Texas 2017 - 85th Regular

Texas Senate Bill SB499 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: West S.B. No. 499
2		-	(Wray)
	1	+	S.B. No. 499
3	2
4	3
5		-	A BILL TO BE ENTITLED
6	4		AN ACT
7	5		relating to the adoption of the Uniform Partition of Heirs'
8	6		Property Act.
9	7		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	8		SECTION 1. Title 4, Property Code, is amended by adding
11	9		Chapter 23A to read as follows:
12	10		CHAPTER 23A. UNIFORM PARTITION OF HEIRS' PROPERTY ACT
13	11		Sec. 23A.001. SHORT TITLE. This chapter may be cited as the
14	12		Uniform Partition of Heirs' Property Act.
15	13		Sec. 23A.002. DEFINITIONS. In this chapter:
16	14		(1) "Ascendant" means an individual who precedes
17	15		another individual in lineage, in the direct line of ascent from the
18	16		other individual.
19	17		(2) "Collateral" means an individual who is related to
20	18		another individual under the law of intestate succession of this
21	19		state but who is not the other individual's ascendant or
22	20		descendant.
23	21		(3) "Descendant" means an individual who follows
24	22		another individual in lineage, in the direct line of descent from
25	23		the other individual.
26	24		(4) "Determination of value" means a court order
27	25		determining the fair market value of heirs' property under Section
28	26		23A.006 or 23A.010 or adopting the valuation of the property agreed
29	27		to by all cotenants.
30	28		(5) "Heirs' property" means real property held in
31	29		tenancy in common that satisfies all of the following requirements
32	30		as of the filing of a partition action:
33	31		(A) there is no agreement in a record binding all
34	32		the cotenants that governs the partition of the property;
35	33		(B) one or more of the cotenants acquired title
36	34		from a relative, whether living or deceased; and
37	35		(C) any of the following applies:
38	36		(i) 20 percent or more of the interests are
39	37		held by cotenants who are relatives;
40	38		(ii) 20 percent or more of the interests are
41	39		held by an individual who acquired title from a relative, whether
42	40		living or deceased; or
43	41		(iii) 20 percent or more of the cotenants
44	42		are relatives.
45	43		(6) "Partition by sale" means a court-ordered sale of
46	44		the entire heirs' property, whether by open-market sale, sealed
47	45		bids, or auction conducted under Section 23A.010.
48	46		(7) "Partition in kind" means the division of heirs'
49	47		property into physically distinct and separately titled parcels.
50	48		(8) "Record" means information that is inscribed on a
51	49		tangible medium or that is stored in an electronic or other medium
52	50		and is retrievable in perceivable form.
53	51		(9) "Relative" means an ascendant, descendant, or
54	52		collateral or an individual otherwise related to another individual
55	53		by blood, marriage, adoption, or law of this state other than this
56	54		chapter.
57	55		Sec. 23A.003. APPLICABILITY; RELATION TO OTHER LAW.
58	56		(a) In an action to partition real property under Chapter 23, the
59	57		court shall determine whether the property is heirs' property. If
60	58		the court determines that the property is heirs' property, the
61	59		property must be partitioned under this chapter unless all of the
62	60		cotenants otherwise agree in a record.
63	61		(b) This chapter supplements Chapter 23 and the Texas Rules
64	62		of Civil Procedure governing partition of real property. If an
65	63		action is governed by this chapter, this chapter supersedes
66	64		provisions of Chapter 23 and the Texas Rules of Civil Procedure
67	65		governing partition of real property that are inconsistent with
68	66		this chapter.
69	67		Sec. 23A.004. SERVICE; NOTICE BY POSTING. (a) This
70	68		chapter does not limit or affect the method by which service of a
71	69		petition in a partition action may be made.
72	70		(b) If the plaintiff in a partition action seeks citation by
73	71		publication and the court determines that the property may be
74	72		heirs' property, the plaintiff, not later than the 10th day after
75	73		the date the determination is made, shall post, and maintain while
76	74		the action is pending, a conspicuous sign on the property that is
77	75		the subject of the action. The sign must state that the action has
78	76		commenced and identify the name and address of the court and the
79	77		common designation by which the property is known. The court may
80	78		require the plaintiff to publish on the sign the name of the
81	79		plaintiff and the known defendants.
