STATE OF NEW YORK ________________________________________________________________________ 4865 2019-2020 Regular Sessions IN SENATE March 28, 2019 ___________ Introduced by Sen. HOYLMAN -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the real property actions and proceedings law, in relation to establishing the uniform partition of heirs property act The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The real property actions and proceedings law is amended by 2 adding a new section 993 to read as follows: 3 § 993. Uniform partition of heirs property act. 1. Short title. This 4 section shall be known as the "uniform partition of heirs property act". 5 2. Definitions. For purposes of this section, the following terms 6 shall have the following meanings: 7 (a) "Ascendant" means an individual who precedes another individual in 8 lineage, in the direct line of ascent from such other individual. 9 (b) "Collateral" means an individual who is related to another indi- 10 vidual under the law of intestate succession of this state but who is 11 not such other individual's ascendant or descendant. 12 (c) "Descendant" means an individual who follows another individual in 13 lineage, in the direct line of descent from such other such individual. 14 (d) "Determination of value" means a court order determining the fair 15 market value of heirs property under subdivision six or ten of this 16 section or adopting the valuation of the property agreed to by all 17 co-tenants. 18 (e) "Heirs property" means real property held in tenancy in common 19 which satisfies all of the following requirements as of the filing of a 20 partition action: 21 (i) there is no agreement in a record binding all of the co-tenants 22 which governs the partition of the property; 23 (ii) one or more of the co-tenants acquired title from a relative, 24 whether living or deceased; and 25 (iii) any of the following applies: 26 (A) twenty percent or more of the interests are held by co-tenants who 27 are relatives; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10955-01-9S. 4865 2 1 (B) twenty percent or more of the interests are held by an individual 2 who acquired title from a relative, whether living or deceased; or 3 (C) twenty percent or more of the co-tenants are relatives. 4 (f) "Partition by sale" means a court-ordered sale of the entire heirs 5 property, whether by auction, sealed bids, or open-market sale conducted 6 under subdivision ten of this section. 7 (g) "Partition in kind" means the division of heirs property into 8 physically distinct and separately titled parcels. 9 (h) "Record" means information that is inscribed on a tangible medium 10 or that is stored in an electronic or other medium and is retrievable in 11 perceivable form. 12 (i) "Relative" means an ascendant, descendant, or collateral or an 13 individual otherwise related to another individual by blood, marriage, 14 adoption, or law of this state other than under this section. 15 3. Applicability; relation to other law. (a) This section applies to 16 partition actions filed on or after the effective date of this section. 17 (b) In any action to partition real property under this article, the 18 court shall determine whether the property is heirs property. If the 19 court determines that the property is heirs property, the property shall 20 be partitioned under this section unless all of the co-tenants otherwise 21 agree in a record. 22 (c) This section shall supplement the general partition statute and, 23 if an action is governed by this section, shall replace the provisions 24 of such general partition statute that are inconsistent with this 25 section. 26 4. Service; notice by posting. (a) This section shall not limit or 27 affect the method by which service of a complaint in a partition action 28 may be made. 29 (b) If the plaintiff in a partition action seeks an order of notice by 30 publication and the court determines that the property may be heirs 31 property, the plaintiff, not later than ten days after the court's 32 determination, shall post and maintain while the action is pending a 33 conspicuous sign on the property that is the subject of the action. The 34 sign shall state that the action has commenced and identify the name and 35 address of the court and the common designation by which the property is 36 known. The court may require the plaintiff to publish on the sign the 37 name of the plaintiff and the known defendants. 38 5. Commissioners. If the court designates commissioners pursuant to 39 section nine hundred fifteen of this article, each commissioner, in 40 addition to the requirements and disqualifications applicable to such 41 commissioners in such section, shall be disinterested and impartial and 42 not a party to or a participant in the action. 43 6. Determination of value. (a) Except as otherwise provided in para- 44 graphs (b) and (c) of this subdivision, if the court determines that the 45 property that is the subject of a partition action is heirs property, 46 the court shall determine the fair market value of the property by 47 ordering an appraisal pursuant to paragraph (d) of this subdivision. 