Texas 2025 - 89th Regular

Texas House Bill HB4011 Compare Versions

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1	1		By: Darby H.B. No. 4011
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4	6		A BILL TO BE ENTITLED
5	7		AN ACT
6	8		relating to the partition or voluntary sale of real property owned
7	9		by certain cotenants; amending the Uniform Partition of Heirs'
8	10		Property Act.
9	11		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	12		SECTION 1. relating to the partition or voluntary sale of real
11	13		property owned by certain cotenants; amending the Uniform Partition
12	14		of Heirs' Property Act.
13	15		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	16		SECTION 1. Chapter 23, Property Code, is amended by adding
15	17		Sections 23.0014, 23,0015, 23.0016, 23.0017, 23.0018, 23.0019 and
16	18		23.0025 to read as follows:
17	19		Sec. 23.0014. DEFINITIONS. In this chapter, "heir
18	20		cotenant," "heirs' property," "non-heir cotenant" and "relative"
19	21		have the meanings assigned by Section 23A.002.
20	22		Sec. 23.0015. REQUIREMENTS OF PETITION. (a) A petition to
21	23		partition property must:
22	24		(1) meet the requirements in the Texas Rules of Civil
23	25		Procedure;
24	26		(2) include a statement certifying whether the
25	27		property is heirs' property;
26	28		(3) include the date that the plaintiff acquired their
27	29		interest in the property; and
28	30		(4) include the plaintiff's percentage interest in the
29	31		property.
30	32		(b) If a non-heir cotenant brings a partition action for
31	33		heirs' property after December 31, 2025, and the non-heir cotenant
32	34		acquired their interest in said property after December 31, 2025,
33	35		the petition must also include:
34	36		(1) a statement certifying whether the right of first
35	37		refusal and notice of sale requirements in Section 5.254 have been
36	38		met;
37	39		(2) the steps taken to exercise the due diligence
38	40		required under Section 5.254; and
39	41		(3) the full name of the persons who received the
40	42		notice required under Section 5.254.
41	43		Sec. 23.0016. CITATION; NOTICE OF HEIR'S BILL OF RIGHTS;
42	44		FORM. (a) Citation of an action to partition real property must be
43	45		served by personal service or certified mail with return receipt
44	46		requested on each of the following persons:
45	47		(1) each joint owner of the property who is 16 years of
46	48		age or older;
47	49		(2) the parent, managing conservator, or guardian of
48	50		each joint owner who is younger than 16 years of age;
49	51		(3) each person who has paid any part of the property
50	52		taxes on the property in any of the five years prior to the filing of
51	53		the suit; and
52	54		(4) each person residing on the property.
53	55		(b) The plaintiff or plaintiff's attorney or agent must
54	56		exercise due diligence to identify the name and residence of each
55	57		person listed in Subsection (a) and notify the clerk of the court of
56	58		the identified names and residences;
57	59		(c) The citation is not required to be served on a person
58	60		listed in Subsection (a) if:
59	61		(1) the person entered a court appearance in the
60	62		action;
61	63		(2) the person is 16 years of age or older and waived
62	64		citation; or
63	65		(3) the person is younger than 16 years of age and the
64	66		party's parent, managing conservator, guardian, attorney ad litem,
65	67		or guardian ad litem waived citation.
66	68		(d) If the name or residence of a person listed in
67	69		Subsection (a) cannot be ascertained through the exercise of due
68	70		diligence, the service of the citation shall be made by publication
69	71		in accordance with the Texas Rules of Civil Procedures.
70	72		(e) The citation must include a notice of heir's property
71	73		rights utilizing the standardized form created by the Office of
72	74		Court Administration under Section 72.040, Government Code.