82	80		Sec. 23A.005. COMMISSIONERS. If the court appoints
83	81		commissioners under Rule 761, Texas Rules of Civil Procedure, each
84	82		commissioner, in addition to the requirements and
85	83		disqualifications applicable to commissioners under that rule,
86	84		must be impartial and may not be a party to or a participant in the
87	85		action.
88	86		Sec. 23A.006. DETERMINATION OF VALUE. (a) Except as
89	87		provided by Subsection (b) or (c), if the court determines that the
90	88		property that is the subject of a partition action is heirs'
91	89		property, the court shall determine the fair market value of the
92	90		property by ordering an appraisal under Subsection (d).
93	91		(b) If all cotenants have agreed to the value of the
94	92		property or to another method of valuation, the court shall adopt
95	93		that value or the value produced by the agreed method of valuation.
96	94		(c) If the court determines that the evidentiary value of an
97	95		appraisal is outweighed by the cost of the appraisal, the court,
98	96		after an evidentiary hearing, shall determine the fair market value
99	97		of the property and send notice to the parties of the value.
100	98		(d) If the court orders an appraisal, the court shall
101	99		appoint a disinterested real estate appraiser to determine the fair
102	100		market value of the property assuming sole ownership of the fee
103	101		simple estate. On completion of the appraisal, the appraiser shall
104	102		file a sworn or verified appraisal with the court.
105	103		(e) If an appraisal is conducted under Subsection (d), not
106	104		later than the 10th day after the date the appraisal is filed, the
107	105		court shall send notice to each party with a known address, stating:
108	106		(1) the appraised fair market value of the property;
109	107		(2) that the appraisal is available at the clerk's
110	108		office; and
111	109		(3) that a party may file with the court an objection
112	110		to the appraisal not later than the 30th day after the date notice
113	111		is sent, stating the grounds for the objection.
114	112		(f) If an appraisal is filed with the court under Subsection
115	113		(d), the court shall conduct a hearing to determine the fair market
116	114		value of the property not earlier than the 30th day after the date a
117	115		copy of the notice of the appraisal is sent to each party under
118	116		Subsection (e), whether or not an objection to the appraisal is
119	117		filed under Subsection (e)(3). In addition to the court-ordered
120	118		appraisal, the court may consider any other evidence of value
121	119		offered by a party.
122	120		(g) After a hearing under Subsection (f), but before
123	121		considering the merits of the partition action, the court shall
124	122		determine the fair market value of the property and send notice to
125	123		the parties of the value.
126	124		Sec. 23A.007. COTENANT BUYOUT. (a) If any cotenant
127	125		requested partition by sale, after the determination of value under
128	126		Section 23A.006, the court shall send notice to the parties that any
129	127		cotenant except a cotenant that requested partition by sale may buy
130	128		all the interests of the cotenants that requested partition by
131	129		sale.
132	130		(b) Not later than the 45th day after the date notice is sent
133	131		under Subsection (a), any cotenant except a cotenant that requested
134	132		partition by sale may give notice to the court that the cotenant
135	133		elects to buy all the interests of the cotenants that requested
136	134		partition by sale.
137	135		(c) The purchase price for each of the interests of a
138	136		cotenant that requested partition by sale is the value of the entire
139	137		parcel determined under Section 23A.006 multiplied by the
140	138		cotenant's fractional ownership of the entire parcel.
141	139		(d) After the period provided by Subsection (b) expires:
142	140		(1) if only one cotenant elects to buy all the
143	141		interests of the cotenants that requested partition by sale, the
144	142		court shall notify all the parties of that fact;
145	143		(2) if more than one cotenant elects to buy all the
146	144		interests of the cotenants that requested partition by sale, the
147	145		court shall:
148	146		(A) allocate the right to buy those interests
149	147		among the electing cotenants based on each electing cotenant's
150	148		existing fractional ownership of the entire parcel divided by the
151	149		total existing fractional ownership of all cotenants electing to
152	150		buy; and
153	151		(B) send notice to all the parties of that fact
154	152		and of the price to be paid by each electing cotenant; or
155	153		(3) if no cotenant elects to buy all the interests of
156	154		the cotenants that requested partition by sale, the court shall:
157	155		(A) send notice to all the parties of that fact;
158	156		and
159	157		(B) resolve the partition action under Section
160	158		23A.008(a) or (b).
