In the realm of real estate law, few matters are as complex and emotionally charged as actions involving family members. Several states, including New York, passed legislation to protect family members who want to divide, or sell, property co-owned with family members. New York’s statute is called the Uniform Partition of Heirs Property Act (“UPHPA”).
Purpose of the UPHPA
The UPHPA was designed to safeguard the property rights of people who inherited property from family. If someone who owns land passes away without a will, the property is inherited by their family members as co-owners called "tenants-in-common." If any co-owner decides that it’s not in their best interest to own the property with family, they can start what is called a “Partition Action” and demand that the land be divided by each owners’ interest, or if it cannot be divided, that the property is sold and the proceeds from the sale split according to each owner’s interest.
The Necessity of the UPHPA
Prior to passage of the UPHPA, many nefarious investors would track down co-owners, buy one owner’s interest, and then start a Partition Action against the remaining owners to force a sale of the property at an auction. These investors ruined generational wealth by transferring the property out of the family, often single property was the family’s most valuable asset, at below market prices.
Partition Actions Involving Family Members: A Delicate Balancing Act
The UPHPA does not prevent a Partition Action. Instead the Act added steps to ensure that co-owners have an opportunity negotiate with their family members and either buy each other out, or get the best possible sale price for the property.
The UPHPA pertains to:
“Heirs property” which is property held in tenancy in common and satisfies all of the following requirements:
(i) there is no agreement governing the partition of the property; and
(ii) any of the co-tenants acquired title from a relative, whether living or deceased; and
(iii) any of the following applies:
(A) twenty percent or more of the interests are held by co-tenants who are relatives; or
(B) twenty percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased; or
(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.
Timeline:
Partition Actions not regulated by the UPHPA could generally be resolved within one year. Under the UPHPA, however, the parties in a Partition Action are required to participate in a settlement conference after the action has been commenced. This conference can be postponed at the request of any party to the lawsuit. Additionally, if the parties cannot agree on the value of the property, the court must order an appraisal by a disinterested appraiser, licensed in New York, to determine the fair market value of the property. Parties then have the right to challenge the appraisal. Further, the property must be marketed and sold by a broker, and not at an auction.
All of these steps take time and means that most Partition Actions under the UPHPA take well over a year to resolve.
Expert Legal Counsel is Key
Securing competent legal counsel is essential for families entangled in Partition Actions governed by the UPHPA. Proctor Real Estate Law can provide assistance negotiating with family members and make good faith efforts to reasonably, and quickly, resolve your dispute. If settlement cannot be achieved, Proctor Real Estate Law can litigate a Partition Action on your behalf in a cost effective manner.
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