Bill Text: WV HB4956 | 2020 | Regular Session | Introduced
Bill Title: Relating generally to the partition of real property
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Engrossed - Dead) 2020-02-21 - To Energy, Industry, and Mining [HB4956 Detail]
Download: West_Virginia-2020-HB4956-Introduced.html
WEST virginia legislature
2020 regular session
Originating
House Bill 4956
By Delegates Shott, Lovejoy, and Fast
[Originating in the Committee on the Judiciary; Reported on February 14, 2020.]
A BILL to amend and reenact §37-4-3 of the Code of West Virginia, 1931, as amended, and to amend said code by adding thereto five new sections, designated §37-4-9, §37-4-10, §37-4-11, §37-4-12, and §37-4-13, all relating generally to the partition of real property; providing for allotment or sale of real property and procedures therefore; providing for appointment, duties, and requirements for commissioners for partitions; providing certain relevant factors to be considered in determining whether partition in kind is appropriate; providing for rebuttable presumptions regarding property valuation and partition in kind of severed minerals; providing procedures for courts to follow in determining the fair market value of real property being partitioned; providing for appointment, duties, and requirements for appraisers for partitions; providing for open-market sales, sealed bids, or public auctions of real property being partitioned and procedures and exceptions therefore; providing for appointment, duties, and requirements for real estate brokers for partitions; providing reporting requirements and report contents for open-market sales; providing for a reserve price in open market sales; providing protections from sale for certain specified real property interests.
Be it enacted by the Legislature of West Virginia:
ARTICLE 4. PARTITION.
§37-4-3. Allotment or sale; procedure for allotment.
(a) When partition
cannot be conveniently made;,
(1) the The entire subject may be allotted to
any party or parties who will accept it, and pay therefor to the other party or
parties such sum of money as his, her or their interest therein may
entitle him, her or them to but pursuant to the provisions of §37-9-10 ; or
(2) in any case in
which partition cannot be conveniently made, if If the interests of one or more of those who are
entitled to the subject, or its proceeds, will be promoted by a sale of the
entire subject, or allotment of part and sale of the residue, and the interest
of the other person or persons so entitled will not be prejudiced thereby, the
court, notwithstanding the fact that any of those entitled may be an infant,
insane person, or convict, may order such sale, or such sale and allotment, subject
to §37-4-9, §37-4-10, §37-4-11, §37-4-12 and §37-4-13 of this article as
applicable, and make distribution of the proceeds of sale, according to the
respective rights of those entitled, taking care, when there are creditors of
any deceased person who was a tenant in common, joint tenant, or coparcener, to
have the proceeds of such deceased person's part applied according to the
rights of such creditors.
(b) Where it clearly appears to the court that partition cannot be conveniently made, the court may order sale without appointing commissioners to make the determination and proceed pursuant to §37-4-10, §37-4-11, §37-4-12 and §37-4-13 of this article as applicable.
(c) The court making an order for sale, allotment, or a combination thereof, shall when the dividend of a party exceeds the value of $300, if such party be an infant, insane person, or convict, require security for the faithful application of the proceeds of his or her interest, in like manner as if the sale were made under article one of this chapter.
(d) In the event that
allotment shall be made as aforesaid and the person or persons entitled to the
proceeds, for any reason, cannot agree upon the value of the subject, the
court, or the judge thereof in vacation, shall proceed pursuant to §37-4-9, §37-4-10, §37-4-11, §37-4-12 and
§37-4-13 of this article as applicable. appoint
three disinterested and qualified persons to fix the value of the whole subject
who, after being duly sworn to make an appraisal of the fair market value of
the subject, shall within thirty days from the taking of such oath, appraise
the subject and make and file a written report of their findings in the office
of the clerk of the court in which the suit is pending. If such appraisers
report their disagreement, or fail to file such report within thirty days,
other appraisers may in like manner be appointed, and so again, from time to
time, as often as may be necessary. The report of the appraisers when filed,
shall be conclusive and binding upon all persons having any interest in the
subject, unless an objection is filed thereto in said clerk's office within
thirty days after the date of such report by the appraiser. If objection is
made to such report, the court, or the judge thereof in vacation, shall take
evidence upon the value of the subject in the same manner as in other chancery
matters, shall find the fair market value of the subject and shall decree
payment therefor according to the respective rights of those entitled thereto
as their interest may appear, taking care to protect the rights of creditors as
aforesaid in this section.