48 (b) If all co-tenants have agreed to the value of the property or to 49 another method of valuation, the court shall adopt such value or the 50 value produced by the agreed method of valuation. 51 (c) If the court determines that the evidentiary value of an appraisal 52 is outweighed by the cost of the appraisal, the court, after an eviden- 53 tiary hearing, shall determine the fair market value of the property and 54 send notice of the value to the parties. 55 (d) If the court orders an appraisal, the court shall appoint a disin- 56 terested real estate appraiser licensed in this state to determine theS. 4865 3 1 fair market value of the property assuming sole ownership of the fee 2 simple estate. On completion of the appraisal, the appraiser shall file 3 a sworn or verified appraisal with the court. 4 (e) If an appraisal is conducted pursuant to paragraph (d) of this 5 subdivision, not later than ten days after the appraisal is filed, the 6 court shall send notice to each party with a known address, stating: 7 (i) the appraised fair market value of the property; 8 (ii) that the appraisal is available at the clerk's office; and 9 (iii) that a party may file with the court an objection to the 10 appraisal not later than thirty days after the notice is sent, stating 11 the grounds for the objection. 12 (f) If an appraisal is filed with the court pursuant to paragraph (d) 13 of this subdivision, the court shall conduct a hearing to determine the 14 fair market value of the property not sooner than thirty days after a 15 copy of the notice of the appraisal is sent to each party under para- 16 graph (e) of this subdivision, whether or not an objection to the 17 appraisal is filed under subparagraph (iii) of paragraph (e) of this 18 subdivision. In addition to the court-ordered appraisal, the court may 19 consider any other evidence of value offered by a party. 20 (g) After a hearing under paragraph (f) of this subdivision, but 21 before considering the merits of the partition action, the court shall 22 determine the fair market value of the property and send notice to the 23 parties of the value. 24 7. Co-tenant buyout. (a) If any co-tenant requested partition by sale, 25 after the determination of value under subdivision six of this section, 26 the court shall send notice to the parties that any co-tenant except a 27 co-tenant that requested partition by sale may buy all the interests of 28 the co-tenants that requested partition by sale. 29 (b) Not later than forty-five days after the notice is sent under 30 paragraph (a) of this subdivision, any co-tenant, except a co-tenant 31 that requested partition by sale, may give notice to the court that he 32 or she elects to buy all the interests of the co-tenants that requested 33 partition by sale. 34 (c) The purchase price for each of the interests of a co-tenant that 35 requested partition by sale is the value of the entire parcel determined 36 under subdivision six of this section multiplied by the co-tenant's 37 fractional ownership of the entire parcel. 38 (d) After expiration of the period in paragraph (b) of this subdivi- 39 sion, the following rules apply: 40 (i) If only one co-tenant elects to buy all the interests of the 41 co-tenants that requested partition by sale, the court shall notify all 42 the parties of such fact. 43 (ii) If more than one co-tenant elects to buy all the interests of the 44 co-tenants that requested partition by sale, the court shall allocate 45 the right to buy those interests among the electing co-tenants based on 46 each electing co-tenant's existing fractional ownership of the entire 47 parcel divided by the total existing fractional ownership of all co-ten- 48 ants electing to buy and send notice to all the parties of such election 49 and of the price to be paid by each electing co-tenant. 50 (iii) If no co-tenant elects to buy all the interests of the co-ten- 51 ants that requested partition by sale, the court shall send notice to 52 all the parties of such fact and resolve the partition action under 53 paragraphs (a) and (b) of subdivision eight of this section. 54 (e) If the court sends notice to the parties under subparagraph (i) or 55 (ii) of paragraph (d) of this subdivision, the court shall set a date, 56 not sooner than sixty days after the date the notice was sent, by whichS. 4865 4 1 electing co-tenants must pay their apportioned price into the court. 2 After this date, the following rules apply: 3 (i) If all electing co-tenants timely pay his or her apportioned price 4 to the court, the court shall issue an order reallocating all the inter- 5 ests of the co-tenants and disburse the amounts held by the court to the 6 persons entitled to them. 7 (ii) If no electing co-tenant timely pays his or her apportioned 8 price, the court shall resolve the partition action under paragraphs (a) 9 and (b) of subdivision eight of this section as if the interests of the 10 co-tenants that requested partition by sale were not purchased. 