Bill Text: NY S04865 | 2019-2020 | General Assembly | Amended
Bill Title: Establishes the uniform partition of heirs property act which supplements the general partition statute and governs actions to partition heirs property.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2019-12-06 - SIGNED CHAP.596 [S04865 Detail]
Download: New_York-2019-S04865-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 4865--A 2019-2020 Regular Sessions IN SENATE March 28, 2019 ___________ Introduced by Sens. HOYLMAN, MONTGOMERY, THOMAS -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10955-02-9S. 4865--A 2 1 (ii) any of the co-tenants acquired title from a relative, whether 2 living or deceased; and 3 (iii) any of the following applies: 4 (A) twenty percent or more of the interests are held by co-tenants who 5 are relatives; 6 (B) twenty percent or more of the interests are held by an individual 7 who acquired title from a relative, whether living or deceased; 8 (C) twenty percent or more of the co-tenants are relatives of each 9 other; or 10 (D) any co-tenant who acquired title from a relative resides in the 11 property. 12 (f) "Partition by sale" means a court-ordered sale of the entire heirs 13 property, or the portion thereof in which any co-tenant who acquired 14 title from a relative resides, whether by auction, sealed bids, or open- 15 market sale conducted under subdivision ten of this section. 16 (g) "Partition in kind" means partition or division of heirs property 17 into physically distinct and separately titled parcels. 18 (h) "Record" means information that is inscribed on a tangible medium 19 or that is stored in an electronic or other medium and is retrievable in 20 perceivable form. 21 (i) "Relative" means an ascendant, descendant, or collateral or an 22 individual otherwise related to another individual by blood, marriage, 23 adoption, or law of this state other than under this section. 24 3. Applicability; relation to other law. (a) This section applies to 25 partition actions filed on or after the effective date of this section. 26 (b) In any action to partition real property, the court shall deter- 27 mine, after notice and the right to be heard afforded to each party, 28 whether the property is heirs property. If the court determines that the 29 property is heirs property, the property shall be partitioned in accord- 30 ance with this section unless all of the co-tenants otherwise agree in a 31 record. 32 (c) This section shall supplement the general partition statute of 33 this article and, if an action is governed by this section, shall 34 replace the provisions of such general partition statute that are incon- 35 sistent with this section. 36 4. Service; notice by posting. (a) This section shall not limit or 37 affect the method by which service of a complaint in a partition action 38 may be made. 39 (b) If the plaintiff in a partition action seeks an order of notice by 40 publication and the court determines that the property may be heirs 41 property, the plaintiff, not later than ten days after the court's 42 determination, shall post and maintain while the action is pending a 43 conspicuous sign on the property that is the subject of the action. The 44 sign shall state that the action has commenced and identify the name and 45 address of the court and the common designation by which the property is 46 known. The court may require the plaintiff to publish on the sign the 47 name of the plaintiff and the known defendants. 48 5. Settlement conference. (a) In any partition action of heirs proper- 49 ty, plaintiffs shall file proof of service within twenty days of such 50 service, however service is made, and the court shall hold a mandatory 51 conference within sixty days after the date when a request for judicial 52 intervention is filed, or on such adjourned date as has been agreed to 53 by the parties, for the purpose of holding settlement discussions 54 pertaining to the relative rights and obligations of the parties with 55 respect to the subject property including, but not limited to, as set 56 forth in this section.S. 4865--A 3 1 (b) Upon the filing of a request for judicial intervention, the court 2 shall promptly send a notice to parties advising them of the time and 3 place of the settlement conference, the purpose of the conference and 4 the requirements of this section. The notice shall be in a form 5 prescribed by the office of court administration, or, at the discretion 6 of the office of court administration, the administrative judge of the 7 judicial district in which the action is pending. Plaintiff shall post a 8 copy of the settlement conference notice in a conspicuous place on the 9 property within twenty days of the date of the notice. 10 (c) The settlement conference may be adjourned or reconvened from time 11 to time as appropriate during the pendency of the partition action. At 12 any conference held pursuant to this section, the plaintiffs and the 13 defendants shall appear in person or by counsel, and each party's repre- 14 sentative at the conference shall be fully authorized to dispose of the 15 entirety or any portion of the case. If the defendant is appearing pro 16 se, the court shall advise the defendant of the nature of the action and 17 his or her rights and responsibilities as a defendant. 