Texas 2017 - 85th Regular

Texas House Bill HB1358 Compare Versions

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1	1	85R2649 BEE-D
2	2	By: Wray H.B. No. 1358
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the adoption of the Uniform Partition of Heirs'
8	8	Property Act.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Title 4, Property Code, is amended by adding
11	11	Chapter 23A to read as follows:
12	12	CHAPTER 23A. UNIFORM PARTITION OF HEIRS' PROPERTY ACT
13	13	Sec. 23A.001. SHORT TITLE. This chapter may be cited as the
14	14	Uniform Partition of Heirs' Property Act.
15	15	Sec. 23A.002. DEFINITIONS. In this chapter:
16	16	(1) "Ascendant" means an individual who precedes
17	17	another individual in lineage, in the direct line of ascent from the
18	18	other individual.
19	19	(2) "Collateral" means an individual who is related to
20	20	another individual under the law of intestate succession of this
21	21	state but who is not the other individual's ascendant or
22	22	descendant.
23	23	(3) "Descendant" means an individual who follows
24	24	another individual in lineage, in the direct line of descent from
25	25	the other individual.
26	26	(4) "Determination of value" means a court order
27	27	determining the fair market value of heirs' property under Section
28	28	23A.006 or 23A.010 or adopting the valuation of the property agreed
29	29	to by all cotenants.
30	30	(5) "Heirs' property" means real property held in
31	31	tenancy in common that satisfies all of the following requirements
32	32	as of the filing of a partition action:
33	33	(A) there is no agreement in a record binding all
34	34	the cotenants that governs the partition of the property;
35	35	(B) one or more of the cotenants acquired title
36	36	from a relative, whether living or deceased; and
37	37	(C) any of the following applies:
38	38	(i) 20 percent or more of the interests are
39	39	held by cotenants who are relatives;
40	40	(ii) 20 percent or more of the interests are
41	41	held by an individual who acquired title from a relative, whether
42	42	living or deceased; or
43	43	(iii) 20 percent or more of the cotenants
44	44	are relatives.
45	45	(6) "Partition by sale" means a court-ordered sale of
46	46	the entire heirs' property, whether by open-market sale, sealed
47	47	bids, or auction conducted under Section 23A.010.
48	48	(7) "Partition in kind" means the division of heirs'
49	49	property into physically distinct and separately titled parcels.
50	50	(8) "Record" means information that is inscribed on a
51	51	tangible medium or that is stored in an electronic or other medium
52	52	and is retrievable in perceivable form.
53	53	(9) "Relative" means an ascendant, descendant, or
54	54	collateral or an individual otherwise related to another individual
55	55	by blood, marriage, adoption, or law of this state other than this
56	56	chapter.
57	57	Sec. 23A.003. APPLICABILITY; RELATION TO OTHER LAW. (a) In
58	58	an action to partition real property under Chapter 23, the court
59	59	shall determine whether the property is heirs' property. If the
60	60	court determines that the property is heirs' property, the property
61	61	must be partitioned under this chapter unless all of the cotenants
62	62	otherwise agree in a record.
63	63	(b) This chapter supplements Chapter 23 and the Texas Rules
64	64	of Civil Procedure governing partition of real property. If an
65	65	action is governed by this chapter, this chapter supersedes
66	66	provisions of Chapter 23 and the Texas Rules of Civil Procedure
67	67	governing partition of real property that are inconsistent with
68	68	this chapter.
69	69	Sec. 23A.004. SERVICE; NOTICE BY POSTING. (a) This chapter
70	70	does not limit or affect the method by which service of a petition
71	71	in a partition action may be made.
72	72	(b) If the plaintiff in a partition action seeks citation by
73	73	publication and the court determines that the property may be
74	74	heirs' property, the plaintiff, not later than the 10th day after
75	75	the date the determination is made, shall post, and maintain while
76	76	the action is pending, a conspicuous sign on the property that is
77	77	the subject of the action. The sign must state that the action has
78	78	commenced and identify the name and address of the court and the
79	79	common designation by which the property is known. The court may
80	80	require the plaintiff to publish on the sign the name of the
81	81	plaintiff and the known defendants.
