N.Y. Real Property Actions & Proceedings Law § 993: Uniform partition of heirs property act

§ 993. Uniform partition of heirs property act. 1. Short title. This

section shall be known as the "uniform partition of heirs property act".

2. Definitions. For purposes of this section, the following terms

shall have the following meanings:

(a) "Ascendant" means an individual who precedes another individual in

lineage, in the direct line of ascent from such other individual.

(b) "Collateral" means an individual who is related to another

individual under the law of intestate succession of this state but who

is not such other individual's ascendant or descendant.

(c) "Descendant" means an individual who follows another individual in

lineage, in the direct line of descent from such other such individual.

(d) "Determination of value" means a court order determining the fair

market value of heirs property under subdivision six or ten of this

section or adopting the valuation of the property agreed to by all

co-tenants.

(e) "Heirs property" means real property held in tenancy in common

which satisfies all of the following requirements as of the filing of a

partition action:

(i) there is no agreement in a record binding all of the co-tenants

which governs the partition of the property;

(ii) any of the co-tenants acquired title from a relative, whether

living or deceased;

(iii) the property is used for residential or agricultural purposes;

and

(iv) any of the following applies:

(A) twenty percent or more of the interests are held by co-tenants who

are relatives;

(B) twenty percent or more of the interests are held by an individual

who acquired title from a relative, whether living or deceased;

(C) twenty percent or more of the co-tenants are relatives of each

other; or

(D) any co-tenant who acquired title from a relative resides in the

property.

(f) "Partition by sale" means a court-ordered sale of the entire heirs

property, or the portion thereof in which any co-tenant who acquired

title from a relative resides, whether by auction, sealed bids, or

open-market sale conducted under subdivision ten of this section.

(g) "Partition in kind" means partition or division of heirs property

into physically distinct and separately titled parcels.

(h) "Record" means information that is inscribed on a tangible medium

or that is stored in an electronic or other medium and is retrievable in

perceivable form.

(i) "Relative" means an ascendant, descendant, or collateral or an

individual otherwise related to another individual by blood, marriage,

adoption, or law of this state other than under this section.

3. Applicability; relation to other law. (a) This section applies to

partition actions filed on or after the effective date of this section.

(b) In any action to partition real property, the court shall

determine, after notice and the right to be heard afforded to each

party, whether the property is heirs property. If the court determines

that the property is heirs property, the property shall be partitioned

in accordance with this section unless all of the co-tenants otherwise

agree in a record.

(c) This section shall supplement the general partition statute of

this article and, if an action is governed by this section, shall

replace the provisions of such general partition statute that are

inconsistent with this section.

4. Service; notice by posting. (a) This section shall not limit or

affect the method by which service of a complaint in a partition action

may be made.

(b) If the plaintiff in a partition action seeks an order of notice by

publication and the court determines that the property may be heirs

property, the plaintiff, not later than ten days after the court's

determination, shall post and maintain while the action is pending a

conspicuous sign on the property that is the subject of the action. The

sign shall state that the action has commenced and identify the name and

address of the court and the common designation by which the property is

known. The court may require the plaintiff to publish on the sign the

name of the plaintiff and the known defendants.

5. Settlement conference. (a) In any partition action of heirs

property, plaintiffs shall file proof of service within twenty days of

such service, however service is made, and the court shall hold a

mandatory conference within sixty days after the date when a request for

judicial intervention is filed, or on such adjourned date as has been

agreed to by the parties, for the purpose of holding settlement

discussions pertaining to the relative rights and obligations of the

parties with respect to the subject property including, but not limited

to, as set forth in this section.

(b) Upon the filing of a request for judicial intervention, the court

shall promptly send a notice to parties advising them of the time and

place of the settlement conference, the purpose of the conference and

the requirements of this section. The notice shall be in a form

prescribed by the office of court administration, or, at the discretion

of the office of court administration, the administrative judge of the

judicial district in which the action is pending. Plaintiff shall post a

copy of the settlement conference notice in a conspicuous place on the

property within twenty days of the date of the notice.