18 (d) At the first settlement conference held pursuant to this section, 19 if the defendant has not filed an answer or made a pre-answer motion to 20 dismiss, the court shall (i) advise the defendant of the requirement to 21 answer the complaint, (ii) explain what is required to answer a 22 complaint in court, (iii) advise that the ability to contest the parti- 23 tion action and assert defenses may be lost if an answer is not inter- 24 posed, (iv) set a deadline for any co-tenants requesting partition by 25 sale, and (v) provide information about available resources for legal 26 assistance. A defendant who appears at the settlement conference but who 27 failed to file a timely answer, pursuant to rule three hundred twenty of 28 the civil practice law and rules, shall be presumed to have a reasonable 29 excuse for the default and shall be permitted to serve and file an 30 answer, without any substantive defenses deemed to have been waived, 31 within thirty days of initial appearance at the settlement conference. 32 The default shall be deemed vacated upon service and filing of an 33 answer. 34 (e) Both the plaintiffs and defendants shall negotiate in good faith 35 to reach a mutually agreeable resolution including, but not limited to, 36 a tenancy in common agreement, a co-tenant buyout and the allocation, 37 mechanics and financing thereof as provided in subdivision seven of this 38 section, a partition in kind as provided in subdivisions eight and nine 39 of this section, an open market sale as provided in subdivision ten of 40 this section, or any other agreement or loss mitigation that is fair and 41 reasonable considering the totality of factors listed in paragraph (a) 42 of subdivision nine of this section. 43 (f) If the parties do not reach a mutually agreeable resolution, the 44 referee, judicial hearing officer, or other staff designated by the 45 court to oversee the settlement conference process shall make a report 46 of findings of fact, conclusions of law and recommendations for relief 47 to the court concerning any party's failure to negotiate in good faith 48 pursuant to paragraph (e) of this subdivision. If the court determines 49 a plaintiff has failed to negotiate in good faith, the partition action 50 shall be dismissed. 51 (g) Any motions submitted by any party to the action may be held in 52 abeyance while the settlement conference process is ongoing, except for 53 motions concerning (i) a determination of the percentage interests, if 54 any, owned by any alleged co-tenant if such interests are in dispute and 55 (ii) compliance with this rule and its implementing rules includingS. 4865--A 4 1 applications to extend in the interests of justice any deadlines fixed 2 herein. 3 (h) In addition to any other qualifications otherwise required, each 4 commissioner appointed under section nine hundred fifteen of this arti- 5 cle and any officer appointed to conduct a sale shall be disinterested, 6 impartial and not related to a party to or participant in the action. 7 6. Determination of value. (a) If the court determines that the prop- 8 erty that is the subject of a partition action is heirs property, the 9 court shall determine the fair market value of the heirs property for 10 purposes of subdivision seven of this section as follows, utilizing 11 paragraph (d) of this subdivision, unless it has determined that para- 12 graph (b) or (c) of this subdivision apply. 13 (b) If all co-tenants have agreed to the value of the property or to 14 another method of valuation, the court shall adopt such value or the 15 value produced by the agreed method of valuation. 16 (c) If the court determines that the evidentiary value of an appraisal 17 is outweighed by the cost of the appraisal, the court, after an eviden- 18 tiary hearing, shall determine the fair market value of the property and 19 send notice of the value to the parties. 20 (d) If paragraph (b) or (c) of this subdivision do not apply, the 21 court shall order an appraisal by a disinterested real estate appraiser 22 licensed in this state to determine the fair market value of the proper- 23 ty. Any determination of value under paragraph (c), (d), (f) or (g) of 24 this subdivision shall assume sole ownership of the fee simple estate. 25 On completion of the appraisal, the appraiser shall file a sworn or 26 verified appraisal with the court. 27 (e) Not later than ten days after an appraisal is filed under para- 28 graph (d) of this subdivision, the court shall send notice to each party 29 with a known address, stating: 30 (i) the appraised fair market value of the property plus the allowed 31 cost of the appraisal; 32 (ii) that the appraisal is available at the clerk's office; and 33 (iii) that a party may file with the court an objection to the 34 appraisal not later than thirty days after the notice is sent, stating 35 the grounds for the objection. 