161	159		(e) If the court sends notice to the parties under
162	160		Subsection (d)(1) or (2), the court shall set a date, not earlier
163	161		than the 60th day after the date notice was sent, by which an
164	162		electing cotenant must pay the cotenant's apportioned price into
165	163		the court. After that date:
166	164		(1) if all electing cotenants timely pay their
167	165		apportioned price into court, the court shall:
168	166		(A) issue an order reallocating all the interests
169	167		of the cotenants; and
170	168		(B) disburse the amounts held by the court to the
171	169		persons entitled to them;
172	170		(2) if no electing cotenant timely pays its
173	171		apportioned price, the court shall resolve the partition action
174	172		under Section 23A.008(a) or (b) as if the interests of the cotenants
175	173		that requested partition by sale were not purchased; or
176	174		(3) if one or more but not all of the electing
177	175		cotenants fail to pay their apportioned price on time, the court
178	176		shall give notice to the electing cotenants that paid their
179	177		apportioned price of the interest remaining and the price for all
180	178		that interest.
181	179		(f) Not later than the 20th day after the date the court
182	180		gives notice under Subsection (e)(3), any cotenant that paid may
183	181		elect to purchase all of the remaining interest by paying the entire
184	182		price into the court. After that period expires:
185	183		(1) if only one cotenant pays the entire price for the
186	184		remaining interest, the court shall:
187	185		(A) issue an order reallocating the remaining
188	186		interest to that cotenant;
189	187		(B) promptly issue an order reallocating the
190	188		interests of all of the cotenants; and
191	189		(C) disburse the amounts held by the court to the
192	190		persons entitled to the amounts;
193	191		(2) if no cotenant pays the entire price for the
194	192		remaining interest, the court shall resolve the partition action
195	193		under Section 23A.008(a) or (b) as if the interests of the cotenants
196	194		that requested partition by sale were not purchased; or
197	195		(3) if more than one cotenant pays the entire price for
198	196		the remaining interest, the court shall:
199	197		(A) reapportion the remaining interest among
200	198		those paying cotenants, based on each paying cotenant's original
201	199		fractional ownership of the entire parcel divided by the total
202	200		original fractional ownership of all cotenants that paid the entire
203	201		price for the remaining interest;
204	202		(B) promptly issue an order reallocating all of
205	203		the cotenants' interests;
206	204		(C) disburse the amounts held by the court to the
207	205		persons entitled to the amounts; and
208	206		(D) promptly refund any excess payment held by
209	207		the court.
210	208		(g) Not later than the 45th day after the date the court
211	209		sends notice to the parties under Subsection (a), any cotenant
212	210		entitled to buy an interest under this section may request the court
213	211		to authorize the sale as part of the pending action of the interests
214	212		of cotenants named as defendants and served with the complaint but
215	213		that did not appear in the action.
216	214		(h) If the court receives a timely request under Subsection
217	215		(g), the court, after hearing, may deny the request or authorize the
218	216		requested additional sale on such terms as the court determines are
219	217		fair and reasonable, subject to the following limitations:
220	218		(1) a sale authorized under this subsection may occur
221	219		only after the purchase prices for all interests subject to sale
222	220		under Subsections (a) through (f) have been paid into court and
223	221		those interests have been reallocated among the cotenants as
224	222		provided in those subsections; and
225	223		(2) the purchase price for the interest of a
226	224		nonappearing cotenant is based on the court's determination of
227	225		value under Section 23A.006.