11 (iii) If one or more, but not all, of the electing co-tenants fail to 12 pay their apportioned price on time, the court, on motion, shall give 13 notice to the electing co-tenants that paid their apportioned price of 14 the interest remaining and the price for all such interest. 15 (f) Not later than twenty days after the court gives notice pursuant 16 to subparagraph (iii) of paragraph (e) of this subdivision, any co-ten- 17 ant that paid his or her apportioned price may elect to purchase all of 18 the remaining interest by paying the entire price to the court. After 19 the twenty day period, the following rules shall apply: 20 (i) If only one co-tenant pays the entire price for the remaining 21 interest, the court shall issue an order reallocating the remaining 22 interest to such co-tenant. The court shall issue promptly an order 23 reallocating the interests of all of the co-tenants and disburse the 24 amounts held by the court to the persons entitled to such amounts. 25 (ii) If no co-tenant pays the entire price for the remaining interest, 26 the court shall resolve the partition action under paragraphs (a) and 27 (b) of subdivision eight of this section as if the interests of the 28 co-tenants that requested partition by sale were not purchased. 29 (iii) If more than one co-tenant pays the entire price for the remain- 30 ing interest, the court shall reapportion the remaining interest among 31 those paying co-tenants, based on each paying co-tenant's original frac- 32 tional ownership of the entire parcel divided by the total original 33 fractional ownership of all co-tenants that paid the entire price for 34 the remaining interest. The court shall issue promptly an order reallo- 35 cating all of the co-tenants' interests, disburse the amounts held by 36 the court to the persons entitled to such amounts, and promptly refund 37 any excess payment held by the court. 38 (g) Not later than forty-five days after the court sends notice to the 39 parties pursuant to paragraph (a) of this subdivision, any co-tenant 40 entitled to buy an interest under this subdivision may request the court 41 to authorize the sale as part of the pending action of the interests of 42 co-tenants named as defendants and served with the complaint but that 43 did not appear in the action. 44 (h) If the court receives a timely request under paragraph (g) of this 45 subdivision, the court, after a hearing, may deny the request or author- 46 ize the requested additional sale on such terms as the court determines 47 are fair and reasonable, subject to the following limitations: 48 (i) a sale authorized under this subdivision may occur only after the 49 purchase prices for all interests subject to sale under paragraphs (a), 50 (b), (c), (d), (e) and (f) of this subdivision have been paid to the 51 court and such interests have been reallocated among the co-tenants as 52 provided in such paragraphs; and 53 (ii) the purchase price for the interest of a nonappearing co-tenant 54 is based on the court's determination of value under subdivision six of 55 this section.S. 4865 5 1 8. Partition alternatives. (a) If all the interests of all co-tenants 2 that requested partition by sale are not purchased by other co-tenants 3 pursuant to subdivision seven of this section, or if after conclusion of 4 the buyout under subdivision seven of this section, a co-tenant remains 5 that has requested partition in kind, the court shall order partition in 6 kind unless the court, after consideration of the factors listed in 7 subdivision nine of this section, finds that partition in kind will 8 result in great manifest prejudice to the co-tenants as a group. In 9 considering whether to order partition in kind, the court shall approve 10 a request by two or more parties to have their individual interests 11 aggregated. 12 (b) If the court does not order partition in kind under paragraph (a) 13 of this subdivision, the court shall order partition by sale pursuant to 14 subdivision ten of this section or, if no co-tenant requested partition 15 by sale, the court shall dismiss the action. 16 (c) If the court orders partition in kind pursuant to paragraph (a) of 17 this subdivision, the court may require that one or more co-tenants pay 18 one or more other co-tenants amounts so that the payments, taken togeth- 19 er with the value of the in kind distributions to the co-tenants, will 20 make the partition in kind just and proportionate in value to the frac- 21 tional interests held. 22 (d) If the court orders partition in kind, the court shall allocate to 23 the co-tenants that are unknown, cannot be located, or the subject of a 24 default judgment, if the co-tenants interests were not bought out pursu- 25 ant to subdivision seven of this section, a part of the property repres- 26 enting the combined interests of such co-tenants as determined by the 27 court and such part of the property shall remain undivided. 