36 (f) If an appraisal is filed with the court pursuant to paragraph (d) 37 of this subdivision, the court shall conduct a hearing to determine the 38 fair market value of the property not sooner than thirty days after a 39 copy of the notice of the appraisal is sent to each party under para- 40 graph (e) of this subdivision, whether or not an objection to the 41 appraisal is filed under subparagraph (iii) of paragraph (e) of this 42 subdivision. In addition to the court-ordered appraisal, the court may 43 consider any other evidence of value offered by a party. 44 (g) After a hearing under paragraph (f) of this subdivision, but 45 before considering the merits of the partition action, the court shall 46 determine the fair market value of the property and send notice to the 47 parties of the value. 48 7. Co-tenant buyout. (a) Every co-tenant who requests or joins a 49 request for partition of heirs property by sale has thereby agreed that 50 his or her interest may be acquired in accordance herewith at the value 51 determined under subdivision six of this section by the co-tenants who 52 have not sought or joined in the request for partition by sale. Upon 53 determination that the property is heirs property and prior to the 54 determination of value under subdivision six of this section, the court 55 shall send notice to all parties identifying the owners of interests 56 that have sought partition by sale, the percentage interests such ownersS. 4865--A 5 1 allege to hold and of the right of the remaining co-tenants to avert 2 partition by sale by exercising the right to purchase all of the inter- 3 ests of the co-tenants who requested partition by sale. 4 (b) Not later than forty-five days after the notice of the determi- 5 nation of value under subdivision six of this section is sent and by the 6 date specified in such notice, any co-tenant, except a co-tenant that 7 requested partition by sale, may give notice to the court of the total 8 amount of percentage interests subject to purchase that he or she elects 9 to buy; provided, however, the court shall make a determination of each 10 co-tenant's percentage ownership interest in the property prior to send- 11 ing notice of the determination of value if such interest is in dispute 12 and shall consider all facts as determined by the court and presented by 13 the parties, and all laws and rules that govern the transfer, succession 14 and acquisition of title through probate, intestacy or otherwise. 15 (c) The purchase price for percentage interests shall be the value of 16 the entire parcel determined under subdivision six of this section 17 multiplied by the aggregate amount of the percentage interests subject 18 to purchase. 19 (d) After expiration of the period in paragraph (b) of this subdivi- 20 sion, the following rules apply: 21 (i) If one or more co-tenants have elected in the aggregate to buy at 22 least the total amount of percentage interests subject to purchase, the 23 court shall notify all the parties of such fact. 24 (ii) If the electing co-tenants' offers equal or exceed the amount of 25 percentage interests subject to purchase, the court shall allocate the 26 right to buy those interests among the electing co-tenants based on each 27 electing co-tenant's existing fractional ownership of the entire parcel 28 divided by the total existing fractional ownership of all co-tenants 29 electing to buy, reserving priority, first, to electing co-tenants who 30 acquired the interest from a relative and reside in the property and, 31 second, to all other electing co-tenants who acquired their interest 32 from a relative, and send notice to all the parties of the foregoing and 33 of the price to be paid by each electing co-tenant. 34 (iii) If co-tenants with the right to elect fail to elect to purchase 35 the entirety of the interests of the co-tenants whose interests are 36 subject to purchase, the court shall send notice to all the parties of 37 such fact and resolve the partition action under paragraphs (a) and (b) 38 of subdivision eight of this section. 39 (e) If the court sends notice to the parties under subparagraph (i) or 40 (ii) of paragraph (d) of this subdivision, the court shall set a date, 41 not sooner than sixty days after the date the notice was sent, by which 42 electing co-tenants must pay their apportioned price into the court. 43 After this date, the following rules apply: 44 (i) If all electing co-tenants timely pay his or her apportioned price 45 to the court, the court shall issue an order reallocating all the inter- 46 ests of the co-tenants and disburse the amounts held by the court to the 47 persons entitled to them. 48 (ii) If no electing co-tenant timely pays his or her apportioned 49 price, the court shall resolve the partition action under paragraphs (a) 50 and (b) of subdivision eight of this section as if the interests of the 51 co-tenants that requested partition by sale were not purchased. 