S.B. No. 499
 
 
 
 
AN ACT
  relating to the adoption of the Uniform Partition of Heirs'
  Property Act.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 4, Property Code, is amended by adding
  Chapter 23A to read as follows:
  CHAPTER 23A. UNIFORM PARTITION OF HEIRS' PROPERTY ACT
         Sec. 23A.001.  SHORT TITLE. This chapter may be cited as the
  Uniform Partition of Heirs' Property Act.
         Sec. 23A.002.  DEFINITIONS. In this chapter:
               (1)  "Ascendant" means an individual who precedes
  another individual in lineage, in the direct line of ascent from the
  other individual.
               (2)  "Collateral" means an individual who is related to
  another individual under the law of intestate succession of this
  state but who is not the other individual's ascendant or
  descendant.
               (3)  "Descendant" means an individual who follows
  another individual in lineage, in the direct line of descent from
  the other individual.
               (4)  "Determination of value" means a court order
  determining the fair market value of heirs' property under Section
  23A.006 or 23A.010 or adopting the valuation of the property agreed
  to by all cotenants.
               (5)  "Heirs' property" means real property held in
  tenancy in common that 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 that 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.
               (6)  "Partition by sale" means a court-ordered sale of
  the entire heirs' property, whether by open-market sale, sealed
  bids, or auction conducted under Section 23A.010.
               (7)  "Partition in kind" means the division of heirs'
  property into physically distinct and separately titled parcels.
               (8)  "Record" means information that is inscribed on a
  tangible medium or that is stored in an electronic or other medium
  and is retrievable in perceivable form.
               (9)  "Relative" means an ascendant, descendant, or
  collateral or an individual otherwise related to another individual
  by blood, marriage, adoption, or law of this state other than this
  chapter.
         Sec. 23A.003.  APPLICABILITY; RELATION TO OTHER LAW.
  (a)  In an action to partition real property under Chapter 23, the
  court shall determine whether the property is heirs' property. If
  the court determines that the property is heirs' property, the
  property must be partitioned under this chapter unless all of the
  cotenants otherwise agree in a record.
         (b)  This chapter supplements Chapter 23 and the Texas Rules
  of Civil Procedure governing partition of real property.  If an
  action is governed by this chapter, this chapter supersedes
  provisions of Chapter 23 and the Texas Rules of Civil Procedure
  governing partition of real property that are inconsistent with
  this chapter.
         Sec. 23A.004.  SERVICE; NOTICE BY POSTING. (a)  This
  chapter does not limit or affect the method by which service of a
  petition in a partition action may be made.
         (b)  If the plaintiff in a partition action seeks citation by
  publication and the court determines that the property may be
  heirs' property, the plaintiff, not later than the 10th day after
  the date the determination is made, shall post, and maintain while
  the action is pending, a conspicuous sign on the property that is
  the subject of the action. The sign must state that the action has
  commenced and identify the name and address of the court and the
  common designation by which the property is known. The court may
  require the plaintiff to publish on the sign the name of the
  plaintiff and the known defendants.
         Sec. 23A.005.  COMMISSIONERS. If the court appoints
  commissioners under Rule 761, Texas Rules of Civil Procedure, each
  commissioner, in addition to the requirements and
  disqualifications applicable to commissioners under that rule,
  must be impartial and may not be a party to or a participant in the
  action.
         Sec. 23A.006.  DETERMINATION OF VALUE. (a)  Except as
  provided by Subsection (b) or (c), if the court determines that the
  property that is the subject of a partition action is heirs'
  property, the court shall determine the fair market value of the
  property by ordering an appraisal under Subsection (d).
         (b)  If all cotenants have agreed to the value of the
  property or to another method of valuation, the court shall adopt
  that value or the value produced by the agreed method of valuation.
         (c)  If the court determines that the evidentiary value of an
  appraisal is outweighed by the cost of the appraisal, the court,
  after an evidentiary hearing, shall determine the fair market value
  of the property and send notice to the parties of the value.
         (d)  If the court orders an appraisal, the court shall
  appoint a disinterested real estate appraiser to determine the fair
  market value of the property assuming sole ownership of the fee
  simple estate. On completion of the appraisal, the appraiser shall
  file a sworn or verified appraisal with the court.
