituted an ouster, and reversed the order denying rent so the rental-value claim could go forward on remand.
Because ouster is hard to prove from conduct alone, the Legislature enacted Civil Code Section 843 in 1984. Under subdivision (b), the out-of-possession cotenant serves a written demand for concurrent possession on the cotenant in possession, in the same manner as service of summons in a civil action. The demand must refer specifically to Section 843 and state the deadline. If the cotenant in possession does not offer and provide unconditional concurrent possession within 60 days after service of the demand is complete, the ouster is established. Subdivision (c) provides that a damages claim may be brought in a separate action or in a partition or other proceeding, subject to any applicable statute of limitation. Subdivision (a) preserves other ways of proving ouster, and the section does not apply where the out-of-possession cotenant is not entitled to possession or where a written agreement provides a different remedy.
Serving a Section 843 demand is the most direct step an out-of-possession owner can take to start a rental-value claim running. Because the statute fixes the ouster at 60 days after service, the demand reaches the period after that date; it does not by itself reach the years before the demand, which still require proof of an actual exclusion. It also forces a choice on the occupant: share possession, pay reasonable rental value by agreement, or litigate.
Does the Partition of Real Property Act change the accounting in California?
Not the substance of it. The Act, which applies to partition actions filed on or after January 1, 2023 involving property held in tenancy in common, unless a written agreement binding all the cotenants governs the partition, governs appraisal, the buyout election and the order of remedies. It does not displace Section 872.140, and the accounting still happens, though no published decision has said how credits are applied against a buyout price.
Our article on the cotenant buyout right under the Partition of Real Property Act explains the Act's valuation and buyout steps, and why the Act does not apply to joint tenancies. For the accounting, two features of the Act matter.
First, the Act's cost provision. Code of Civil Procedure Section 874.321.5 provides that in a partition action under the Act, the court may apportion the costs of partition, including an appraisal fee, under Section 874.040, but shall not apportion costs to a party that opposes the partition unless doing so is equitable and consistent with the purposes of the chapter. Section 874.040 is the general rule: except as otherwise provided, the court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable. Those costs, defined in Section 874.010, include reasonable attorney's fees incurred or paid by a party for the common benefit, the referee's fee and expenses, surveyor and other referee contracts, the cost of the title report with interest, and other disbursements the court finds were incurred for the common benefit. Costs of partition are a separate line from the equitable accounting; a party can win credits in one and be charged in the other.
Second, timing. Under the Act, the buyout price is tied to the court-determined value of the property and the departing cotenant's fractional interest. Whether and how credits and offsets are applied against a buyout price, as opposed to sale proceeds, is not spelled out in the Act's text and has not been settled by a published decision. Raise the accounting before the buyout election, not after.
How do I prove my partition credits in a California partition action?
With documents, organized by category, authenticated by a declaration. Partition is an equitable proceeding, and the accounting is often decided on a referee's report and a short evidentiary hearing rather than a full trial. Lender histories, tax bills, invoices and bank records prove the credits; a rental analysis proves the offset. The side with the binder usually sets the numbers.
What the court or referee will want
A summary accounting that lists each category, down payment (for tenants in common, where the court does not instead fix the ownership shares by contribution; for joint tenants only where there was an agreement to reimburse; see Milian below), mortgage principal, mortgage interest, taxes, insurance, repairs, improvements, and the amount claimed in each. Behind it, the proof: lender payment histories, tax bills with proof of payment, insurance declarations and premium receipts, contractor invoices and cancelled checks, and bank statements showing the funds came from the claiming owner. For improvements, an appraisal addressing the value with and without them. For a rental-value offset or an ouster claim, a rental analysis for the relevant years and, if one was served, the Section 843 demand with proof of service.
Under Code of Civil Procedure Section 873.850, when the proceeds of sale have not been allocated among the parties, the court may continue the action to determine their claims, and further testimony may be taken in court or by a referee at the court's discretion. The court decides the claims; a referee's report is subject to the court's confirmation or modification.
