New York Enacts Version of Uniform Partition of Heirs Property Act

On December 6, 2019, Governor Andrew Cuomo signed into law New York’s version of the Uniform Partition of Heirs Property Act (UPHPA) (RPAPL §993).

What Is The Uniform Partition of Heirs Property Act?

The Uniform Partition of Heirs Property Act aims to preserve family real property.  If an owner of land dies intestate (without a will) real estate passes to the heirs at law as tenants-in-common.

When people own real property as tenants-in-common, any individual owner can force a partition and sale of the property.  Often, real estate investors will obtain a share of an heirs’ property for the purpose of filing a partition action and forcing the sale of the property in order to acquire the entire property for a price well below market value.

The UPHPA attempts to protect heirs of real property from unwittingly falling victim to these predatory practices.

The UPHPA Defines Certain Property As “Heirs Property”

“Heirs property” is defined under the UPHPA as follows:

(5)  “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:

(A)  there is no agreement in a record binding all the cotenants which governs the partition of the property;

(B)  one or more of the cotenants acquired title from a relative, whether living or deceased; and

(C)  Any of the following applies:

(i)  20 percent or more of the interests are held by cotenants who are relatives;

(ii)  20 percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased; or

(iii)  20 percent or more of the cotenants are relatives.

 

After real property is defined as “heirs property,” a procedure must be followed to value the property with an appraisal.  The appraisal sets the floor price for a sale, and also specifies the price for which a co-tenant can buy the interests of the co-tenants seeking a partition by sale.

Under The UPHPA Partition Sale Happens On The Open Market Instead Of Judicial Auction

The UPHPA also changes the sale procedures in a partition action.  Property is placed on the open market as opposed to being sold through a judicial auction.  This means that the value of the heirs property is maximized.

Partition By Kind Is Elevated Under The UPHPA

Although the stated preference under the law of many states, including New York, is for partition in kind, partition by sale is commonly granted.  “Partition in kind” means partition or division of heirs property into physically distinct and separately titled parcels.

The UPHPA bolsters the statutory preference for an in kind partition, by not allowing partition by sale unless a co-tenant has specifically requested one, which triggers the right of the other co-tenants to buy out the co-tenant seeking partition.

How Does New York’s Uniform Partition of Heirs Property Act Protect Heirs Of Inherited Property?

New York’s version of the UPHPA makes some modifications to the Uniform Act and can be found at RPAPL 993.

Right of Heirs to Acquire Interests of Petitioning Co-Tenants

The New York UPHPA magnifies the right of co-tenants to purchase the interests of co-tenants who partition for sale of heirs property.

First, the New York UPHPA makes it clear that a partition by sale includes a sale of the portion of the property on which an heir resides, not just a sale of the entire property.

Second, New York’s UPHPA clarifies the requirement that co-tenants must declare that they intend to seek a partition by sale by a deadline set by the court.  Also, by requesting partition by sale, the co-tenant has consented to the purchase of their interests.

Third, the New York UPHPA gives preference to co-tent heirs that reside on the heirs property, by providing that in the event the right to purchase is fully subscribed by the co-tenants.

New York UPHPA Mediation Settlement Conference

New York also added a mediation settlement conference requirement to the Uniform Partition of Heirs Property Act.  Requiring a mediation settlement conference promotes negotiations and discussions between family members to resolve family disputes over heirs property without having to resort to partition by sale.