(c) The settlement conference may be adjourned or reconvened from time

to time as appropriate during the pendency of the partition action. At

any conference held pursuant to this section, the plaintiffs and the

defendants shall appear in person or by counsel, and each party's

representative at the conference shall be fully authorized to dispose of

the entirety or any portion of the case. If the defendant is appearing

pro se, the court shall advise the defendant of the nature of the action

and his or her rights and responsibilities as a defendant.

(d) At the first settlement conference held pursuant to this section,

if the defendant has not filed an answer or made a pre-answer motion to

dismiss, the court shall (i) advise the defendant of the requirement to

answer the complaint, (ii) explain what is required to answer a

complaint in court, (iii) advise that the ability to contest the

partition action and assert defenses may be lost if an answer is not

interposed, (iv) set a deadline for any co-tenants requesting partition

by sale, and (v) provide information about available resources for legal

assistance. A defendant who appears at the settlement conference but who

failed to file a timely answer, pursuant to rule three hundred twenty of

the civil practice law and rules, shall be presumed to have a reasonable

excuse for the default and shall be permitted to serve and file an

answer, without any substantive defenses deemed to have been waived,

within thirty days of initial appearance at the settlement conference.

The default shall be deemed vacated upon service and filing of an

answer.

(e) Both the plaintiffs and defendants shall negotiate in good faith

to reach a mutually agreeable resolution including, but not limited to,

a tenancy in common agreement, a co-tenant buyout and the allocation,

mechanics and financing thereof as provided in subdivision seven of this

section, a partition in kind as provided in subdivisions eight and nine

of this section, an open market sale as provided in subdivision ten of

this section, or any other agreement or loss mitigation that is fair and

reasonable considering the totality of factors listed in paragraph (a)

of subdivision nine of this section.

(f) If the parties do not reach a mutually agreeable resolution, the

referee, judicial hearing officer, or other staff designated by the

court to oversee the settlement conference process shall make a report

of findings of fact, conclusions of law and recommendations for relief

to the court concerning any party's failure to negotiate in good faith

pursuant to paragraph (e) of this subdivision. If the court determines a

plaintiff has failed to negotiate in good faith, the partition action

shall be dismissed.

(g) Any motions submitted by any party to the action may be held in

abeyance while the settlement conference process is ongoing, except for

motions concerning (i) a determination of the percentage interests, if

any, owned by any alleged co-tenant if such interests are in dispute and

(ii) compliance with this rule and its implementing rules including

applications to extend in the interests of justice any deadlines fixed

herein.

(h) In addition to any other qualifications otherwise required, each

commissioner appointed under section nine hundred fifteen of this

article and any officer appointed to conduct a sale shall be

disinterested, impartial and not related to a party to or participant in

the action.

6. Determination of value. (a) If the court determines that the

property that is the subject of a partition action is heirs property,

the court shall determine the fair market value of the heirs property

for purposes of subdivision seven of this section as follows, utilizing

paragraph (d) of this subdivision, unless it has determined that

paragraph (b) or (c) of this subdivision apply.

(b) If all co-tenants have agreed to the value of the property or to

another method of valuation, the court shall adopt such value or the

value produced by the agreed method of valuation.

(c) 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 of the value to the parties.

(d) If paragraph (b) or (c) of this subdivision do not apply, the

court shall order an appraisal by a disinterested real estate appraiser

licensed in this state to determine the fair market value of the

property. Any determination of value under paragraph (c), (d), (f) or

(g) of this subdivision shall assume sole ownership of the fee simple

estate. On completion of the appraisal, the appraiser shall file a sworn

or verified appraisal with the court.

(e) Not later than ten days after an appraisal is filed under

paragraph (d) of this subdivision, the court shall send notice to each

party with a known address, stating:

(i) the appraised fair market value of the property plus the allowed

cost of the appraisal;

(ii) that the appraisal is available at the clerk's office; and

(iii) that a party may file with the court an objection to the

appraisal not later than thirty days after the notice is sent, stating

the grounds for the objection.

(f) If an appraisal is filed with the court pursuant to paragraph (d)

of this subdivision, the court shall conduct a hearing to determine the

fair market value of the property not sooner than thirty days after a

copy of the notice of the appraisal is sent to each party under

paragraph (e) of this subdivision, whether or not an objection to the

appraisal is filed under subparagraph (iii) of paragraph (e) of this

subdivision. In addition to the court-ordered appraisal, the court may

consider any other evidence of value offered by a party.