73	75		Sec. 23.0017. AFFIDAVIT. (a) A plaintiff who files an
74	76		action to partition real property shall file with the court, no
75	77		later than 20 days after the service of citation in the action is
76	78		completed:
77	79		(1) a copy of any citation required by this chapter and
78	80		the proof of delivery of service of the citation; and
79	81		(2) an affidavit sworn to by the plaintiff or a
80	82		certificate signed by the plaintiff's attorney stating:
81	83		(A) that the citation was served as required by
82	84		this chapter;
83	85		(B) the name and address of each person to whom
84	86		the citation was served, if the person's name and address are not
85	87		shown on the proof of delivery; and
86	88		(C) if service of citation is waived.
87	89		(b) If the name or location of a person required to be served
88	90		the citation under Section 23.0016 has not been ascertained:
89	91		(1) the affidavit must confirm that due diligence was
90	92		taken to ascertain the person's name and residence and contain a
91	93		statement of the actions taken to identify the name and residence of
92	94		the person; and
93	95		(2) the court shall inquire into the sufficiency of
94	96		the diligence taken to identify the person's name and residence and
95	97		require any corrective actions needed to comply with this section.
96	98		Sec. 23.0018. ATTORNEY AD LITEM. (a) The court shall
97	99		appoint an attorney ad litem in a partition action to represent the
98	100		interests of any joint owners whose name or location is unknown;
99	101		(b) The court shall appoint an attorney ad litem in a
100	102		partition action brought by a non-heir cotenant involving heirs'
101	103		property to determine if there are any heir cotenants of the
102	104		property who have not been identified and to locate any known heir
103	105		cotenants who have not been served with the citation. Pursuant to
104	106		this subsection:
105	107		(1) the attorney ad litem shall conduct a due
106	108		diligence investigation to locate known heir cotenants and identify
107	109		and locate potential unknown heir cotenants, including, but not
108	110		limited to, reviewing deed records, contacting known family
109	111		members, and utilizing other reasonable means;
110	112		(2) the court shall dismiss the attorney ad litem upon
111	113		a finding that the attorney ad litem completed a due diligence
112	114		search for the name and location of all heir cotenants; and
113	115		(3) The fees for the attorney ad litem appointed under
114	116		this subsection shall be paid for by the non-heir cotenant.
115	117		Sec. 23.0019. NOTICE OF ACTION BY POSTING; TIME FOR FIRST
116	118		HEARING. (a) Not later than 10 days after bringing an action to
117	119		partition property, the plaintiff shall post, and maintain while
118	120		the action is pending, a conspicuous sign on the property that is
119	121		the subject of the action.
120	122		(b) The sign must:
121	123		(1) be posted in a conspicuous place on the property
122	124		that is reasonably accessible and that the public is most likely to
123	125		observe and, if the property abuts a public thoroughfare, in a
124	126		location that is easily visible from the thoroughfare;
125	127		(2) be made of a weatherproof material that is not
126	128		likely to disintegrate or decompose;
127	129		(3) have dimensions of at least four feet by four feet;
128	130		(4) state in conspicuous language that the partition
129	131		action has commenced and identify the name and address of the court
130	132		and the common designation by which the property is known.
131	133		(b) The court may require the plaintiff to publish on the
132	134		sign the name of the plaintiff and the known defendants.
133	135		(c) The plaintiff must file with the court proof of posting
134	136		the sign in compliance with this section not later than the 10th day
135	137		after the date of posting.
136	138		(d) The court may not hold the first hearing in the action
137	139		earlier than the 60th day after the date on which the plaintiff
138	140		provides proof the sign is posted as required by this section.
139	141		Sec. 23.0025. DETERMINATION OF HEIRS' PROPERTY;
140	142		APPLICABILITY; RELATION TO OTHER LAW. In an action to partition
141	143		real property, after service of the citation is completed in
142	144		compliance with this chapter, the court shall hold a preliminary
143	145		hearing to determine whether the property is heirs' property under
144	146		Chapter 23A. If the court determines that the property is heirs'
145	147		property, the provisions of Chapter 23A apply unless all the
146	148		cotenants otherwise agree in a written record.
