Bill Text: IA SF2175 | 2017-2018 | 87th General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: A bill for an act relating to partition of property in kind and partition of property by sale. (Formerly SSB 3065.) Effective 7-1-18.
Spectrum: Committee Bill
Status: (Passed) 2018-04-11 - Signed by Governor. S.J. 918. [SF2175 Detail]
Download: Iowa-2017-SF2175-Introduced.html
Bill Title: A bill for an act relating to partition of property in kind and partition of property by sale. (Formerly SSB 3065.) Effective 7-1-18.
Spectrum: Committee Bill
Status: (Passed) 2018-04-11 - Signed by Governor. S.J. 918. [SF2175 Detail]
Download: Iowa-2017-SF2175-Introduced.html
Senate File 2175 - Introduced SENATE FILE BY COMMITTEE ON JUDICIARY (SUCCESSOR TO SSB 3065) A BILL FOR 1 An Act relating to partition of property in kind and partition 2 of property by sale. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5498SV (2) 87 ko/rj PAG LIN 1 1 SUBCHAPTER I 1 2 DEFINITIONS 1 3 Section 1. NEW SECTION. 651.1 Definitions. 1 4 As used in this chapter, unless the context otherwise 1 5 requires: 1 6 1. "Ascendant" means an individual who precedes another 1 7 individual in lineage in the direct line of ascent from the 1 8 other individual. 1 9 2. "Collateral" means an individual who is related to 1 10 another individual under the law of intestate succession of 1 11 this state but who is not the other individual's ascendant or 1 12 descendant. 1 13 3. "Cotenant" means a person holding title to real property 1 14 under tenancy in common ownership. 1 15 4. "Descendant" means an individual who follows another 1 16 individual in lineage in the direct line of descent from the 1 17 other individual. 1 18 5. "Heirs property" means real property held in tenancy in 1 19 common that satisfies all of the following requirements as of 1 20 the date of the filing of a partition action: 1 21 a. There is not a recorded agreement that binds all of the 1 22 cotenants that governs the partition of the property. 1 23 b. One or more of the cotenants acquired title from a living 1 24 or deceased relative. 1 25 c. Any of the following apply: 1 26 (1) Twenty percent or more of the interests are held by 1 27 cotenants who are relatives. 1 28 (2) Twenty percent or more of the interests are held by 1 29 an individual who acquired title from a living or deceased 1 30 relative. 1 31 (3) Twenty percent or more of the cotenants are relatives. 1 32 6. "Owelty" means an equitable remedy in a partition action 1 33 used to equalize the value of the property a party receives 1 34 through the payment of a sum of money from a recipient of 1 35 a higher value property to the recipient of a lower value 2 1 property. 2 2 7. "Partition by sale" means a court=ordered sale of 2 3 property subject to partition. 2 4 8. "Partition in kind" means a court=ordered division of 2 5 property subject to partition into physically distinct and 2 6 separately titled parcels. 2 7 9. "Record" means information that is inscribed on a 2 8 tangible medium or that is stored in an electronic or other 2 9 medium and is retrievable in perceivable form. 2 10 10. "Relative" means an ascendant, descendant, or collateral 2 11 or an individual otherwise related to another individual by 2 12 blood, marriage, adoption, or other law of this state. 2 13 SUBCHAPTER II 2 14 GENERAL PROVISIONS 2 15 Sec. 2. NEW SECTION. 651.2 Action for partition of 2 16 property. 2 17 Property shall be partitioned by equitable proceedings. A 2 18 property subject to partition shall be partitioned by sale 2 19 and the proceeds from the sale divided by the owners of the 2 20 property unless one or more of the property owners files 2 21 a request for partition in kind and the court determines 2 22 partition in kind is equitable and practicable. 2 23 Sec. 3. NEW SECTION. 651.3 Partition of real estate pending 2 24 probate or administration of an estate. 2 25 If an entire interest in real estate is owned by a decedent 2 26 on whose estate administration or probate is pending a 2 27 partition action shall not be brought until four months after 2 28 the second publication of the notice of the appointment of 2 29 the personal representative. A partition action shall not be 2 30 brought at any time while an application for authority to sell 2 31 such real estate is pending in a probate proceeding. 2 32 Sec. 4. NEW SECTION. 651.4 Petition for partition of 2 33 property. 2 34 A petition for partition of property shall describe the 2 35 property and the plaintiff's interest in the property. The 3 1 petition shall name all indispensable parties pursuant to 3 2 section 651.5 and state the nature and extent of each interest 3 3 or lien as far as each interest or lien is known by the 3 4 plaintiff. 3 5 Sec. 5. NEW SECTION. 651.5 Parties to a petition for 3 6 partition of property. 3 7 1. A petition for partition of property shall include as 3 8 parties all persons indispensable to the partition including 3 9 an owner of an undivided interest and a holder of a lien on all 3 10 or part of the property. 3 11 2. A petition for partition of property may include as 3 12 parties a person having an actual, apparent, claimed, or 3 13 contingent interest in the property. 