(g) After a hearing under paragraph (f) of this subdivision, 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.

7. Co-tenant buyout. (a) Every co-tenant who requests or joins a

request for partition of heirs property by sale has thereby agreed that

his or her interest may be acquired in accordance herewith at the value

determined under subdivision six of this section by the co-tenants who

have not sought or joined in the request for partition by sale. Upon

determination that the property is heirs property and prior to the

determination of value under subdivision six of this section, the court

shall send notice to all parties identifying the owners of interests

that have sought partition by sale, the percentage interests such owners

allege to hold and of the right of the remaining co-tenants to avert

partition by sale by exercising the right to purchase all of the

interests of the co-tenants who requested partition by sale.

(b) Not later than forty-five days after the notice of the

determination of value under subdivision six of this section is sent and

by the date specified in such notice, any co-tenant, except a co-tenant

that requested partition by sale, may give notice to the court of the

total amount of percentage interests subject to purchase that he or she

elects to buy; provided, however, the court shall make a determination

of each co-tenant's percentage ownership interest in the property prior

to sending notice of the determination of value if such interest is in

dispute and shall consider all facts as determined by the court and

presented by the parties, and all laws and rules that govern the

transfer, succession and acquisition of title through probate, intestacy

or otherwise.

(c) The purchase price for percentage interests shall be the value of

the entire parcel determined under subdivision six of this section

multiplied by the aggregate amount of the percentage interests subject

to purchase.

(d) After expiration of the period in paragraph (b) of this

subdivision, the following rules apply:

(i) If one or more co-tenants have elected in the aggregate to buy at

least the total amount of percentage interests subject to purchase, the

court shall notify all the parties of such fact.

(ii) If the electing co-tenants' offers equal or exceed the amount of

percentage interests subject to purchase, the court shall allocate the

right to buy those interests among the electing co-tenants based on each

electing co-tenant's existing fractional ownership of the entire parcel

divided by the total existing fractional ownership of all co-tenants

electing to buy, reserving priority, first, to electing co-tenants who

acquired the interest from a relative and reside in the property and,

second, to all other electing co-tenants who acquired their interest

from a relative, and send notice to all the parties of the foregoing and

of the price to be paid by each electing co-tenant.

(iii) If co-tenants with the right to elect fail to elect to purchase

the entirety of the interests of the co-tenants whose interests are

subject to purchase, the court shall send notice to all the parties of

such fact and resolve the partition action under paragraphs (a) and (b)

of subdivision eight of this section.

(e) If the court sends notice to the parties under subparagraph (i) or

(ii) of paragraph (d) of this subdivision, the court shall set a date,

not sooner than sixty days after the date the notice was sent, by which

electing co-tenants must pay their apportioned price into the court.

After this date, the following rules apply:

(i) If all electing co-tenants timely pay his or her apportioned price

to the court, the court shall issue an order reallocating all the

interests of the co-tenants and disburse the amounts held by the court

to the persons entitled to them.

(ii) If no electing co-tenant timely pays his or her apportioned

price, the court shall resolve the partition action under paragraphs (a)

and (b) of subdivision eight of this section as if the interests of the

co-tenants that requested partition by sale were not purchased.

(iii) If one or more, but not all, of the electing co-tenants fail to

pay their apportioned price on time, the court, on motion, shall give

notice to the electing co-tenants that paid their apportioned price of

percentage of the unpurchased interests remaining and the price for all

such interests.

(f) Not later than twenty days after the court gives notice pursuant

to subparagraph (iii) of paragraph (e) of this subdivision, any

co-tenant that paid his or her apportioned price may elect to purchase

all of the remaining interest by paying the entire price to the court.

After the twenty day period, the following rules shall apply:

(i) If only one co-tenant pays the entire price for the remaining

interest, the court shall issue an order reallocating the remaining

interest to such co-tenant. The court shall issue promptly an order

reallocating the interests of all of the co-tenants and disburse the

amounts held by the court to the persons entitled to such amounts.