         (e)  If an appraisal is conducted under Subsection (d), not
  later than the 10th day after the date the appraisal is filed, the
  court shall send notice to each party with a known address, stating:
               (1)  the appraised fair market value of the property;
               (2)  that the appraisal is available at the clerk's
  office; and
               (3)  that a party may file with the court an objection
  to the appraisal not later than the 30th day after the date notice
  is sent, stating the grounds for the objection.
         (f)  If an appraisal is filed with the court under Subsection
  (d), the court shall conduct a hearing to determine the fair market
  value of the property not earlier than the 30th day after the date a
  copy of the notice of the appraisal is sent to each party under
  Subsection (e), whether or not an objection to the appraisal is
  filed under Subsection (e)(3). In addition to the court-ordered
  appraisal, the court may consider any other evidence of value
  offered by a party.
         (g)  After a hearing under Subsection (f), but before
  considering the merits of the partition action, the court shall
  determine the fair market value of the property and send notice to
  the parties of the value.
         Sec. 23A.007.  COTENANT BUYOUT. (a)  If any cotenant
  requested partition by sale, after the determination of value under
  Section 23A.006, the court shall send notice to the parties that any
  cotenant except a cotenant that requested partition by sale may buy
  all the interests of the cotenants that requested partition by
  sale.
         (b)  Not later than the 45th day after the date notice is sent
  under Subsection (a), any cotenant except a cotenant that requested
  partition by sale may give notice to the court that the cotenant
  elects to buy all the interests of the cotenants that requested
  partition by sale.
         (c)  The purchase price for each of the interests of a
  cotenant that requested partition by sale is the value of the entire
  parcel determined under Section 23A.006 multiplied by the
  cotenant's fractional ownership of the entire parcel.
         (d)  After the period provided by Subsection (b) expires:
               (1)  if only one cotenant elects to buy all the
  interests of the cotenants that requested partition by sale, the
  court shall notify all the parties of that fact;
               (2)  if more than one cotenant elects to buy all the
  interests of the cotenants that requested partition by sale, the
  court shall:
                     (A)  allocate the right to buy those interests
  among the electing cotenants based on each electing cotenant's
  existing fractional ownership of the entire parcel divided by the
  total existing fractional ownership of all cotenants electing to
  buy; and
                     (B)  send notice to all the parties of that fact
  and of the price to be paid by each electing cotenant; or
               (3)  if no cotenant elects to buy all the interests of
  the cotenants that requested partition by sale, the court shall:
                     (A)  send notice to all the parties of that fact;
  and
                     (B)  resolve the partition action under Section
  23A.008(a) or (b).
         (e)  If the court sends notice to the parties under
  Subsection (d)(1) or (2), the court shall set a date, not earlier
  than the 60th day after the date notice was sent, by which an
  electing cotenant must pay the cotenant's apportioned price into
  the court. After that date:
               (1)  if all electing cotenants timely pay their
  apportioned price into court, the court shall:
                     (A)  issue an order reallocating all the interests
  of the cotenants; and
                     (B)  disburse the amounts held by the court to the
  persons entitled to them;
               (2)  if no electing cotenant timely pays its
  apportioned price, the court shall resolve the partition action
  under Section 23A.008(a) or (b) as if the interests of the cotenants
  that requested partition by sale were not purchased; or
               (3)  if one or more but not all of the electing
  cotenants fail to pay their apportioned price on time, the court
  shall give notice to the electing cotenants that paid their
  apportioned price of the interest remaining and the price for all
  that interest.
         (f)  Not later than the 20th day after the date the court
  gives notice under Subsection (e)(3), any cotenant that paid may
  elect to purchase all of the remaining interest by paying the entire
  price into the court. After that period expires:
               (1)  if only one cotenant pays the entire price for the
  remaining interest, the court shall:
                     (A)  issue an order reallocating the remaining
  interest to that cotenant;
                     (B)  promptly issue an order reallocating the
  interests of all of the cotenants; and
                     (C)  disburse the amounts held by the court to the
  persons entitled to the amounts;
               (2)  if no cotenant pays the entire price for the
  remaining interest, the court shall resolve the partition action
  under Section 23A.008(a) or (b) as if the interests of the cotenants
  that requested partition by sale were not purchased; or
               (3)  if more than one cotenant pays the entire price for
  the remaining interest, the court shall:
                     (A)  reapportion the remaining interest among
  those paying cotenants, based on each paying cotenant's original
  fractional ownership of the entire parcel divided by the total
  original fractional ownership of all cotenants that paid the entire
  price for the remaining interest;
                     (B)  promptly issue an order reallocating all of
  the cotenants' interests;
                     (C)  disburse the amounts held by the court to the
  persons entitled to the amounts; and
                     (D)  promptly refund any excess payment held by
  the court.