3 14 3. The court shall have jurisdiction over an unborn person's 3 15 contingent or prospective vested interest as a cotenant of real 3 16 property in a partition proceeding. The court shall appoint 3 17 a guardian ad litem for such unborn person pursuant to the 3 18 rules of civil procedures. The partition in kind or partition 3 19 by sale of the real property pursuant to a court decree shall 3 20 have the same force and effect as to all such unborn persons, 3 21 or persons claiming by, through, or under the unborn person, 3 22 as though the unborn person were in being when the decree 3 23 was entered and the real property or proceeds of the unborn 3 24 person's interest shall be subject to the order of the court 3 25 until the right fully vests. 3 26 Sec. 6. NEW SECTION. 651.6 The answer to a partition 3 27 petition. 3 28 A defendant's answer to a partition petition shall state the 3 29 amount and nature of the defendant's interest. A defendant may 3 30 deny the interest of a plaintiff and by supplemental pleading, 3 31 if necessary, may deny the interest of any other defendant. 3 32 Sec. 7. NEW SECTION. 651.7 Joinder and counterclaim. 3 33 A party may perfect or quiet title to property that is 3 34 subject to a partition petition or request adjudication of a 3 35 right of a party as to any matter originating from or connected 4 1 to the property, including a lien between any parties. Except 4 2 as permitted by this section, a joinder of any other claim to a 4 3 partition petition shall not be permitted. A counterclaim to a 4 4 partition petition shall not be permitted. 4 5 Sec. 8. NEW SECTION. 651.8 Partition of personal property 4 6 subject to a lien. 4 7 Personal property that is subject to a lien on the whole or 4 8 any part of the property shall only be partitioned by sale. 4 9 Sec. 9. NEW SECTION. 651.9 Partition of real and personal 4 10 property in the same action. 4 11 Real and personal property owned by the same person may be 4 12 partitioned in the same action. A referee appointed by the 4 13 court may act as to both the real and the personal property. 4 14 Sec. 10. NEW SECTION. 651.10 Jurisdiction of property 4 15 partitioned in kind or of proceeds from a partition by sale. 4 16 Property that has been partitioned in kind or the proceeds 4 17 from a property that has been partitioned by sale shall be 4 18 subject to the order of the court until the disposition of the 4 19 rights in the property become fully vested. 4 20 Sec. 11. NEW SECTION. 651.11 Property partitioned by sale 4 21 and partitioned in kind in the same action. 4 22 If all parts of a property cannot be partitioned in kind, 4 23 parts of the property may be partitioned in kind and other 4 24 parts of the property may be partitioned by sale as provided in 4 25 this chapter. 4 26 Sec. 12. NEW SECTION. 651.12 Initial court decree and 4 27 appointment of referee. 4 28 The court shall file an initial decree establishing the 4 29 shares and interests of all owners in a property subject to 4 30 a partition petition. One referee shall be appointed in the 4 31 decree unless all owners of the property agree upon a larger 4 32 number of referees. The decree shall order an appraisal or 4 33 estimation of the valuation of the property and may direct 4 34 either a public or private sale of the property. Unless all 4 35 owners of the property agree to an alternative method for 5 1 conducting the appraisal or of estimating the valuation of 5 2 the property, the decree shall appoint three disinterested 5 3 persons with knowledge of property valuation to appraise the 5 4 property. The decree shall direct the referee to file a report 5 5 with the court setting forth the referee's recommendations for 5 6 completing the partition of the property. All other contested 5 7 issues related to the partition petition, including liens, may 5 8 be determined by the initial decree or by a supplemental decree 5 9 or decrees. 5 10 Sec. 13. NEW SECTION. 651.13 Abstract, plats, and surveys. 5 11 The court may order the filing of a complete abstract 5 12 covering real property involved in a partition action. The 5 13 court may order a party to the partition action to produce any 5 14 abstract in the party's possession or control. The court may 5 15 order a plaintiff to obtain an abstract if a complete abstract 5 16 is unavailable. The expense for such abstract shall be taxed 5 17 as costs. The abstract shall be available to the court or any 5 18 party to the partition action during the partition proceedings. 5 19 The court may also order a plaintiff to obtain a plat or survey 5 20 and the expense for such shall be taxed as costs. 5 21 Sec. 14. NEW SECTION. 651.14 Adjudication of liens on a 5 22 property subject to partition. 5 23 The court shall decide the nature, extent, priority, or 5 24 validity of a party's lien not previously determined and any 5 25 other issues as the court directs. The referee appointed by 5 26 the court shall provide notice of the court hearing to decide 5 27 such matters to the interested parties. Adjudication of liens 5 28 shall precede a partition in kind. A partition by sale and 5 29 the distribution of proceeds from such sale to any party not 5 30 affected by a lien may proceed prior to adjudication of liens 5 31 on the property. 5 32 Sec. 15. NEW SECTION. 651.15 Referee possession of property 5 33 and court preservation of property. 5 34 The court may order a referee to lease or to take possession 5 35 of a property subject to partition. The court may issue an 6 1 injunction to preserve a property subject to partition or issue 6 2 an order providing for the care and custody of such property. 6 3 Any expenses incurred under this section as allowed by the 6 4 court shall be taxed as costs. 6 5 Sec. 16. NEW SECTION. 651.16 The procedure for partition 6 6 in kind. 6 7 1. A court=appointed referee authorized to partition a 6 8 property in kind shall qualify by taking an oath. A bond shall 6 9 not be required. 