Uniform Law Commission
111 N. Wabash Ave., Suite 1010, Chicago, IL 60602
Contact: Kieran Marion, ULC Legislative Counsel, firstname.lastname@example.org
Katie Robinson, ULC Communications Officer, email@example.com
For Immediate Release:
COUNCIL OF STATE GOVERNMENTS APPROVES NEW UNIFORM ACT
AS “SUGGESTED STATE LEGISLATION”
October 26, 2011 – The Uniform Partition of Heirs Property Act was approved by the Council of State Governments (CSG) as “Suggested State Legislation” at the recent annual meeting of the CSG in Bellevue, Washington. The Uniform Partition of Heirs Property Act, drafted and approved by the Uniform Law Commission (ULC) in 2010, is a new state law which helps to protect the interests and needs of vulnerable landowners. It was enacted this year in Nevada.
“Heirs’ property” generally refers to family-owned land, passed down without a will and held by descendants as “tenants in common.” Heirs’ property is typically owned by a family for many generations, with each owner having inherited an undivided interest in the land. Anyone who inherits or purchases even a small interest in the land can file with a court to force other owners to sell. These “partition sales” often occur against the wishes of many of the family members that own the property. The end result is often a sale that does not meet fair market value, and may result in the dispossession of family members from their inherited land.
Property owners with access to trust and estate attorneys, business planners, and other professional assistance, can avoid or mitigate the harsh consequences of a forced partition sale by structuring agreements with their fellow cotenants to contract around the default rules of the tenancy in common. Low- to moderate-income heirs’ property owners, on the other hand, do not have access in most cases to similar professional assistance and are particularly vulnerable to predatory speculation. Most such owners are not even aware that their property is in jeopardy until a partition action is already underway.
The Uniform Partition of Heirs’ Property Act establishes a number of important protections for owners of heirs’ property, while retaining flexibility for those wishing to sell their interest in the land.
Under the Act, the court appoints a disinterested real estate appraiser to assess the fair market value of the property, unless all the cotenants agree to a different valuation method, agree on the value of the property, or the court determines that the cost of the appraisal will outweigh its evidentiary value. The Act provides the procedural timeline for determining the fair market value. After the court determines the value of the property, the Act provides all of the cotenants who did not request partition by sale with a right to buy out all of the interests of those who have done so, at a price equal to the court-determined value of the property multiplied by the fractional interest of the cotenant that is bought out. If the buy-out does not resolve the matter, the Act provides courts with a clear set of protocols and considerations for determining whether and how to proceed with partition in kind or by sale for this important subset of property.
The Uniform Partition of Heirs Property Act provides an important addition to states’ laws governing partition for heirs’ property, and provides heirs’ property owners with significant protections against unexpected and often devastating predatory speculation. The Act will assist heirs’ property owners, particularly (but not exclusively) low- to moderate-income heirs owners, with preserving the integrity and value of property that has both economic and strong familial significance.
Further information on the Uniform Partition of Heirs’ Property Act can be found at the ULC’s website at www.uniformlaws.org.
About “Suggested State Legislation”
Suggested state legislation is a compilation of draft legislation from state statutes on topics of current interest and importance to the states. For more than 60 years, The Council of State Governments’ Suggested State Legislation (SSL) program has informed state policy-makers on a broad range of legislative issues, and its national Committee on Suggested State Legislation has been a model on interstate dialogue.
SSL Committee members represent all regions of the country. They are generally legislators, legislative staff and other state governmental officials who contribute their time and efforts to assisting the states in the identification of timely and innovative state legislation.
About the Uniform Law Commission
The Uniform Law Commission is comprised of more than 350 practicing lawyers, governmental lawyers, judges, law professors and lawyer-legislators, who are appointed by each state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands to research, draft and promote enactment of uniform state laws in areas of state laws where uniformity is desirable and practical. Now in its 119th year, the ULC has provided states with over 250 uniform acts that help bring clarity and stability to critical areas of state statutory law.
About the Council of State Governments
The Council of State Governments is the country’s only organization serving all three branches of state government. CSG is a region-based forum that fosters the exchange of insights and ideas to help state officials shape public policy. This offers unparalleled regional, national and international opportunities to network, develop leaders, collaborate and create problem-solving partnerships.