82	82	Sec. 23A.005. COMMISSIONERS. If the court appoints
83	83	commissioners under Rule 761, Texas Rules of Civil Procedure, each
84	84	commissioner, in addition to the requirements and
85	85	disqualifications applicable to commissioners under that rule,
86	86	must be impartial and may not be a party to or a participant in the
87	87	action.
88	88	Sec. 23A.006. DETERMINATION OF VALUE. (a) Except as
89	89	provided by Subsection (b) or (c), if the court determines that the
90	90	property that is the subject of a partition action is heirs'
91	91	property, the court shall determine the fair market value of the
92	92	property by ordering an appraisal under Subsection (d).
93	93	(b) If all cotenants have agreed to the value of the
94	94	property or to another method of valuation, the court shall adopt
95	95	that value or the value produced by the agreed method of valuation.
96	96	(c) If the court determines that the evidentiary value of an
97	97	appraisal is outweighed by the cost of the appraisal, the court,
98	98	after an evidentiary hearing, shall determine the fair market value
99	99	of the property and send notice to the parties of the value.
100	100	(d) If the court orders an appraisal, the court shall
101	101	appoint a disinterested real estate appraiser to determine the fair
102	102	market value of the property assuming sole ownership of the fee
103	103	simple estate. On completion of the appraisal, the appraiser shall
104	104	file a sworn or verified appraisal with the court.
105	105	(e) If an appraisal is conducted under Subsection (d), not
106	106	later than the 10th day after the date the appraisal is filed, the
107	107	court shall send notice to each party with a known address, stating:
108	108	(1) the appraised fair market value of the property;
109	109	(2) that the appraisal is available at the clerk's
110	110	office; and
111	111	(3) that a party may file with the court an objection
112	112	to the appraisal not later than the 30th day after the date notice
113	113	is sent, stating the grounds for the objection.
114	114	(f) If an appraisal is filed with the court under Subsection
115	115	(d), the court shall conduct a hearing to determine the fair market
116	116	value of the property not earlier than the 30th day after the date a
117	117	copy of the notice of the appraisal is sent to each party under
118	118	Subsection (e), whether or not an objection to the appraisal is
119	119	filed under Subsection (e)(3). In addition to the court-ordered
120	120	appraisal, the court may consider any other evidence of value
121	121	offered by a party.
122	122	(g) After a hearing under Subsection (f), but before
123	123	considering the merits of the partition action, the court shall
124	124	determine the fair market value of the property and send notice to
125	125	the parties of the value.
126	126	Sec. 23A.007. COTENANT BUYOUT. (a) If any cotenant
127	127	requested partition by sale, after the determination of value under
128	128	Section 23A.006, the court shall send notice to the parties that any
129	129	cotenant except a cotenant that requested partition by sale may buy
130	130	all the interests of the cotenants that requested partition by
131	131	sale.
132	132	(b) Not later than the 45th day after the date notice is sent
133	133	under Subsection (a), any cotenant except a cotenant that requested
134	134	partition by sale may give notice to the court that the cotenant
135	135	elects to buy all the interests of the cotenants that requested
136	136	partition by sale.
137	137	(c) The purchase price for each of the interests of a
138	138	cotenant that requested partition by sale is the value of the entire
139	139	parcel determined under Section 23A.006 multiplied by the
140	140	cotenant's fractional ownership of the entire parcel.