6 10 2. The referee shall designate each proposed parcel of the 6 11 partitioned property by visible monuments. If allowed by the 6 12 court, the referee may employ a surveyor or assistants to aid 6 13 the referee and the expenses for such shall be taxed as costs. 6 14 3. For good reasons shown the court may order a referee 6 15 making a partition in kind to allot a particular parcel or a 6 16 particular article of personal property to a specific party. 6 17 4. The referee shall file a report with the court that 6 18 details the referee's proposed division of the property 6 19 subject to partition in kind. The report shall describe with 6 20 reasonable particularity the respective shares and the specific 6 21 property allotted to each property owner. If real property 6 22 is part of the partition, a plat shall be filed with the 6 23 report. The referee may recommend owelty payments as part of 6 24 the referee's recommendation for the partition in kind. The 6 25 court shall promptly set a time and place for a hearing on 6 26 the referee's report. The referee shall give notice of such 6 27 hearing to all interested parties as ordered by the court. 6 28 5. After the hearing the court may approve, modify, 6 29 or disapprove the referee's report, or order the property 6 30 partitioned by sale. If the court approves partition in kind 6 31 subject to owelty payments as recommended by the referee, the 6 32 court shall order that the partition in kind shall not be 6 33 completed until all owelty payments have been made. If all 6 34 owelty payments are not made as ordered, the court shall make 6 35 further orders as appropriate. On approving a partition in 7 1 kind after all owelty payments have been made, the court shall 7 2 file a decree that includes all of the following: 7 3 a. Describes the property partitioned in kind in its 7 4 entirety. 7 5 b. Describes each partitioned parcel or article of personal 7 6 property allotted to each property owner. 7 7 c. Enters judgment against each property owner for each 7 8 property owner's apportioned costs. Such costs shall be a lien 7 9 on each owner's respective allotted parcel or article and for 7 10 which special execution may issue on demand of any interested 7 11 person. 7 12 6. Upon completion of a partition in kind of real property 7 13 pursuant to a court decree, the clerk of court shall file a 7 14 certified copy of the decree with the county recorder and 7 15 provide a copy to the county auditor of each county where any 7 16 of the partitioned property is located. The county auditor 7 17 shall record a transfer in the deed records and index each 7 18 parcel as a conveyance with the name of the owner of each 7 19 parcel as the grantee and the names of all other parties to 7 20 the partition petition as grantors. The costs of making and 7 21 recording the certified copy of the decree shall be taxed as 7 22 costs in the case. 7 23 Sec. 17. NEW SECTION. 651.17 Referee's report to the court 7 24 of inability to make a partition in kind. 7 25 A referee shall file a report with the court if the referee 7 26 is not able to make a partition in kind on a property subject to 7 27 partition. Upon receipt of the report, the court shall take 7 28 the following actions: 7 29 1. If the partition involves personal property, the court 7 30 shall order a sale of the personal property without further 7 31 notice. 7 32 2. If the partition involves real property, the court shall 7 33 set a hearing as provided under section 651.16. After such 7 34 hearing the court may order a sale or other disposition of the 7 35 real property, as the court deems appropriate. 8 1 Sec. 18. NEW SECTION. 651.18 Procedure for partition by 8 2 sale. 8 3 1. A referee appointed by the court to partition property 8 4 by sale shall qualify by taking an oath. A bond shall not be 8 5 required before the referee conveys real property unless the 8 6 referee is required to do any of the following: 8 7 a. Sell personal property. 8 8 b. Take possession of real property. 8 9 c. Receive a payment on the sale before conveyance of the 8 10 real property. 8 11 2. Before conveying real property, the referee shall give 8 12 bond in the amount of one hundred twenty=five percent of the 8 13 total sale price of the real property, payable to the parties 8 14 entitled to the proceeds from the sale, and conditioned on the 8 15 faithful discharge of the referee's duties. 8 16 3. The referee shall file a report with the court that 8 17 provides all of the following: 8 18 a. A recommendation for the appropriate public or private 8 19 sale process to offer the property for sale, including but not 8 20 limited to a public auction or private listing. 8 21 b. A copy of any appraisal for the property to be 8 22 partitioned if required by the court. 8 23 4. The court shall promptly set a time and place for a 8 24 hearing on the referee's report. The referee shall provide 8 25 notice of the hearing to all interested parties. 8 26 5. After the hearing the court may approve, modify, or 8 27 disapprove the referee's report. If the court orders the 8 28 property to be partitioned by sale, the referee shall offer the 8 29 property for sale pursuant to the court order. 