228	226		Sec. 23A.008. PARTITION ALTERNATIVES. (a) If all the
229	227		interests of all cotenants that requested partition by sale are not
230	228		purchased by other cotenants under Section 23A.007, or if after
231	229		conclusion of the buyout under Section 23A.007 a cotenant remains
232	230		that has requested partition in kind, the court shall order
233	231		partition in kind unless the court, after consideration of the
234	232		factors listed in Section 23A.009, finds that partition in kind
235	233		will result in substantial prejudice to the cotenants as a group.
236	234		In considering whether to order partition in kind, the court shall
237	235		approve a request by two or more parties to have the requesting
238	236		parties' individual interests aggregated.
239	237		(b) If the court does not order partition in kind under
240	238		Subsection (a), the court shall order partition by sale under
241	239		Section 23A.010 or, if no cotenant requested partition by sale, the
242	240		court shall dismiss the action.
243	241		(c) If the court orders partition in kind under Subsection
244	242		(a), the court may require that one or more cotenants pay one or
245	243		more other cotenants amounts so that the payments, taken together
246	244		with the value of the in-kind distributions to the cotenants, will
247	245		make the partition in kind just and proportionate in value to the
248	246		fractional interests held.
249	247		(d) If the court orders partition in kind, the court shall
250	248		allocate to the cotenants that are unknown, unlocatable, or the
251	249		subject of a default judgment, if those cotenants' interests were
252	250		not bought out under Section 23A.007, a part of the property
253	251		representing the combined interests of those cotenants as
254	252		determined by the court, and that part of the property shall remain
255	253		undivided.
256	254		Sec. 23A.009. CONSIDERATIONS FOR PARTITION IN KIND.
257	255		(a) In determining under Section 23A.008(a) whether partition in
258	256		kind would result in substantial prejudice to the cotenants as a
259	257		group, the court shall consider the following:
260	258		(1) whether the heirs' property practicably can be
261	259		divided among the cotenants;
262	260		(2) whether partition in kind would apportion the
263	261		property in such a way that the aggregate fair market value of the
264	262		parcels resulting from the division would be materially less than
265	263		the value of the property if the property were sold as a whole,
266	264		taking into account the condition under which a court-ordered sale
267	265		likely would occur;
268	266		(3) evidence of the collective duration of ownership
269	267		or possession of the property by a cotenant and one or more
270	268		predecessors in title or predecessors in possession to the cotenant
271	269		who are or were relatives of the cotenant or each other;
272	270		(4) a cotenant's sentimental attachment to the
273	271		property, including any attachment arising because the property has
274	272		ancestral or other unique or special value to the cotenant;
275	273		(5) the lawful use being made of the property by a
276	274		cotenant and the degree to which the cotenant would be harmed if the
277	275		cotenant could not continue the same use of the property;
278	276		(6) the degree to which the cotenants have contributed
279	277		the cotenants' pro rata share of the property taxes, insurance, and
280	278		other expenses associated with maintaining ownership of the
281	279		property or have contributed to the physical improvement,
282	280		maintenance, or upkeep of the property; and
283	281		(7) any other relevant factor.
284	282		(b) The court may not consider any one factor under
285	283		Subsection (a) to be dispositive without weighing the totality of
286	284		all relevant factors and circumstances.
287	285		Sec. 23A.010. OPEN-MARKET SALE, SEALED BIDS, OR AUCTION.
288	286		(a) If the court orders a sale of heirs' property, the sale must be
289	287		an open-market sale unless the court finds that a sale by sealed
290	288		bids or at an auction would be more economically advantageous and in
291	289		the best interest of the cotenants as a group.
292	290		(b) If the court orders an open-market sale and the parties,
293	291		not later than the 10th day after the date the order is entered,
294	292		agree on a real estate broker to offer the property for sale, the
295	293		court shall appoint the broker and establish a reasonable
296	294		commission. If the parties do not agree on a broker, the court
297	295		shall appoint a disinterested real estate broker to offer the
298	296		property for sale and shall establish a reasonable commission. The
299	297		broker shall offer the property for sale in a commercially
300	298		reasonable manner at a price no lower than the determination of
301	299		value and on the terms and conditions established by the court.