141	141	(d) After the period provided by Subsection (b) expires:
142	142	(1) if only one cotenant elects to buy all the
143	143	interests of the cotenants that requested partition by sale, the
144	144	court shall notify all the parties of that fact;
145	145	(2) if more than one cotenant elects to buy all the
146	146	interests of the cotenants that requested partition by sale, the
147	147	court shall:
148	148	(A) allocate the right to buy those interests
149	149	among the electing cotenants based on each electing cotenant's
150	150	existing fractional ownership of the entire parcel divided by the
151	151	total existing fractional ownership of all cotenants electing to
152	152	buy; and
153	153	(B) send notice to all the parties of that fact
154	154	and of the price to be paid by each electing cotenant; or
155	155	(3) if no cotenant elects to buy all the interests of
156	156	the cotenants that requested partition by sale, the court shall:
157	157	(A) send notice to all the parties of that fact;
158	158	and
159	159	(B) resolve the partition action under Section
160	160	23A.008(a) or (b).
161	161	(e) If the court sends notice to the parties under
162	162	Subsection (d)(1) or (2), the court shall set a date, not earlier
163	163	than the 60th day after the date notice was sent, by which an
164	164	electing cotenant must pay the cotenant's apportioned price into
165	165	the court. After that date:
166	166	(1) if all electing cotenants timely pay their
167	167	apportioned price into court, the court shall:
168	168	(A) issue an order reallocating all the interests
169	169	of the cotenants; and
170	170	(B) disburse the amounts held by the court to the
171	171	persons entitled to them;
172	172	(2) if no electing cotenant timely pays its
173	173	apportioned price, the court shall resolve the partition action
174	174	under Section 23A.008(a) or (b) as if the interests of the cotenants
175	175	that requested partition by sale were not purchased; or
176	176	(3) if one or more but not all of the electing
177	177	cotenants fail to pay their apportioned price on time, the court
178	178	shall give notice to the electing cotenants that paid their
179	179	apportioned price of the interest remaining and the price for all
180	180	that interest.
181	181	(f) Not later than the 20th day after the date the court
182	182	gives notice under Subsection (e)(3), any cotenant that paid may
183	183	elect to purchase all of the remaining interest by paying the entire
184	184	price into the court. After that period expires:
185	185	(1) if only one cotenant pays the entire price for the
186	186	remaining interest, the court shall:
187	187	(A) issue an order reallocating the remaining
188	188	interest to that cotenant;
189	189	(B) promptly issue an order reallocating the
190	190	interests of all of the cotenants; and
191	191	(C) disburse the amounts held by the court to the
192	192	persons entitled to the amounts;
193	193	(2) if no cotenant pays the entire price for the
194	194	remaining interest, the court shall resolve the partition action
195	195	under Section 23A.008(a) or (b) as if the interests of the cotenants
196	196	that requested partition by sale were not purchased; or
197	197	(3) if more than one cotenant pays the entire price for
198	198	the remaining interest, the court shall:
199	199	(A) reapportion the remaining interest among
200	200	those paying cotenants, based on each paying cotenant's original
201	201	fractional ownership of the entire parcel divided by the total
202	202	original fractional ownership of all cotenants that paid the entire
203	203	price for the remaining interest;
204	204	(B) promptly issue an order reallocating all of
205	205	the cotenants' interests;
206	206	(C) disburse the amounts held by the court to the
207	207	persons entitled to the amounts; and
208	208	(D) promptly refund any excess payment held by
209	209	the court.
210	210	(g) Not later than the 45th day after the date the court
211	211	sends notice to the parties under Subsection (a), any cotenant
212	212	entitled to buy an interest under this section may request the court
213	213	to authorize the sale as part of the pending action of the interests
214	214	of cotenants named as defendants and served with the complaint but
215	215	that did not appear in the action.
216	216	(h) If the court receives a timely request under Subsection
217	217	(g), the court, after hearing, may deny the request or authorize the
218	218	requested additional sale on such terms as the court determines are
219	219	fair and reasonable, subject to the following limitations:
220	220	(1) a sale authorized under this subsection may occur
221	221	only after the purchase prices for all interests subject to sale
222	222	under Subsections (a) through (f) have been paid into court and
223	223	those interests have been reallocated among the cotenants as
224	224	provided in those subsections; and
225	225	(2) the purchase price for the interest of a
226	226	nonappearing cotenant is based on the court's determination of
227	227	value under Section 23A.006.