8 30 6. The referee shall give notice of the time and place of a 8 31 public sale of the property by two separate publications, at 8 32 least six days apart, in a newspaper of general circulation in 8 33 the county where the public sale of the property is to be held. 8 34 The last publication shall be at least seven days prior to a 8 35 public sale of real estate and at least four days prior to a 9 1 public sale of personal property. If authorized by the court, 9 2 the referee may advertise the sale beyond the required notice 9 3 and may employ an auctioneer or assistant to assist the referee 9 4 with the sale of the property. If allowed by the court, the 9 5 expense of such shall be taxed as costs. 9 6 7. The referee shall report all proposed sales to the court. 9 7 The court shall promptly set a time and place for a hearing 9 8 and the referee shall give notice to all interested parties. 9 9 Notice of the hearing shall also be given to any party who 9 10 files a request with the clerk of court, with the party's 9 11 name and the address where notice is to be sent, before the 9 12 referee's report is approved by the court. The clerk shall 9 13 docket the request and transmit a copy to the referee. 9 14 8. After the hearing the court may approve or disapprove the 9 15 sale of the property. The court may expressly order a private 9 16 sale of the property for less than the appraised value of the 9 17 property. 9 18 9. Real property shall not be conveyed to a buyer until a 9 19 partition by sale is approved by court order. Real property 9 20 shall not be conveyed to a buyer until the sale price for such 9 21 property has been paid in full. 9 22 10. If the court disapproves the partition by sale of a 9 23 property, all moneys paid or securities given shall be returned 9 24 to the persons entitled to such. 9 25 11. The court may require a party entitled to sale proceeds 9 26 from a property partitioned by sale to give satisfactory 9 27 security to refund any proceeds received, with interest, before 9 28 such party receives proceeds arising from the sale in the 9 29 event the court later rules such party is not entitled to the 9 30 proceeds. 9 31 Sec. 19. NEW SECTION. 651.19 Validity of referee's deed. 9 32 Upon court approval of a sale of property to be partitioned 9 33 by sale, the referee shall file a referee's deed that shall be 9 34 recorded in the county where the real estate is located. The 9 35 recorded referee's deed shall be valid against all subsequent 10 1 purchasers and against all persons who are parties to the 10 2 partition by sale proceeding. 10 3 Sec. 20. NEW SECTION. 651.20 Partition by sale == liens 10 4 on property. 10 5 Personal property shall be partitioned by sale free of all 10 6 liens. Real property shall be partitioned by sale free of all 10 7 liens except liens held against the entire real property. 10 8 Sec. 21. NEW SECTION. 651.21 Proceeds of property 10 9 partitioned by sale. 10 10 1. After a property has been partitioned by sale, a party, 10 11 including a holder of a lien from which the property has been 10 12 freed by the sale, shall have the same rights or interests in 10 13 the proceeds as the party had in the property sold, subject to 10 14 a prior charge for costs. 10 15 2. The court shall appoint a trustee, or order other 10 16 suitable provisions, for the proceeds of a share held for life 10 17 or years in the remainder. The ascertained share of any absent 10 18 owner shall be retained, or the proceeds invested for the 10 19 owner's benefit, under an order of the court. 10 20 Sec. 22. NEW SECTION. 651.22 Costs of a partition action. 10 21 All costs related to a partition action shall be advanced by 10 22 the plaintiff with such costs paid by all parties to the action 10 23 proportionately to each party's respective interest. A cost 10 24 created by a contest arising from the partition action shall be 10 25 taxed against the losing contestant unless otherwise ordered 10 26 by the court. If partition is in kind, costs shall be adjudged 10 27 and may be collected as provided in section 651.16, subsection 10 28 5. If partition is by sale, the costs shall be paid from the 10 29 proceeds and deducted from the shares of the parties against 10 30 whom the costs are taxed. Such remedies for collecting costs 10 31 shall be cumulative of other remedies. 10 32 Sec. 23. NEW SECTION. 651.23 Plaintiff's attorney fees. 10 33 1. On partition of real property, but not of personal 10 34 property, the court shall order a reasonable fee in favor of 10 35 the plaintiff's attorney. The fee shall be taxed as costs. 11 1 2. If the plaintiff is the losing contestant in a contest 11 2 arising from any partition action, any of the plaintiff's 11 3 attorney fees relating to such contest shall not be taxed as 11 4 costs. 11 5 Sec. 24. NEW SECTION. 651.24 Other fees taxed as costs. 11 6 Appraisers, referees, and attorneys appointed by a referee 11 7 with court approval shall receive reasonable compensation as 11 8 approved by the court and such compensation shall be part of 11 9 the costs. 11 10 Sec. 25. NEW SECTION. 651.25 Referee's final report. 11 11 Unless waived in writing by all interested parties, the 11 12 court shall fix a time and a place for a hearing on the 11 13 referee's final report. The referee shall give notice of the 11 14 hearing to all interested parties. 11 15 Sec. 26. NEW SECTION. 651.26 Payment of proceeds less than 11 16 ten thousand dollars to a minor. 11 17 If a minor for whom no conservator has been appointed is 11 18 entitled to proceeds from a partition of property by sale in an 11 19 amount not exceeding ten thousand dollars, the court may order 11 20 the proceeds paid to the minor's parent, guardian, or an adult 11 21 with whom the minor resides, for the use of the minor. After 11 22 such person files a written receipt for the proceeds with the 11 23 court, the referee shall be discharged of all liability for the 11 24 proceeds. 