(ii) If no co-tenant pays the entire price for the remaining interest,

the court shall resolve the partition action under paragraphs (a) and

(b) of subdivision eight of this section as if the interests of the

co-tenants that requested partition by sale were not purchased.

(iii) If more than one co-tenant pays the entire price for the

remaining interest, the court shall reapportion those remaining

interests among those paying co-tenants, based on each paying

co-tenant's original fractional ownership of the entire parcel divided

by the total original fractional ownership of all co-tenants that paid

the entire price for the remaining interest. The court shall issue

promptly an order reallocating all of the co-tenants' interests,

disburse the amounts held by the court to the persons entitled to such

amounts, and promptly refund any excess payment held by the court.

(g) Not later than forty-five days after the court sends notice to the

parties pursuant to paragraph (a) of this subdivision, any co-tenant

entitled to buy an interest under this subdivision may request the court

to authorize the sale as part of the pending action of the interests of

co-tenants named as defendants and served with the complaint but that

did not appear in the action.

(h) If the court receives a timely request under paragraph (g) of this

subdivision, the court, after a hearing, may deny the request or

authorize the requested additional sale on such terms as the court

determines are fair and reasonable, subject to the following

limitations:

(i) a sale authorized under this subdivision may occur only after the

purchase prices for all interests subject to sale under paragraphs (a),

(b), (c), (d), (e) and (f) of this subdivision have been paid to the

court and such interests have been reallocated among the co-tenants as

provided in such paragraphs; and

(ii) the purchase price for the interest of a non-appearing co-tenant

is based on the court's determination of value under subdivision six of

this section.

8. Partition alternatives. (a) If all the interests of all co-tenants

that requested partition by sale are not purchased by other co-tenants

pursuant to subdivision seven of this section, or if after conclusion of

the buyout under subdivision seven of this section, a co-tenant remains

that has requested partition in kind, the court shall order partition in

kind unless the court, after consideration of the factors listed in

subdivision nine of this section, finds that partition in kind will

result in great manifest prejudice to the co-tenants as a group. In

considering whether to order partition in kind, the court shall approve

a request by two or more parties to have their individual interests

aggregated.

(b) If the court does not order partition in kind under paragraph (a)

of this subdivision, the court shall order partition by sale pursuant to

subdivision ten of this section provided that, if no co-tenant timely

requested partition by sale, the court shall dismiss the action.

(c) If the court orders partition in kind pursuant to paragraph (a) of

this subdivision, the court may require that one or more co-tenants pay

one or more other co-tenants amounts so that the payments, taken

together with the value of the in kind distributions to the co-tenants,

will make the partition in kind just and proportionate in value to the

fractional interests held.

(d) If the court orders partition in kind, the court shall allocate to

the co-tenants that are unknown, cannot be located, or the subject of a

default judgment, if the co-tenants interests were not bought out

pursuant to subdivision seven of this section, a part of the property

representing the combined interests of such co-tenants as determined by

the court and such part of the property shall remain undivided.

9. Considerations for partition in kind. (a) In determining under

subdivision eight of this section whether partition in kind would result

in great manifest prejudice to the co-tenants as a group, the court

shall consider the following:

(i) whether the heirs property practicably can be divided among the

co-tenants;

(ii) 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 amount reasonably

expected to be realized if the property were sold as a whole, taking

into account the conditions under which a court-ordered sale likely

would occur;

(iii) evidence of the collective duration of ownership or possession

of the property by a co-tenant and one or more predecessors in title or

predecessors in possession to the co-tenant who are or were relatives of

the co-tenant or each other;

(iv) a co-tenant's sentimental attachment to the property, including

any attachment arising because the property has ancestral or other

unique or special value to the co-tenant;

(v) the lawful use being made of the property by a resident or other

co-tenant and the degree to which any such co-tenant would be harmed if

the co-tenant could not continue the same use of the property;

(vi) the degree to which the co-tenants 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;

(vii) the price, terms and conditions of the acquisition of the

co-tenant's interest in the property if such co-tenant is not a relative

of the person from whom it acquired his or her interest; and

(viii) any other relevant factor.