(e) If any party to the suit refuses or is unable because of any disability, including but not limited to infancy, insanity and conviction of crime, to make, execute and deliver a deed or other instrument transferring title to the subject to the person or persons to whom the subject has been allotted, the court, or the judge thereof in vacation, shall appoint a special commissioner for the purposes of accepting the purchase money from the person or persons to whom the subject has been allotted, making, executing, and delivering thereto a deed or other instrument therefor and distributing such purchase money according to the respective rights of those persons entitled thereto. The special commissioner so appointed shall give bond and be governed in all respects as provided in §55-12-1 of this code.
§37-4-9. Commissioners, duties, relevant factors to partition alternatives, rebuttable presumptions.
(a) The court, in its discretion, may appoint three or more commissioners to make an assessment of partition alternatives under this article.
(b) If the court appoints commissioners pursuant to this article, each commissioner must be qualified, disinterested, impartial and not a party to or a participant in the action.
(c) If the court appoints commissioners under this article to evaluate whether partition in kind would result in prejudice, the commissioners must file a report with the court in an amount of time determined by the court that provides an assessment of whether partition in kind would result in prejudice, and this assessment must be supported by sufficient facts.
(d) In determining whether partition in kind would result in prejudice, the court shall consider the following, but may not consider any one factor to be dispositive without weighing the totality of all relevant factors and circumstances:
(1) Whether the property can practicably be divided among the cotenants;
(2) Whether partition in kind would apportion the property in such a way that the aggregate fair market value of the parcels resulting from the division would be materially less than the value of the property if it were sold as a whole, taking into account the conditions under which a court-ordered sale likely would occur;
(3) Evidence of the collective duration of ownership or possession of the property by a cotenant and one or more predecessors in title or predecessors in possession to the cotenant who are or were relatives of the cotenant or each other;
(4) A cotenant’s sentimental attachment to the property, including any attachment arising because the property has ancestral or other unique or special value to the cotenant;
(5) The lawful use being made of the property by a cotenant and the degree to which the cotenant would be harmed if the cotenant could not continue the same use of the property;
(6) The degree to which the cotenants have contributed their pro rata share of the property taxes, insurance, and other expenses associated with maintaining ownership of the property or have contributed to the physical improvement, maintenance, or upkeep of the property; and
(7) Any and all other relevant factors.
(e) In the case of severed minerals, including without limitation, coal, oil and gas, there shall be a rebuttable presumption that the aggregate fair market value of the parcels resulting from the division would be materially less than the value of the property if it were sold as a whole, taking into account the conditions under which a court-ordered sale likely would occur, and therefore partition in kind would result in prejudice to one or more of the parties. The presumption may be rebutted by the other factors in subsection (d) of this section and all other relevant factors.
(f) There shall be a rebuttable presumption that severed minerals, including without limitation, coal, oil and gas, cannot be conveniently partitioned in kind and shall only be partitioned by sale unless (1) all the parties to the partition consent to partition in kind, or (2) any person or persons, whose interest will be impacted, timely files a motion or request with the court; Provided That the moving party shall bear the burden of proving that the severed minerals, including coal, oil or gas, can be equitably and conveniently partitioned in kind and such partition in kind will not prejudice any party or prevent the development of the severed minerals. After allowing time for a party to file a response to the motion or request, the court shall rule upon the motion and may appoint commissioners to effectuate such partition in kind if required.
§37-4-10. Determination of value for partitioned property, appraisals.
(a) A court shall determine the fair market value of the property, subject to the action, by ordering an appraisal pursuant to this article; unless all parties to the partition action have agreed to the value of the property or to another method of valuation, in which case the court shall adopt that value or the value produced by the agreed method of valuation.
(b) If the court determines that the evidentiary value of an appraisal is outweighed by the
cost of the appraisal, the court, after an evidentiary hearing, shall determine the fair market value of the property and send notice to the parties of the value.