11 25 SUBCHAPTER III 11 26 SPECIAL PROVISIONS FOR PARTITION OF HEIRS PROPERTY 11 27 Sec. 27. NEW SECTION. 651.27 Applicability of special 11 28 provisions of heirs property. 11 29 If a cotenant requests a partition in kind in an action to 11 30 partition heirs property, the partition action shall proceed 11 31 under the special provisions for partition of heirs property 11 32 under this subchapter. The provisions of this subchapter 11 33 shall control in the event of a conflict with a provision of 11 34 subchapter II. 11 35 Sec. 28. NEW SECTION. 651.28 Initial decree. 12 1 1. If the court determines that a property subject to a 12 2 partition action is heirs property, and a cotenant requests 12 3 a partition in kind of such property, the court shall file 12 4 an initial decree pursuant to section 651.12 ordering the 12 5 partition action to proceed under this subchapter. The court 12 6 shall appoint a referee and direct the referee to obtain an 12 7 appraisal as provided in section 651.12. The referee shall 12 8 file the appraisal with the court. 12 9 2. Within ten calendar days after the referee files the 12 10 appraisal with the court, the court shall send notice to the 12 11 referee and to each party to the partition action. The notice 12 12 shall provide all of the following information: 12 13 a. The appraised fair market value of the heirs property. 12 14 b. The address of the clerk's office where the appraisal is 12 15 available for review. 12 16 c. Advise that a party may file an objection to the 12 17 appraisal with the court no later than thirty calendar days 12 18 after the date of notice by the court. An objection must state 12 19 the grounds for the objection. 12 20 3. No sooner than thirty calendar days after the date of 12 21 notice by the court and regardless of whether an objection to 12 22 the appraisal is filed, the court shall conduct a hearing to 12 23 determine the fair market value of the heirs property. The 12 24 court shall set a time and place for the hearing and give 12 25 notice to the referee and all parties to the partition action. 12 26 At the hearing, in addition to the court=ordered appraisal, the 12 27 court may consider any other evidence offered by the referee or 12 28 by a party to the partition action. 12 29 4. After the hearing the court shall file an order that 12 30 determines the fair market value of the heirs property and 12 31 provide notice of the determination to the referee and all 12 32 parties to the partition action. 12 33 Sec. 29. NEW SECTION. 651.29 Cotenant buyout. 12 34 1. If a cotenant requests partition by sale of the heirs 12 35 property after receiving notice of the court's determination of 13 1 the fair market value of the heirs property pursuant to section 13 2 651.28, the court shall send notice to all parties advising of 13 3 all of the following: 13 4 a. That a cotenant, except a cotenant that has requested 13 5 partition by sale of the heirs property, may elect to buy all 13 6 of the interests of a cotenant that has requested partition by 13 7 sale of the heirs property. 13 8 b. That a cotenant, except a cotenant that has requested 13 9 partition by sale of the heirs property, shall give notice to 13 10 the court no later than forty=five days after the date the 13 11 court sends notice pursuant to section 651.28, subsection 4, 13 12 of such cotenant's election to buy all of the interests of 13 13 a cotenant that has requested partition by sale of the heirs 13 14 property. 13 15 2. The sale price for the interest of a cotenant that has 13 16 requested a partition by sale of the heirs property shall be 13 17 the value of the entire heirs property as determined by the 13 18 court under section 651.28, multiplied by such cotenant's 13 19 fractional ownership of the entire heirs property. 13 20 3. If more than forty=five days have passed since the date 13 21 the court sent notice pursuant to section 651.28, subsection 4, 13 22 all of the following shall apply: 13 23 a. If only one cotenant elects to buy all of the interests 13 24 of a cotenant that has requested partition by sale of the 13 25 heirs property, the court shall provide notice of such to all 13 26 interested parties. 13 27 b. If more than one cotenant elects to buy all of the 13 28 interests of a cotenant that has requested partition by sale 13 29 of the heirs property, the court shall allocate the right 13 30 to buy such interests among the electing cotenants based on 13 31 each electing cotenant's existing fractional ownership of the 13 32 entire heirs property divided by the total existing fractional 13 33 ownership of all cotenants electing to buy such interests. 13 34 The court shall send notice to all interested parties of 13 35 the calculation used to determine the interest that can be 14 1 purchased by each electing cotenant and the price to be paid 14 2 for such interest by each electing cotenant. 14 3 c. If no cotenant elects to buy all of the interests of 14 4 a cotenant that has requested partition by sale of the heirs 14 5 property, the court shall send notice to all interested parties 14 6 and resolve the partition action pursuant to section 651.30. 