147	149		SECTION 2. Section 23A.002, Property Code, is amended by
148	150		adding Subdivisions (4-a) and (5-a) and amending Subdivision (5) to
149	151		read as follows:
150	152		(4-a) "Heir cotenant" means an individual who:
151	153		(A) acquired a tenancy in common interest in real
152	154		property from a relative by will, intestacy, or transfer on death
153	155		deed; or
154	156		(B) acquired a tenancy in common interest in real
155	157		property from a relative who previously acquired the interest from
156	158		a relative by will, intestacy, or transfer on death deed.
157	159		(5) "Heirs' property" means real property held in
158	160		tenancy in common that satisfies all of the following requirements
159	161		as of the filing of a partition action:
160	162		(A) there is no agreement in a record binding all
161	163		the cotenants that governs the partition of the property;
162	164		(B) one or more of the cotenants acquired title
163	165		from a relative, whether living or deceased; and
164	166		(C) any of the following applies:
165	167		(i) 20 percent or more of the interests are
166	168		held by cotenants who are relatives;
167	169		(ii) 20 percent or more of the interests are
168	170		held by an individual who acquired title from a relative, whether
169	171		living or deceased; [or]
170	172		(iii) 20 percent or more of the cotenants
171	173		are relatives; or
172	174		(iv) any heir cotenant resides on the
173	175		property.
174	176		(5-a) "Non-heir cotenant" means an owner of heirs'
175	177		property who is not an heir cotenant.
176	178		SECTION 3. The heading of Section 23A.003, Property Code,
177	179		is amended to read as follows:
178	180		Sec. 23A.003. [APPLICABILITY;] RELATION TO OTHER LAW.
179	181		SECTION 4. Section 23A.003(a), Property Code, is repealed.
180	182		SECTION 5. Section 23A.004, Property Code, is repealed.
181	183		SECTION 6. Chapter 23A, Property Code, is amended by adding
182	184		Section 23A.0041 to read as follows:
183	185		Sec. 23A.0041. SETTLEMENT CONFERENCE. (a) If the court in
184	186		a partition action determines that the property is heirs' property,
185	187		a party may file a written request that the court hold a conference
186	188		for the parties to engage in settlement discussions with respect to
187	189		the parties' interests in the property.
188	190		(b) On the filing of a request for a settlement conference
189	191		under this section the court shall:
190	192		(1) order the parties to participate in a settlement
191	193		conference under this section; and
192	194		(2) send notice to the parties of the time and place at
193	195		which the settlement conference will be held, the purpose of the
194	196		settlement conference, and the requirements of this section.
195	197		(c) The Office of Court Administration of the Texas Judicial
196	198		System shall prescribe a form to be used to provide the notice
197	199		required by Subsection (b). Notice provided under Subsection (b)
198	200		must be in the form prescribed.
199	201		(d) The plaintiff, not later than the 20th day after the
200	202		date the court sends notice under Subsection (b)(2), shall post a
201	203		copy of that notice on the sign required under Section 23A.0041.
202	204		(e) The court:
203	205		(1) shall hold a settlement conference under this
204	206		section:
205	207		(A) not later than the 60th day after the date the
206	208		request for the settlement conference is filed; or
207	209		(B) on a date agreed to by all parties; and
208	210		(2) may adjourn or reconvene the settlement conference
209	211		as necessary during the pendency of the partition action.
210	212		(f) Each party to the action shall appear at the settlement
211	213		conference in person, by videoconference if allowed by the court,
212	214		or by counsel. Each party's representative at the settlement
213	215		conference must be authorized to dispose of any portion of the case.
214	216		If a defendant appears pro se, the court shall advise the defendant
215	217		of the nature of the action and the defendant's rights and
216	218		responsibilities as a defendant.