(c) If the court orders an appraisal, the court shall appoint a qualified, disinterested, and impartial real estate appraiser, licensed in this state, who is not a party to or participant in the action, to determine the fair market value of the property, assuming sole ownership of the estate that is the subject of the action: Provided, That in a case of minerals including, without limitation, coal, oil and gas estates, other licensed or certified professionals with relevant experience may be used, including, without limitation, geologists, engineers, landmen, and accountants, if the value of utilizing such professionals outweighs the cost of engaging such professionals. On completion of the appraisal, the appraiser shall file a sworn or verified appraisal with the court.
(d) If an appraisal is conducted under this article within 10 days after the appraisal is filed, the court shall send notice to each party with a known address, stating:
(1) The appraised fair market value of the property;
(2) That the appraisal is available at the clerk’s office; and
(3) That a party may file with the court an objection to the appraisal not later than 30 days after the notice is sent, stating the grounds for the objection.
(e) If an appraisal is filed with the court, the court shall conduct a hearing to determine the fair market value of the property not sooner than 30 days after a copy of the notice of the appraisal is sent to each party, whether or not an objection to the appraisal is filed. In addition to the court-ordered appraisal, the court may consider any other evidence of value offered by a party.
(f) After a hearing, but before considering the merits of the partition action, the court shall determine the fair market value of the property and send notice to the parties of the value.
§37-4-11. Open-market sale, public auctions, sealed bids, real estate brokers.
(a) If the court orders a sale of the property, the court shall sell the property by an open-market sale pursuant to this section, unless the court finds that a sale by sealed bids or a public auction would be more economically advantageous and in the best interest of the cotenants as a group.
(b) If the court orders an open-market sale and the parties, in an amount of time to be determined by the court, agree on a real estate broker licensed in this state to offer the property for sale, the court shall appoint the broker and establish a reasonable commission. If the parties do not agree on a broker, the court shall appoint a qualified, disinterested, and impartial real estate broker, licensed in this state, who is not a party to or a participant in the action, to offer the property for sale and shall establish a reasonable commission. The broker shall offer the property for sale in a commercially reasonable manner at a price no lower than the determination of value under §37-4-10 of this code and on the terms and conditions established by the court, and report to the court within the time established by the court.
(c) If the appointed broker obtains an offer to purchase the property within a reasonable time for at least the determination of value under §37-4-10 of this code, the broker shall comply with the reporting requirements in §37-4-12 of this code and, the sale may be completed in accordance with state law.
(d) If the appointed broker does not obtain an offer within a reasonable time to purchase the property for at least the determination of value under §37-4-10 of this code, the court, after hearing, may:
(1) Approve the highest outstanding offer, if any;
(2) Redetermine the value of the property and order that the property continue to be offered for an additional time; or
(3) Order that the property be sold by sealed bids or at an auction.
(e) If the court orders a sale by sealed bids or an auction, the court shall set terms and conditions of the sale.
(f) If a purchaser is entitled to a share of the proceeds of the sale, the purchaser is entitled to a credit against the price in an amount equal to the purchaser’s share of the proceeds.
§37-4-12. Report of Open-Market Sale.
(a) A broker, appointed under §37-4-11 of this code to offer property for open market sale, shall file a report with the court in an amount of time to be determined by the court after receiving an offer or offers to purchase the property for at least the value determined under §37-4-10 of this code.
(b) The report must contain the following information:
(1) A description of the property to be sold to each buyer;
(2) The name of each buyer;
(3) The proposed purchase price;
(4) The terms and conditions of the proposed sale, including the terms of any owner financing;
(5) The amounts to be paid to lienholders;
(6) A statement of contractual or other arrangements or conditions of the broker’s commission; and
(7) Other material facts relevant to the sale.
§37-4-13. Interests protected from partition by sale.
Any undivided interest in minerals, including without limitation, coal, oil and gas, which is covered by a valid lease, which was negotiated through reasonable, good faith efforts and entered into prior to the filing of the partition action, shall not be sold or transferred in a partition by sale under this article without the express written consent of the owner of the covered mineral interest, which written consent shall be filed with the court.
NOTE: The purpose of this bill is to enact partition reform by providing for allotment or sale of real property; providing for appointment, duties, and requirements for commissioners, appraisers, and real estate brokers for partitions; providing factors to be considered in determining whether partition in kind is appropriate; providing procedures to be followed in determining the fair market value of property being partitioned; providing for open-market sales, sealed bids, or public auctions of property being partitioned; providing reporting requirements; and providing protections from sale for certain specified interests.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.