14 7 4. If the court sends notice to the parties pursuant to 14 8 subsection 3, paragraph "a" or "b", the court shall set a date 14 9 no sooner than sixty calendar days after the date that such 14 10 notice is sent by which the electing cotenants shall pay their 14 11 apportioned price to the court. The court shall give notice 14 12 of such date to all interested parties. After such date has 14 13 passed, all of the following shall apply: 14 14 a. If all electing cotenants have timely paid their 14 15 apportioned price to the court, the court shall issue an order 14 16 reallocating all of the interests of the cotenants in the 14 17 partitioned heirs property and disburse the amounts held by the 14 18 court to the persons entitled to such disbursements. 14 19 b. If none of the electing cotenants has timely paid their 14 20 apportioned price to the court, the court shall resolve the 14 21 heirs partition action under section 651.30 as if the interest 14 22 of the cotenant that has requested partition by sale of the 14 23 heirs property has not been purchased. 14 24 c. If one or more but not all of the electing cotenants 14 25 fail to timely pay their apportioned price to the court, the 14 26 court on motion shall give notice to the electing cotenants 14 27 that have timely paid their apportioned price of the interest 14 28 remaining and the price for which the remaining interest may 14 29 be purchased. 14 30 5. Not later than twenty calendar days after the court 14 31 gives notice pursuant to subsection 4, paragraph "c", a noticed 14 32 cotenant may elect to purchase all of the remaining interest 14 33 by paying the entire price for the remaining interest to the 14 34 court. After the twenty=calendar=day period has expired, all 14 35 of the following shall apply: 15 1 a. If only one cotenant has paid the entire price for the 15 2 remaining interest in the partitioned heirs property, the 15 3 court shall issue an order reallocating the remaining interest 15 4 to that cotenant. The court shall promptly issue an order 15 5 reallocating the interests of all the cotenants and disburse 15 6 the amounts held by the court to the persons entitled to such 15 7 disbursements. 15 8 b. If none of the cotenants has paid the entire price for 15 9 the remaining interest in the heirs property, the court shall 15 10 resolve the partition action under section 651.30 as if the 15 11 interest of the cotenant that had requested partition by sale 15 12 of the heirs property has not been purchased. 15 13 c. If more than one cotenant have paid the entire price 15 14 for the remaining interest in the heirs property, the court 15 15 shall reapportion the remaining interest among such cotenants 15 16 based on each cotenant's original fractional ownership of the 15 17 entire heirs property divided by the total original fractional 15 18 ownership of all cotenants that paid the entire price for 15 19 the remaining interest. The court shall promptly issue an 15 20 order reallocating all cotenants' interests, disburse the 15 21 amounts held by the court to the persons entitled to such 15 22 disbursements, and promptly refund any excess payments held by 15 23 the court to the appropriate persons. 15 24 6. Not later than forty=five days after the court sends 15 25 notice to the parties pursuant to subsection 1, a cotenant 15 26 entitled to buy an interest under this section may request that 15 27 the court authorize the sale, as part of the pending action, of 15 28 the interests of any cotenant named as a defendant and served 15 29 with original notice who did not appear in the action. If the 15 30 court receives a timely request, the court, after a hearing, 15 31 may deny the request or authorize the requested additional sale 15 32 on such terms as the court determines are fair and reasonable, 15 33 subject to all of the following limitations: 15 34 a. A sale authorized under this subsection shall occur 15 35 only after the purchase price for all interests subject to 16 1 sale under this section has been paid to the court and such 16 2 interests have been reallocated among the cotenants as provided 16 3 in this section. 16 4 b. The purchase price for the interest of a nonappearing 16 5 cotenant shall be based on the court's determination of the 16 6 value of such interest under this section. 16 7 7. This section shall not be construed to prohibit a 16 8 cotenant from entering into an agreement with another cotenant 16 9 to change ownership of their respective interests in the heirs 16 10 property. 16 11 Sec. 30. NEW SECTION. 651.30 Alternatives to partition in 16 12 kind. 16 13 At the conclusion of a cotenant buyout as provided in 16 14 section 651.29, the court shall order the heirs property to be 16 15 partitioned in kind unless the court, after consideration of 16 16 all factors pursuant to section 651.31, finds that partition 16 17 in kind will result in great prejudice to the cotenants as a 16 18 group. In considering whether to order the heirs property to 16 19 be partitioned in kind, the court shall approve a request by 16 20 two or more cotenants to aggregate their individual interests 16 21 in the heirs property. 16 22 Sec. 31. NEW SECTION. 651.31 Factors the court shall 16 23 consider in determining if partition in kind will result in great 16 24 prejudice. 16 25 1. The court shall consider all of the following factors 16 26 in determining if partition in kind of heirs property will 16 27 result in great prejudice to the cotenants of such property as 16 28 a group: 16 29 a. Whether the heirs property can be practicably divided 16 30 among the cotenants. 