302	300		(c) If the broker appointed under Subsection (b) obtains
303	301		within a reasonable time an offer to purchase the property for at
304	302		least the determination of value:
305	303		(1) the broker shall comply with the reporting
306	304		requirements of Section 23A.011; and
307	305		(2) the sale may be completed in accordance with state
308	306		law other than this chapter.
309	307		(d) If the broker appointed under Subsection (b) does not
310	308		obtain within a reasonable time an offer to purchase the property
311	309		for at least the determination of value, the court, after hearing,
312	310		may:
313	311		(1) approve the highest outstanding offer, if any;
314	312		(2) redetermine the value of the property and order
315	313		that the property continue to be offered for an additional time; or
316	314		(3) order that the property be sold by sealed bids or
317	315		at an auction.
318	316		(e) If the court orders a sale by sealed bids or at an
319	317		auction, the court shall set terms and conditions of the sale. If
320	318		the court orders an auction, the auction must be conducted in the
321	319		manner provided by law for a sale made under execution.
322	320		(f) If a purchaser is entitled to a share of the proceeds of
323	321		the sale, the purchaser is entitled to a credit against the price in
324	322		an amount equal to the purchaser's share of the proceeds.
325	323		Sec. 23A.011. REPORT OF OPEN-MARKET SALE. (a) Unless
326	324		required to do so earlier by other law governing the partition of
327	325		real property, a broker appointed under Section 23A.010(b) to offer
328	326		heirs' property for open-market sale shall file a report with the
329	327		court not later than the seventh day after the date an offer is
330	328		received to purchase the property for at least the value determined
331	329		under Section 23A.006 or 23A.010.
332	330		(b) The report required by Subsection (a) must contain the
333	331		following information:
334	332		(1) a description of the property to be sold to each
335	333		buyer;
336	334		(2) the name of each buyer;
337	335		(3) the proposed purchase price;
338	336		(4) the terms and conditions of the proposed sale,
339	337		including the terms of any owner financing;
340	338		(5) the amounts to be paid to lienholders;
341	339		(6) a statement of contractual or other arrangements
342	340		or conditions of the broker's commission; and
343	341		(7) other material facts relevant to the sale.
344	342		Sec. 23A.012. UNIFORMITY OF APPLICATION AND CONSTRUCTION.
345	343		In applying and construing this chapter, consideration must be
346	344		given to the need to promote uniformity of the law with respect to
347	345		the subject matter of this chapter among states that enact a law
348	346		based on the uniform act on which this chapter is based.
349	347		Sec. 23A.013. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL
350	348		AND NATIONAL COMMERCE ACT. This chapter modifies, limits, and
351	349		supersedes the Electronic Signatures in Global and National
352	350		Commerce Act (15 U.S.C. Section 7001 et seq.) but does not modify,
353	351		limit, or supersede Section 101(c) of that act (15 U.S.C. Section
354	352		7001(c)) or authorize electronic delivery of any of the notices
355	353		described in Section 103(b) of that act (15 U.S.C. Section
356	354		7003(b)).
357	355		SECTION 2. Chapter 23A, Property Code, as added by this Act,
358	356		applies only to a partition action commenced on or after the
359	357		effective date of this Act. A partition action commenced before the
360	358		effective date of this Act is governed by the law as it existed
361	359		immediately before the effective date of this Act, and that law is
362	360		continued in effect for that purpose.
363	361		SECTION 3. This Act takes effect September 1, 2017.
	362	+	______________________________ ______________________________
	363	+	President of the Senate Speaker of the House
	364	+	I hereby certify that S.B. No. 499 passed the Senate on
	365	+	April 10, 2017, by the following vote: Yeas 31, Nays 0.
	366	+	______________________________
	367	+	Secretary of the Senate
	368	+	I hereby certify that S.B. No. 499 passed the House on
	369	+	May 19, 2017, by the following vote: Yeas 144, Nays 0, two
	370	+	present not voting.
	371	+	______________________________
	372	+	Chief Clerk of the House
	373	+	Approved:
	374	+	______________________________
	375	+	Date
	376	+	______________________________
	377	+	Governor