217	219		(g) If at the time the court first holds a settlement
218	220		conference under this section a defendant has not filed an answer to
219	221		or motion to dismiss the partition action, the court shall:
220	222		(1) advise the defendant of the requirement to answer
221	223		the petition and that the ability to contest the partition action
222	224		and assert defenses may be lost if an answer is not filed;
223	225		(2) explain what is required to answer the petition in
224	226		court;
225	227		(3) provide information about available resources for
226	228		legal assistance; and
227	229		(4) set a deadline for any cotenant to request
228	230		partition by sale.
229	231		(h) The court shall presume that a defendant who appears at
230	232		a settlement conference but who did not timely file an answer in the
231	233		partition action has a reasonable excuse for the default and shall
232	234		allow the defendant to serve and file an answer not later than the
233	235		30th day after the date of the defendant's initial appearance at the
234	236		settlement conference, without deeming the defendant to have waived
235	237		any substantive defenses to the partition action. On service and
236	238		filing of the defendant's answer in accordance with this
237	239		subsection, the court shall vacate any default judgment that has
238	240		issued against the defendant in the action.
239	241		(i) Each party to the action shall negotiate in good faith
240	242		to reach a mutually agreeable resolution regarding the property,
241	243		which may include:
242	244		(1) a tenancy in common agreement;
243	245		(2) a cotenant buyout and the allocation, mechanics,
244	246		and financing for a cotenant buyout under Section 23A.007;
245	247		(3) partition in kind as provided under Sections
246	248		23A.008 and 23A.009;
247	249		(4) an open-market sale as provided under Section
248	250		23A.010; or
249	251		(5) any other agreement or loss mitigation that is
250	252		fair and reasonable in consideration of the factors listed in
251	253		Section 23A.009(a).
252	254		(j) If the parties do not reach a mutually agreeable
253	255		resolution, the court may refer the case to an alternative dispute
254	256		resolution procedure under Chapter 154, Civil Practice and Remedies
255	257		Code.
256	258		(k) The court may hold in abeyance any motion by any party to
257	259		a partition action while a settlement conference process under this
258	260		section is ongoing, except for a motion concerning:
259	261		(1) a determination of the percentage interest, if
260	262		any, owned by an alleged cotenant, if the interest is in dispute; or
261	263		(2) compliance with this section, including an
262	264		application to extend any deadline under this section in the
263	265		interest of justice.
264	266		SECTION 7. Section 23A.006, Property Code, is amended by
265	267		amending Subsections (a) and (b) and adding Subsection (d-1) to
266	268		read as follows:
267	269		(a) Except as provided by Subsection (b) [ or (c)], if the
268	270		court determines that the property that is the subject of a
269	271		partition action is heirs' property, the court shall determine the
270	272		fair market value of the property by ordering an appraisal under
271	273		Subsection (d).
272	274		(b) If all cotenants have agreed in writing to the value of
273	275		the property or to another method of valuation, the court shall
274	276		adopt that value or the value produced by the agreed method of
275	277		valuation.
276	278		(d-1) An appraiser appointed under Subsection (d) must be
277	279		certified as a certified general appraiser under Chapter 1103,
278	280		Occupations Code, unless the parties agree otherwise in writing or
279	281		the court requires an appraiser with higher or additional
280	282		certifications, licensing, or qualifications. Notwithstanding the
281	283		foregoing, if the court determines that a certified general
282	284		appraiser is unavailable to appraise the property within a
283	285		ninety-day time period, the court may appoint an appraiser licensed
284	286		as a certified residential appraiser to perform the appraisal
285	287		provided that the appraiser's license is adequate for the type of
286	288		property being appraised.