16 31 b. Whether a partition in kind will apportion the heirs 16 32 property in such a way that the aggregate fair market value of 16 33 the parcels resulting from the division will be materially less 16 34 than the value of the heirs property if the heirs property is 16 35 sold as a whole, taking into account the condition under which 17 1 a court=ordered sale likely will occur. 17 2 c. Evidence of the collective duration of ownership or 17 3 possession of the heirs property by a cotenant and one or more 17 4 predecessors in title or predecessors in possession to the 17 5 cotenant who are or were relatives of the cotenant or each 17 6 other. 17 7 d. A cotenant's sentimental attachment to the heirs 17 8 property, including any attachment arising due to the heirs 17 9 property having ancestral or other unique or special value to 17 10 the cotenant. 17 11 e. The lawful use being made of the heirs property by a 17 12 cotenant and the degree to which the cotenant will be harmed 17 13 if the cotenant cannot continue the same use of the heirs 17 14 property. 17 15 f. The degree to which a cotenant has contributed the 17 16 cotenant's pro rata share of the property taxes, insurance, and 17 17 other expenses associated with maintaining ownership of the 17 18 heirs property, or has contributed to the physical improvement, 17 19 maintenance, or upkeep of the heirs property. 17 20 g. Tax consequences. 17 21 h. Any other factors the court deems relevant. 17 22 2. The court shall weigh the totality of all relevant 17 23 factors and circumstances and not consider any one factor in 17 24 subsection 1 to be dispositive. 17 25 Sec. 32. NEW SECTION. 651.32 Applicability of subchapter 17 26 II provisions. 17 27 1. If the court orders the heirs property partitioned in 17 28 kind, the proceedings shall be governed by the procedures set 17 29 forth in subchapter II that are applicable to a partition in 17 30 kind. 17 31 2. If the court orders the heirs property partitioned by 17 32 sale, the proceedings shall be governed by the procedures set 17 33 forth in subchapter II applicable to a partition by sale. 17 34 Sec. 33. REPEAL. Chapter 651, Code 2018, is repealed. 17 35 EXPLANATION 18 1 The inclusion of this explanation does not constitute agreement with 18 2 the explanation's substance by the members of the general assembly. 18 3 This bill relates to partition of property in kind and 18 4 partition of property by sale and creates new Code chapter 651. 18 5 The bill includes partition provisions currently in the rules 18 6 of civil procedure. 18 7 The bill defines terms not previously defined for partition 18 8 including "ascendant", "collateral", "cotenant", "descendant", 18 9 "heirs property", "owelty", and "relative". 18 10 The bill contains general provisions applicable to 18 11 all property partitions. The current procedures related 18 12 to an action for partition, partition pending probate or 18 13 administration of an estate, a petition for partition and 18 14 the parties to such, the answer to a partition petition, and 18 15 the prohibition of a counterclaim or joinder of claims to a 18 16 partition petition are not changed by the bill. 18 17 The bill requires that personal property subject to a lien be 18 18 partitioned by sale. Partition of real and personal property 18 19 owned by the same person may be partitioned in the same 18 20 partition action. Property may be partitioned by both sale and 18 21 in kind in the same partition action. Property that has been 18 22 partitioned in kind, or the proceeds from a partition by sale, 18 23 are subject to an order of the court until disposition of the 18 24 rights in the property are fully vested. The court may order 18 25 the filing of an abstract, adjudicate the validity and priority 18 26 of liens on a property, order a referee to take possession of 18 27 a property, or issue an order to preserve a property subject 18 28 to partition. 18 29 The bill requires that the court file an initial decree 18 30 establishing the interest and shares of all owners of a 18 31 property subject to partition. The court shall appoint one 18 32 referee unless the parties to the partition agree that more 18 33 than one referee needs to be appointed. This changes the 18 34 current requirement that the court appoint three referees for a 18 35 partition in kind and one or more referees for a partition by 19 1 sale. The court shall order an appraisal conducted by three 19 2 disinterested persons with knowledge of property valuations, or 19 3 by a different method of valuation as agreed to by the owners 19 4 of the property. Currently, the court is not required to order 19 5 an appraisal for a partition in kind, and for a partition by 19 6 sale the appraisal is to be conducted by three disinterested 19 7 freeholders. The bill requires the court to direct the referee 19 8 to file a report setting forth the referee's recommendations 19 9 for completing the partition. A referee's report is not 19 10 currently required to be filed with the court. 19 11 For a partition in kind, the bill allows the referee to 19 12 include owelty as part of the referee's recommendation. The 19 13 bill defines owelty as an equitable remedy used in partition 19 14 actions to equalize the lower value of property received by 19 15 a party through the payment of moneys from a recipient of a 19 16 higher value property. Owelty is not currently allowed in 19 17 partition actions. The court may approve or disapprove the 19 18 referee's report, or order the property sold by partition by 19 19 sale. If the court approves owelty payments, the partition in 19 20 kind cannot be completed until all owelty payments have been 19 21 made. 19 22 Upon approving a partition in kind, the court shall file a 19 23 decree describing each parcel of real property or article of 19 24 personal property allotted to each owner and enter judgment 19 25 against each property owner for their apportioned costs of the 19 26 action. A certified copy of the decree shall be filed with the 19 27 county recorder and a copy provided to the county auditor in 19 28 each county where the partitioned property is located. 