(b) The court shall not consider any one factor in paragraph (a) of

this subdivision to be dispositive without weighing the totality of all

relevant factors and circumstances.

10. Open-market sale, sealed bids, or auction. (a) If the court orders

a sale of heirs property, notwithstanding section two hundred thirty-one

of this chapter, such sale shall be an open-market sale under this

subdivision unless the court finds that a sale by sealed bids or an

auction would be more economically advantageous and in the best interest

of the co-tenants as a group.

(b) If the court orders an open-market sale and the parties, not later

than ten days after the entry of the order, 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

disinterested real estate broker licensed in this state 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 and on the

terms and conditions established by the court.

(c) If the broker appointed under paragraph (b) of this subdivision

obtains within a reasonable time an offer to purchase the property for

at least the determination of value:

(i) the broker shall comply with the reporting requirements in

subdivision eleven of this section; and

(ii) the sale may be completed in accordance with the laws of this

state other than this section.

(d) If the broker appointed under paragraph (b) of this subdivision

does not obtain within a reasonable time an offer to purchase the

property for at least the determination of value, the court, after a

hearing, may:

(i) order that the property continue to be offered for an additional

time, by the same or a substitute broker, in accordance with paragraph

(b) of this subdivision; or

(ii) if it determines that doing so would not be in the best interests

of the parties, approve the highest outstanding offer.

(e) If after the court has appointed a substitute broker and there are

no reasonable offers for the property, the court may order the property

be sold by sealed bids or an auction and, the court shall set terms and

conditions of the sale. If the court orders an auction, the auction

shall be conducted in accordance with section two hundred thirty-one of

this chapter.

(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 net proceeds.

11. Report of open-market sale. (a) Unless required to do so within a

shorter time by this article, a broker appointed under paragraph (b) of

subdivision ten of this section to offer heirs property for open-market

sale shall file a report with the court not later than seven days after

receiving an offer to purchase the property for at least the value

determined under subdivision six or ten of this section.

(b) The report required by paragraph (a) of this subdivision shall

contain the following information:

(i) a description of the property to be sold to each buyer;

(ii) the name of each buyer;

(iii) the proposed purchase price;

(iv) the terms and conditions of the proposed sale, including the

terms of any owner financing;

(v) the amounts to be paid to lienholders;

(vi) a statement of contractual or other arrangements or conditions of

the broker's commission; and

(vii) other material facts relevant to the sale.

12. Prohibition on initiation of a partition action. No partition

action related to an heirs property may be initiated by a party that

purchased or otherwise acquired their share or shares by means other

than inheritance, and who did not inherit their share or shares directly

from a person who was a co-tenant prior to the property becoming heirs

property or from a co-tenant who was an heir thereto.

13. Right of first refusal. (a) When a co-tenant receives a bona fide

offer from a non-co-tenant to purchase a share or shares of an heirs

property and the co-tenant intends to accept or respond with a

counteroffer, the co-tenants who inherited their share or shares of the

property, or the co-tenants who are relatives to those co-tenants who

inherited their share or shares of the property shall have the right to

purchase such shares for the identical price, terms, and conditions of

the offer or counteroffer, with first priority to any co-tenant who

occupies the property as their primary residence and second priority to

any co-tenant who otherwise utilizes the property.

(b) It shall be the duty of the non-co-tenant who made the initial

offer for the share or shares of the property as well as the co-tenant

who received the offer to exercise all due diligence to identify all of

the other co-tenants to the property and notify such co-tenants of the

pending offer. Such notice shall include the names, addresses, phone

numbers and electronic mail addresses of all of the other co-tenants.

Notice shall be made in the same manner as set forth in section three

hundred eight of the civil practice law and rules. The other co-tenants

shall have one hundred eighty days from the date they are notified of

the offer to match such offer.

(c) In the event that the other co-tenants are not notified of the

offer and the sale is completed, and the offeror did not exercise the

required due diligence to notify the other co-tenants of the heirs

property, the other co-tenants shall have the right to purchase the

shares from the non-relative co-tenant for the price paid by such

non-relative co-tenant, plus any applicable interest at a rate of two

percent per annum. Such right shall expire one hundred eighty days after

the other co-tenants to the heirs property are made aware of the sale.