28 9. Considerations for partition in kind. (a) In determining under 29 subdivision eight of this section whether partition in kind would result 30 in great manifest prejudice to the co-tenants as a group, the court 31 shall consider the following: 32 (i) whether the heirs property practicably can be divided among the 33 co-tenants; 34 (ii) whether partition in kind would apportion the property in such a 35 way that the aggregate fair market value of the parcels resulting from 36 the division would be materially less than the value of the property if 37 it were sold as a whole, taking into account the condition under which a 38 court-ordered sale likely would occur; 39 (iii) evidence of the collective duration of ownership or possession 40 of the property by a co-tenant and one or more predecessors in title or 41 predecessors in possession to the co-tenant who are or were relatives of 42 the co-tenant or each other; 43 (iv) a co-tenant's sentimental attachment to the property, including 44 any attachment arising because the property has ancestral or other 45 unique or special value to the co-tenant; 46 (v) the lawful use being made of the property by a co-tenant and the 47 degree to which the co-tenant would be harmed if the co-tenant could not 48 continue the same use of the property; 49 (vi) the degree to which the co-tenants have contributed their pro 50 rata share of the property taxes, insurance, and other expenses associ- 51 ated with maintaining ownership of the property or have contributed to 52 the physical improvement, maintenance, or upkeep of the property; and 53 (vii) any other relevant factor. 54 (b) The court shall not consider any one factor in paragraph (a) of 55 this subdivision to be dispositive without weighing the totality of all 56 relevant factors and circumstances.S. 4865 6 1 10. Open-market sale, sealed bids, or auction. (a) If the court orders 2 a sale of heirs property, the sale shall be an open-market sale unless 3 the court finds that a sale by sealed bids or an auction would be more 4 economically advantageous and in the best interest of the co-tenants as 5 a group. 6 (b) If the court orders an open-market sale and the parties, not later 7 than ten days after the entry of the order, agree on a real estate 8 broker licensed in this state to offer the property for sale, the court 9 shall appoint the broker and establish a reasonable commission. If the 10 parties do not agree on a broker, the court shall appoint a disinter- 11 ested real estate broker licensed in this state to offer the property 12 for sale and shall establish a reasonable commission. The broker shall 13 offer the property for sale in a commercially reasonable manner at a 14 price no lower than the determination of value and on the terms and 15 conditions established by the court. 16 (c) If the broker appointed under paragraph (b) of this subdivision 17 obtains within a reasonable time an offer to purchase the property for 18 at least the determination of value: 19 (i) the broker shall comply with the reporting requirements in subdi- 20 vision eleven of this section; and 21 (ii) the sale may be completed in accordance with the laws of this 22 state other than this section. 23 (d) If the broker appointed under paragraph (b) of this subdivision 24 does not obtain within a reasonable time an offer to purchase the prop- 25 erty for at least the determination of value, the court, after a hear- 26 ing, may: 27 (i) approve the highest outstanding offer, if any; 28 (ii) re-determine the value of the property and order that the proper- 29 ty continue to be offered for an additional time; or 30 (iii) order that the property be sold by sealed bids or at an auction. 31 (e) If the court orders a sale by sealed bids or an auction, the court 32 shall set terms and conditions of the sale. If the court orders an 33 auction, the auction shall be conducted in accordance with section two 34 hundred thirty-one of this chapter. 35 (f) If a purchaser is entitled to a share of the proceeds of the sale, 36 the purchaser is entitled to a credit against the price in an amount 37 equal to the purchaser's share of the proceeds. 38 11. Report of open-market sale. (a) Unless required to do so within a 39 shorter time by this article, a broker appointed under paragraph (b) of 40 subdivision ten of this section to offer heirs property for open-market 41 sale shall file a report with the court not later than seven days after 42 receiving an offer to purchase the property for at least the value 43 determined under subdivision six or ten of this section. 44 (b) The report required by paragraph (a) of this subdivision shall 45 contain the following information: 46 (i) a description of the property to be sold to each buyer; 47 (ii) the name of each buyer; 48 (iii) the proposed purchase price; 49 (iv) the terms and conditions of the proposed sale, including the 50 terms of any owner financing; 51 (v) the amounts to be paid to lienholders; 52 (vi) a statement of contractual or other arrangements or conditions of 53 the broker's commission; and 54 (vii) other material facts relevant to the sale. 55 § 2. This act shall take effect immediately.