52 (iii) If one or more, but not all, of the electing co-tenants fail to 53 pay their apportioned price on time, the court, on motion, shall give 54 notice to the electing co-tenants that paid their apportioned price of 55 percentage of the unpurchased interests remaining and the price for all 56 such interests.S. 4865--A 6 1 (f) Not later than twenty days after the court gives notice pursuant 2 to subparagraph (iii) of paragraph (e) of this subdivision, any co-ten- 3 ant that paid his or her apportioned price may elect to purchase all of 4 the remaining interest by paying the entire price to the court. After 5 the twenty day period, the following rules shall apply: 6 (i) If only one co-tenant pays the entire price for the remaining 7 interest, the court shall issue an order reallocating the remaining 8 interest to such co-tenant. The court shall issue promptly an order 9 reallocating the interests of all of the co-tenants and disburse the 10 amounts held by the court to the persons entitled to such amounts. 11 (ii) If no co-tenant pays the entire price for the remaining interest, 12 the court shall resolve the partition action under paragraphs (a) and 13 (b) of subdivision eight of this section as if the interests of the 14 co-tenants that requested partition by sale were not purchased. 15 (iii) If more than one co-tenant pays the entire price for the remain- 16 ing interest, the court shall reapportion those remaining interests 17 among those paying co-tenants, based on each paying co-tenant's original 18 fractional ownership of the entire parcel divided by the total original 19 fractional ownership of all co-tenants that paid the entire price for 20 the remaining interest. The court shall issue promptly an order reallo- 21 cating all of the co-tenants' interests, disburse the amounts held by 22 the court to the persons entitled to such amounts, and promptly refund 23 any excess payment held by the court. 24 (g) Not later than forty-five days after the court sends notice to the 25 parties pursuant to paragraph (a) of this subdivision, any co-tenant 26 entitled to buy an interest under this subdivision may request the court 27 to authorize the sale as part of the pending action of the interests of 28 co-tenants named as defendants and served with the complaint but that 29 did not appear in the action. 30 (h) If the court receives a timely request under paragraph (g) of this 31 subdivision, the court, after a hearing, may deny the request or author- 32 ize the requested additional sale on such terms as the court determines 33 are fair and reasonable, subject to the following limitations: 34 (i) a sale authorized under this subdivision may occur only after the 35 purchase prices for all interests subject to sale under paragraphs (a), 36 (b), (c), (d), (e) and (f) of this subdivision have been paid to the 37 court and such interests have been reallocated among the co-tenants as 38 provided in such paragraphs; and 39 (ii) the purchase price for the interest of a non-appearing co-tenant 40 is based on the court's determination of value under subdivision six of 41 this section. 42 8. Partition alternatives. (a) If all the interests of all co-tenants 43 that requested partition by sale are not purchased by other co-tenants 44 pursuant to subdivision seven of this section, or if after conclusion of 45 the buyout under subdivision seven of this section, a co-tenant remains 46 that has requested partition in kind, the court shall order partition in 47 kind unless the court, after consideration of the factors listed in 48 subdivision nine of this section, finds that partition in kind will 49 result in great manifest prejudice to the co-tenants as a group. In 50 considering whether to order partition in kind, the court shall approve 51 a request by two or more parties to have their individual interests 52 aggregated. 53 (b) If the court does not order partition in kind under paragraph (a) 54 of this subdivision, the court shall order partition by sale pursuant to 55 subdivision ten of this section provided that, if no co-tenant timely 56 requested partition by sale, the court shall dismiss the action.S. 4865--A 7 1 (c) If the court orders partition in kind pursuant to paragraph (a) of 2 this subdivision, the court may require that one or more co-tenants pay 3 one or more other co-tenants amounts so that the payments, taken togeth- 4 er with the value of the in kind distributions to the co-tenants, will 5 make the partition in kind just and proportionate in value to the frac- 6 tional interests held. 7 (d) If the court orders partition in kind, the court shall allocate to 8 the co-tenants that are unknown, cannot be located, or the subject of a 9 default judgment, if the co-tenants interests were not bought out pursu- 10 ant to subdivision seven of this section, a part of the property repres- 11 enting the combined interests of such co-tenants as determined by the 12 court and such part of the property shall remain undivided. 