228	228	Sec. 23A.008. PARTITION ALTERNATIVES. (a) If all the
229	229	interests of all cotenants that requested partition by sale are not
230	230	purchased by other cotenants under Section 23A.007, or if after
231	231	conclusion of the buyout under Section 23A.007 a cotenant remains
232	232	that has requested partition in kind, the court shall order
233	233	partition in kind unless the court, after consideration of the
234	234	factors listed in Section 23A.009, finds that partition in kind
235	235	will result in substantial prejudice to the cotenants as a group.
236	236	In considering whether to order partition in kind, the court shall
237	237	approve a request by two or more parties to have the requesting
238	238	parties' individual interests aggregated.
239	239	(b) If the court does not order partition in kind under
240	240	Subsection (a), the court shall order partition by sale under
241	241	Section 23A.010 or, if no cotenant requested partition by sale, the
242	242	court shall dismiss the action.
243	243	(c) If the court orders partition in kind under Subsection
244	244	(a), the court may require that one or more cotenants pay one or
245	245	more other cotenants amounts so that the payments, taken together
246	246	with the value of the in-kind distributions to the cotenants, will
247	247	make the partition in kind just and proportionate in value to the
248	248	fractional interests held.
249	249	(d) If the court orders partition in kind, the court shall
250	250	allocate to the cotenants that are unknown, unlocatable, or the
251	251	subject of a default judgment, if those cotenants' interests were
252	252	not bought out under Section 23A.007, a part of the property
253	253	representing the combined interests of those cotenants as
254	254	determined by the court, and that part of the property shall remain
255	255	undivided.
256	256	Sec. 23A.009. CONSIDERATIONS FOR PARTITION IN KIND. (a) In
257	257	determining under Section 23A.008(a) whether partition in kind
258	258	would result in substantial prejudice to the cotenants as a group,
259	259	the court shall consider the following:
260	260	(1) whether the heirs' property practicably can be
261	261	divided among the cotenants;
262	262	(2) whether partition in kind would apportion the
263	263	property in such a way that the aggregate fair market value of the
264	264	parcels resulting from the division would be materially less than
265	265	the value of the property if the property were sold as a whole,
266	266	taking into account the condition under which a court-ordered sale
267	267	likely would occur;
268	268	(3) evidence of the collective duration of ownership
269	269	or possession of the property by a cotenant and one or more
270	270	predecessors in title or predecessors in possession to the cotenant
271	271	who are or were relatives of the cotenant or each other;
272	272	(4) a cotenant's sentimental attachment to the
273	273	property, including any attachment arising because the property has
274	274	ancestral or other unique or special value to the cotenant;
275	275	(5) the lawful use being made of the property by a
276	276	cotenant and the degree to which the cotenant would be harmed if the
277	277	cotenant could not continue the same use of the property;
278	278	(6) the degree to which the cotenants have contributed
279	279	the cotenants' pro rata share of the property taxes, insurance, and
280	280	other expenses associated with maintaining ownership of the
281	281	property or have contributed to the physical improvement,
282	282	maintenance, or upkeep of the property; and
283	283	(7) any other relevant factor.
284	284	(b) The court may not consider any one factor under
285	285	Subsection (a) to be dispositive without weighing the totality of
286	286	all relevant factors and circumstances.
287	287	Sec. 23A.010. OPEN-MARKET SALE, SEALED BIDS, OR AUCTION.
288	288	(a) If the court orders a sale of heirs' property, the sale must be
289	289	an open-market sale unless the court finds that a sale by sealed
290	290	bids or at an auction would be more economically advantageous and in
291	291	the best interest of the cotenants as a group.