287	289		SECTION 8. Section 23A.007, Property Code, is amended by
288	290		amending Subsection (e) to read as follows:
289	291		(e) If the court sends notice to the parties under
290	292		Subsection (d)(1) or (2), the court shall set a date, not earlier
291	293		than the [60th] 90th day after the date notice was sent, by which an
292	294		electing cotenant must pay the cotenant's apportioned price into
293	295		the court. After that date:
294	296		(1) if all electing cotenants timely pay their
295	297		apportioned price into court, the court shall:
296	298		(A) issue an order reallocating all the interests
297	299		of the cotenants; and
298	300		(B) disburse the amounts held by the court to the
299	301		persons entitled to them;
300	302		(2) if no electing cotenant timely pays its
301	303		apportioned price, the court shall resolve the partition action
302	304		under Section 23A.008(a) or (b) as if the interests of the cotenants
303	305		that requested partition by sale were not purchased; or
304	306		(3) if one or more but not all of the electing
305	307		cotenants fail to pay their apportioned price on time, the court
306	308		shall give notice to the electing cotenants that paid their
307	309		apportioned price of the interest remaining and the price for all
308	310		that interest.
309	311		SECTION 9. Sections 23A.010(d) and (e), Property Code, are
310	312		amended to read as follows:
311	313		(d) If the broker appointed under Subsection (b) does not
312	314		obtain within a reasonable time an offer to purchase the property
313	315		for at least the determination of value, the court, after hearing,
314	316		may:
315	317		(1) approve the highest outstanding offer, if any;
316	318		(2) redetermine the value of the property and order
317	319		that the property continue to be offered for an additional time; or
318	320		(3) appoint a substitute broker under Subsection (b)
319	321		and order that the property continue to be offered for sale [be sold
320	322		by sealed bids or at an auction].
321	323		(e) If a substitute broker appointed under Subsection
322	324		(d)(3) does not obtain within a reasonable time a reasonable offer
323	325		to purchase the property, the court may order the [orders a] sale of
324	326		the property by sealed bids or at an auction. The [, the] court
325	327		shall set terms and conditions of the sale. If the court orders an
326	328		auction, the auction must be conducted in the manner provided by law
327	329		for a sale made under execution.
328	330		SECTION 10. Chapter 23A, Property Code, is amended by
329	331		adding Section 23A.0115 to read as follows
330	332		Sec. 23A.0115. PROHIBITION ON INITIATION OF PARTITION. (a)
331	333		No partition action related to an heirs' property may be initiated
332	334		by a non-heir cotenant holding less than 50 percent of the interest
333	335		in said property for a period of ten years from the date the
334	336		non-heir cotenant first acquired a co-ownership interest in said
335	337		property.
336	338		(b) This section does not apply to an interest in heirs'
337	339		property acquired by a non-heir cotenant prior to January 1, 2026.
338	340		SECTION 11. Chapter 5, Property Code, is amended by adding
339	341		Subchapter H to read as follows:
340	342		SUBCHAPTER H. NON-PARTITION SALE OF HEIR COTENANT'S INTEREST IN
341	343		HEIRS' PROPERTY
342	344		Sec. 5.251. DEFINITIONS. In this subchapter: "heir
343	345		cotenant," heirs' property," "non-heir cotenant," and "relative"
344	346		have the meanings assigned by Section 23A.002.
345	347		Sec. 5.252. APPLICABILITY OF SUBCHAPTER. This subchapter
346	348		applies to the sale of an heir cotenant's interest in heirs'
347	349		property if:
348	350		(1) an heir cotenant is in possession of the property; and
349	351		(2) the sale does not result from an action to partition the
350	352		property under Chapter 23 or 23A.
351	353		Sec. 5.253. RIGHT OF FIRST REFUSAL AND NOTICE OF SALE. (a)
352	354		If a cotenant decides to sell all or part of their interest in
353	355		heirs' property to a non-heir cotenant who is not a relative of an
354	356		heir cotenant, any heir cotenants who reside on the property have a
355	357		right of first refusal to purchase the interest in accordance with
356	358		this subchapter.
357	359		(b) Before selling an interest in heirs' property covered by
358	360		this subchapter, the selling cotenant must have a contract with the
359	361		third-party purchaser that sets forth the terms of the sale and is
360	362		subject to the right of first refusal in this subchapter.
361	363		(c) Any heir cotenants who reside on the property are
362	364		entitled to buy the interest for the same price in the contract for
363	365		a period of 90 days from the date the notice under Section 5.254 is
364	366		sent.