Agreements that change the rule
The equitable rules above are defaults. If the co-owners agreed how to share expenses or how credits would be handled on exit, the agreement controls. In Milian v. De Leon, an unmarried couple took title as joint tenants and contributed unequally; the trial court found an implied agreement that they intended to own the property equally regardless of who paid what, and the Court of Appeal affirmed a judgment ordering the proceeds split equally with no accounting. The court also noted, at page 1195, that joint tenancy means equal ownership and that a court may not order reimbursement or contribution on account of differences in the amounts the parties paid toward the purchase absent an agreement to reimburse. A written co-ownership agreement avoids the fight; see our article on what a California co-ownership agreement should say. Owners who hold as joint tenants should also understand how severing a joint tenancy affects their shares.
Deadlines and accrual
Section 843(c) makes an ouster-based damages claim subject to any applicable statute of limitation. Contribution claims arise when the expenditure is made, and in Willmon v. Koyer (1914) 168 Cal. 369 the Supreme Court applied the two-year statute (Code of Civil Procedure Section 339) within a partition accounting to cut off reimbursement for payments made more than two years before suit, where one cotenant had repudiated the cotenancy. Courts usually resolve these claims inside the accounting, but an owner who waits years to assert a contribution or rental-value claim should expect a limitations argument. Our statutes of limitations guide covers the general periods.
ROMO Law Group handles partition and quiet title actions throughout California, including the accounting that decides what each owner actually walks away with. Inherited-property disputes between siblings raise their own issues, covered in can you evict a sibling from inherited property in California. If you paid for a co-owned property and your co-owner is now demanding half, or you are the owner out of possession, contact us with the deed, the payment records and the dates each of you lived there.
Common questions
If I paid the mortgage on co-owned property in California, do I get it back in a partition?
Generally the excess over your share. A California cotenant who paid more than their fractional share of mortgage principal and interest, taxes, insurance or necessary repairs is generally entitled to contribution, and on a partition by sale the reimbursement is taken before the proceeds are divided, unless the owners agreed otherwise. The credit is the overpayment, not the whole payment.
Does a co-owner who lived in the house owe rent to the other co-owner in California?
Not ordinarily. Absent an ouster, a cotenant out of possession has no right to recover rental value from a cotenant in possession. But when the occupying owner seeks contribution for expenses, the court may charge them with at least part of the reasonable value of their occupancy under Hunter v. Schultz (1966) 240 Cal.App.2d 24, and if there was an ouster, rental value becomes a claim of its own.
How are improvements credited in a California partition action?
Good-faith improvements that increased the property's value are credited to the cotenant who made them, even without the other owner's consent, and the credit is generally measured by the increase in value the improvements caused rather than by their cost. Ordinary repairs by an owner in sole occupancy may not be credited the same way.
What is an ouster under California Civil Code Section 843?
An ouster is the wrongful exclusion of a cotenant from co-owned property. Under Section 843(b), an out-of-possession cotenant can serve a written demand for concurrent possession that refers specifically to the section; if the cotenant in possession does not offer and provide unconditional concurrent possession within 60 days after service is complete, the ouster is established.
Does the Partition of Real Property Act change the accounting in California?
Not the substance of it. The Act governs appraisal, the cotenant buyout and the order of remedies for tenancies in common; the equitable accounting under Code of Civil Procedure Section 872.140 still applies, though no published decision has said how credits and offsets are applied against a buyout price rather than sale proceeds. Under Section 874.321.5, the court may apportion the costs of partition, including an appraisal fee, but shall not apportion costs to a party that opposes the partition unless doing so is equitable and consistent with the purposes of the chapter.
This article is general information about California law as of November 7, 2026 and is not legal advice. It does not create an attorney-client relationship. Anyone facing a specific dispute should consult a lawyer about their own circumstances.
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