13 9. Considerations for partition in kind. (a) In determining under 14 subdivision eight of this section whether partition in kind would result 15 in great manifest prejudice to the co-tenants as a group, the court 16 shall consider the following: 17 (i) whether the heirs property practicably can be divided among the 18 co-tenants; 19 (ii) whether partition in kind would apportion the property in such a 20 way that the aggregate fair market value of the parcels resulting from 21 the division would be materially less than the amount reasonably 22 expected to be realized if the property were sold as a whole, taking 23 into account the conditions under which a court-ordered sale likely 24 would occur; 25 (iii) evidence of the collective duration of ownership or possession 26 of the property by a co-tenant and one or more predecessors in title or 27 predecessors in possession to the co-tenant who are or were relatives of 28 the co-tenant or each other; 29 (iv) a co-tenant's sentimental attachment to the property, including 30 any attachment arising because the property has ancestral or other 31 unique or special value to the co-tenant; 32 (v) the lawful use being made of the property by a resident or other 33 co-tenant and the degree to which any such co-tenant would be harmed if 34 the co-tenant could not continue the same use of the property; 35 (vi) the degree to which the co-tenants have contributed their pro 36 rata share of the property taxes, insurance, and other expenses associ- 37 ated with maintaining ownership of the property or have contributed to 38 the physical improvement, maintenance, or upkeep of the property; 39 (vii) the price, terms and conditions of the acquisition of the 40 co-tenant's interest in the property if such co-tenant is not a relative 41 of the person from whom it acquired his or her interest; and 42 (viii) any other relevant factor. 43 (b) The court shall not consider any one factor in paragraph (a) of 44 this subdivision to be dispositive without weighing the totality of all 45 relevant factors and circumstances. 46 10. Open-market sale, sealed bids, or auction. (a) If the court orders 47 a sale of heirs property, notwithstanding section two hundred thirty-one 48 of this chapter, such sale shall be an open-market sale under this 49 subdivision unless the court finds that a sale by sealed bids or an 50 auction would be more economically advantageous and in the best interest 51 of the co-tenants as a group. 52 (b) If the court orders an open-market sale and the parties, not later 53 than ten days after the entry of the order, agree on a real estate 54 broker licensed in this state to offer the property for sale, the court 55 shall appoint the broker and establish a reasonable commission. If the 56 parties do not agree on a broker, the court shall appoint a disinter-S. 4865--A 8 1 ested real estate broker licensed in this state to offer the property 2 for sale and shall establish a reasonable commission. The broker shall 3 offer the property for sale in a commercially reasonable manner at a 4 price no lower than the determination of value and on the terms and 5 conditions established by the court. 6 (c) If the broker appointed under paragraph (b) of this subdivision 7 obtains within a reasonable time an offer to purchase the property for 8 at least the determination of value: 9 (i) the broker shall comply with the reporting requirements in subdi- 10 vision eleven of this section; and 11 (ii) the sale may be completed in accordance with the laws of this 12 state other than this section. 13 (d) If the broker appointed under paragraph (b) of this subdivision 14 does not obtain within a reasonable time an offer to purchase the prop- 15 erty for at least the determination of value, the court, after a hear- 16 ing, may: 17 (i) order that the property continue to be offered for an additional 18 time, by the same or a substitute broker, in accordance with paragraph 19 (b) of this subdivision; or 20 (ii) if it determines that doing so would not be in the best interests 21 of the parties, approve the highest outstanding offer. 22 (e) If after the court has appointed a substitute broker and there are 23 no reasonable offers for the property, the court may order the property 24 be sold by sealed bids or an auction and, the court shall set terms and 25 conditions of the sale. If the court orders an auction, the auction 26 shall be conducted in accordance with section two hundred thirty-one of 27 this chapter. 28 (f) If a purchaser is entitled to a share of the proceeds of the sale, 29 the purchaser is entitled to a credit against the price in an amount 30 equal to the purchaser's share of the net proceeds. 31 11. Report of open-market sale. (a) Unless required to do so within a 32 shorter time by this article, a broker appointed under paragraph (b) of 33 subdivision ten of this section to offer heirs property for open-market 34 sale shall file a report with the court not later than seven days after 35 receiving an offer to purchase the property for at least the value 36 determined under subdivision six or ten of this section. 37 (b) The report required by paragraph (a) of this subdivision shall 38 contain the following information: 39 (i) a description of the property to be sold to each buyer; 40 (ii) the name of each buyer; 41 (iii) the proposed purchase price; 42 (iv) the terms and conditions of the proposed sale, including the 43 terms of any owner financing; 44 (v) the amounts to be paid to lienholders; 45 (vi) a statement of contractual or other arrangements or conditions of 46 the broker's commission; and 47 (vii) other material facts relevant to the sale. 48 § 2. This act shall take effect immediately.