365	367		(d) If multiple heir cotenants who reside on the property
366	368		offer to purchase the interest, priority is given to heir cotenants
367	369		who:
368	370		(1) have occupied the property as their primary
369	371		residence for at least the past five years; and
370	372		(2) paid all or part of the ad valorem taxes imposed on
371	373		the property for at least three of the five most recent tax years.
372	374		(e) If a non-heir cotenant who acquired an interest in
373	375		heirs' property after December 31, 2025, brings a partition action
374	376		under Chapter 23 and the acquisition was not made in compliance with
375	377		the right of first refusal requirements in this section, the heir
376	378		cotenants who reside on the property have a right to buy the
377	379		non-heir cotenant's interest in the property for the lesser of (1)
378	380		the fair market value of the non-heir cotenant's interest in the
379	381		property and (2) the price paid by the non-heir cotenant to acquire
380	382		the interests in the property.
381	383		Sec. 5.254. NOTICE TO HEIR COTENANTS. (a) Within 30 days
382	384		of a cotenant entering into a contract for the sale of heirs'
383	385		property to a non-heir cotenant, the selling cotenant shall give
384	386		notice of the proposed sale to all persons in possession of the
385	387		property and all known heir cotenants of the property. The notice
386	388		shall include the identity of the proposed purchaser, the sales
387	389		price of the proposed transaction, and a copy of the contract.
388	390		(b) Notice shall be sent to the heir cotenants' last known
389	391		address by certified mail with return receipt requested.
390	392		(c) The selling cotenant has a duty to exercise due
391	393		diligence to identify the names and locations of all the heir
392	394		cotenants and provide the notice required under this subchapter.
393	395		SECTION 12. Subchapter C, Chapter 72, Government Code, is
394	396		amended by adding Section 72.040 to read as follows:
395	397		Sec. 72.040 HEIR'S BILL OF RIGHTS FORM. (a) The Office of
396	398		Court Administration of the Texas Judicial System shall promulgate
397	399		an heir's bill of rights form required to be included in a citation
398	400		for a partition action under Chapter 23, Property Code.
399	401		(b) The standardized form developed under Subsection (a)
400	402		must:
401	403		(1) be written in English that can be easily
402	404		understood by the general public and include a Spanish translation;
403	405		(2) provide information for accessing free or low-cost
404	406		legal assistance;
405	407		(3) inform cotenant heirs of their rights and duties
406	408		under Chapters 23 and 23A, Property Code, including their buyout
407	409		rights and right to request a settlement conference; and
408	410		(4) include such other information as the office
409	411		determines is appropriate to adequately inform heirs of their
410	412		rights and duties under Chapters 23 and 23A, Property Code.
411	413		SECTION 13. (a) Chapters 23 and 23A, Property Code, as
412	414		amended by this Act, apply only to a partition action commenced on
413	415		or after the effective date of this Act. A partition action
414	416		commenced before the effective date of this Act is governed by the
415	417		law as it existed immediately before the effective date of this Act,
416	418		and that law is continued in effect for that purpose.
417	419		(b) As soon as practicable after the effective date of this
418	420		Act, but not later than December 31, 2025, the Office of Court
419	421		Administration of the Texas Judicial System shall create and make
420	422		available on the office's Internet Website the forms required by
421	423		Section 72.040, Government Code, and Section 23A.0041, Property
422	424		Code, as added by this Act.
423	425		(c) Subchapter H, Chapter 5, Property Code, as added by this
424	426		Act, applies only to the sale of an interest in heirs' property the
425	427		closing date of which is on or after January 1, 2026. The sale of an
426	428		interest in heirs' property the closing date of which is before
427	429		January 1, 2026, is governed by the law as it existed immediately
428	430		before the effective date of this Act, and that law is continued in
429	431		effect for that purpose.
430	432		SECTION 14. This Act takes effect September 1, 2025.