19 29 The bill requires the referee to file a report with the court 19 30 if the referee is unable to make a partition in kind as ordered 19 31 by the court. If such partition involves personal property, 19 32 the court shall order a sale of the property without further 19 33 notice. If the partition involves real property, the court 19 34 must set a hearing after which the court may order a partition 19 35 by sale or order another disposition of the property. 20 1 The referee's report for a partition by sale must include 20 2 a recommendation for the appropriate public or private sale 20 3 process and a copy of the appraisal for the property. The 20 4 referee must provide notice of the sale by publication in a 20 5 newspaper of general circulation in the counties where the 20 6 property to be partitioned is located. The referee must report 20 7 all proposed sales to the court and the court may approve or 20 8 disapprove such sales. No real property shall be conveyed 20 9 prior to approval of the court. The bill requires property 20 10 subject to partition to be sold free of liens, except those 20 11 liens against the entire property. Upon court approval, the 20 12 referee must file a referee's deed that has to be recorded in 20 13 the counties where the partitioned property is located. 20 14 The bill requires the court to order a reasonable fee, 20 15 taxed as costs, for the plaintiff's attorney in a partition of 20 16 real property. In addition, if the plaintiff is the losing 20 17 contestant in any contest arising from the partition action, 20 18 the plaintiff's attorney fees related to such contest shall 20 19 not be taxed as costs. This is a change from the current rule 20 20 of civil procedure that requires such fees to be taxed against 20 21 the losing contestant. The bill does not change the court's 20 22 ability to order reasonable compensation for any appraisers, 20 23 referees, and attorneys involved in a partition action. 20 24 The bill requires that such compensation shall be part of 20 25 costs. The court shall have a hearing on the referee's final 20 26 report. Any payment of proceeds of less than $10,000 from a 20 27 partition by sale that are to go to a minor who does not have a 20 28 conservator appointed are to be paid to the minor's parents, 20 29 guardian, or an adult who resides with the minor. 20 30 The bill details procedures for partition in kind of heirs 20 31 property as defined in the bill. The bill provides that these 20 32 provisions control in the event of a conflict with the general 20 33 provisions of the new Code chapter. 20 34 In a partition action involving heirs property in which a 20 35 cotenant has requested partition in kind, the bill requires 21 1 the court to issue an initial decree appointing a referee and 21 2 ordering an appraisal. After the referee files the appraisal, 21 3 the court must conduct a hearing to determine the fair market 21 4 value of the heirs property. After the hearing the court 21 5 must send notice of the fair market value to all cotenants of 21 6 the heirs property. If at that time a cotenant requests that 21 7 the heirs property be partitioned by sale, the bill allows 21 8 all other cotenants to elect to purchase the interest of a 21 9 cotenant that has requested partition by sale of the heirs 21 10 property. The bill provides a specific time period in which 21 11 a cotenant has to elect to purchase such interest, provides 21 12 a determination of fractional ownership of each cotenant's 21 13 interest in the heirs property before and after purchase of 21 14 such interest, provides the time frame for a cotenant to 21 15 pay for an interest such cotenant has elected to purchase 21 16 from another cotenant, and provides for reallocation of 21 17 all cotenants' interests in the heirs property based on the 21 18 payments made, or not made, by the electing cotenants. 21 19 The bill allows a cotenant to petition the court to authorize 21 20 the sale of the interest of a cotenant named as a defendant 21 21 in the action who does not appear in the action. If the 21 22 court authorizes such sale, the value of the interest of the 21 23 nonappearing cotenant shall be determined by the court. 21 24 If all payments are made by the electing cotenants, the 21 25 court shall order the heirs property to be partitioned in kind 21 26 unless the court determines that a partition in kind will 21 27 result in great prejudice to the cotenants as a group. The 21 28 court is required to consider the totality of eight factors 21 29 as detailed in the bill in making such a determination. If 21 30 the court orders the heirs property to be partitioned in 21 31 kind, the partition shall be conducted per the partition in 21 32 kind procedures detailed in the general provisions of the 21 33 new Code chapter. If the court orders the heirs property to 21 34 be partitioned by sale, the partition shall be conducted per 21 35 the partition by sale procedures as detailed in the general 22 1 provisions of the new Code chapter. 22 2 The bill repeals Code chapter 651, Code 2018. LSB 5498SV (2) 87 ko/rj