292	292	(b) If the court orders an open-market sale and the parties,
293	293	not later than the 10th day after the date the order is entered,
294	294	agree on a real estate broker to offer the property for sale, the
295	295	court shall appoint the broker and establish a reasonable
296	296	commission. If the parties do not agree on a broker, the court
297	297	shall appoint a disinterested real estate broker to offer the
298	298	property for sale and shall establish a reasonable commission. The
299	299	broker shall offer the property for sale in a commercially
300	300	reasonable manner at a price no lower than the determination of
301	301	value and on the terms and conditions established by the court.
302	302	(c) If the broker appointed under Subsection (b) obtains
303	303	within a reasonable time an offer to purchase the property for at
304	304	least the determination of value:
305	305	(1) the broker shall comply with the reporting
306	306	requirements of Section 23A.011; and
307	307	(2) the sale may be completed in accordance with state
308	308	law other than this chapter.
309	309	(d) If the broker appointed under Subsection (b) does not
310	310	obtain within a reasonable time an offer to purchase the property
311	311	for at least the determination of value, the court, after hearing,
312	312	may:
313	313	(1) approve the highest outstanding offer, if any;
314	314	(2) redetermine the value of the property and order
315	315	that the property continue to be offered for an additional time; or
316	316	(3) order that the property be sold by sealed bids or
317	317	at an auction.
318	318	(e) If the court orders a sale by sealed bids or at an
319	319	auction, the court shall set terms and conditions of the sale. If
320	320	the court orders an auction, the auction must be conducted in the
321	321	manner provided by law for a sale made under execution.
322	322	(f) If a purchaser is entitled to a share of the proceeds of
323	323	the sale, the purchaser is entitled to a credit against the price in
324	324	an amount equal to the purchaser's share of the proceeds.
325	325	Sec. 23A.011. REPORT OF OPEN-MARKET SALE. (a) Unless
326	326	required to do so earlier by other law governing the partition of
327	327	real property, a broker appointed under Section 23A.010(b) to offer
328	328	heirs' property for open-market sale shall file a report with the
329	329	court not later than the seventh day after the date an offer is
330	330	received to purchase the property for at least the value determined
331	331	under Section 23A.006 or 23A.010.
332	332	(b) The report required by Subsection (a) must contain the
333	333	following information:
334	334	(1) a description of the property to be sold to each
335	335	buyer;
336	336	(2) the name of each buyer;
337	337	(3) the proposed purchase price;
338	338	(4) the terms and conditions of the proposed sale,
339	339	including the terms of any owner financing;
340	340	(5) the amounts to be paid to lienholders;
341	341	(6) a statement of contractual or other arrangements
342	342	or conditions of the broker's commission; and
343	343	(7) other material facts relevant to the sale.
344	344	Sec. 23A.012. UNIFORMITY OF APPLICATION AND CONSTRUCTION.
345	345	In applying and construing this chapter, consideration must be
346	346	given to the need to promote uniformity of the law with respect to
347	347	the subject matter of this chapter among states that enact a law
348	348	based on the uniform act on which this chapter is based.
349	349	Sec. 23A.013. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL
350	350	AND NATIONAL COMMERCE ACT. This chapter modifies, limits, and
351	351	supersedes the Electronic Signatures in Global and National
352	352	Commerce Act (15 U.S.C. Section 7001 et seq.) but does not modify,
353	353	limit, or supersede Section 101(c) of that act (15 U.S.C. Section
354	354	7001(c)) or authorize electronic delivery of any of the notices
355	355	described in Section 103(b) of that act (15 U.S.C. Section
356	356	7003(b)).
357	357	SECTION 2. Chapter 23A, Property Code, as added by this Act,
358	358	applies only to a partition action commenced on or after the
359	359	effective date of this Act. A partition action commenced before the
360	360	effective date of this Act is governed by the law as it existed
361	361	immediately before the effective date of this Act, and that law is
362	362	continued in effect for that purpose.
363	363	SECTION 3. This Act takes effect September 1, 2017.