         (g)  Not later than the 45th day after the date the court
  sends notice to the parties under Subsection (a), any cotenant
  entitled to buy an interest under this section may request the court
  to authorize the sale as part of the pending action of the interests
  of cotenants named as defendants and served with the complaint but
  that did not appear in the action.
         (h)  If the court receives a timely request under Subsection
  (g), the court, after hearing, may deny the request or authorize the
  requested additional sale on such terms as the court determines are
  fair and reasonable, subject to the following limitations:
               (1)  a sale authorized under this subsection may occur
  only after the purchase prices for all interests subject to sale
  under Subsections (a) through (f) have been paid into court and
  those interests have been reallocated among the cotenants as
  provided in those subsections; and
               (2)  the purchase price for the interest of a
  nonappearing cotenant is based on the court's determination of
  value under Section 23A.006.
         Sec. 23A.008.  PARTITION ALTERNATIVES. (a)  If all the
  interests of all cotenants that requested partition by sale are not
  purchased by other cotenants under Section 23A.007, or if after
  conclusion of the buyout under Section 23A.007 a cotenant remains
  that has requested partition in kind, the court shall order
  partition in kind unless the court, after consideration of the
  factors listed in Section 23A.009, finds that partition in kind
  will result in substantial prejudice to the cotenants as a group.
  In considering whether to order partition in kind, the court shall
  approve a request by two or more parties to have the requesting
  parties' individual interests aggregated.
         (b)  If the court does not order partition in kind under
  Subsection (a), the court shall order partition by sale under
  Section 23A.010 or, if no cotenant requested partition by sale, the
  court shall dismiss the action.
         (c)  If the court orders partition in kind under Subsection
  (a), the court may require that one or more cotenants pay one or
  more other cotenants amounts so that the payments, taken together
  with the value of the in-kind distributions to the cotenants, will
  make the partition in kind just and proportionate in value to the
  fractional interests held.
         (d)  If the court orders partition in kind, the court shall
  allocate to the cotenants that are unknown, unlocatable, or the
  subject of a default judgment, if those cotenants' interests were
  not bought out under Section 23A.007, a part of the property
  representing the combined interests of those cotenants as
  determined by the court, and that part of the property shall remain
  undivided.
         Sec. 23A.009.  CONSIDERATIONS FOR PARTITION IN KIND.
  (a)  In determining under Section 23A.008(a) whether partition in
  kind would result in substantial prejudice to the cotenants as a
  group, the court shall consider the following:
               (1)  whether the heirs' property practicably can be
  divided among the cotenants;
               (2)  whether partition in kind would apportion the
  property in such a way that the aggregate fair market value of the
  parcels resulting from the division would be materially less than
  the value of the property if the property were sold as a whole,
  taking into account the condition under which a court-ordered sale
  likely would occur;
               (3)  evidence of the collective duration of ownership
  or possession of the property by a cotenant and one or more
  predecessors in title or predecessors in possession to the cotenant
  who are or were relatives of the cotenant or each other;
               (4)  a cotenant's sentimental attachment to the
  property, including any attachment arising because the property has
  ancestral or other unique or special value to the cotenant;
               (5)  the lawful use being made of the property by a
  cotenant and the degree to which the cotenant would be harmed if the
  cotenant could not continue the same use of the property;
               (6)  the degree to which the cotenants have contributed
  the cotenants' pro rata share of the property taxes, insurance, and
  other expenses associated with maintaining ownership of the
  property or have contributed to the physical improvement,
  maintenance, or upkeep of the property; and
               (7)  any other relevant factor.
         (b)  The court may not consider any one factor under
  Subsection (a) to be dispositive without weighing the totality of
  all relevant factors and circumstances.
         Sec. 23A.010.  OPEN-MARKET SALE, SEALED BIDS, OR AUCTION.
  (a)  If the court orders a sale of heirs' property, the sale must be
  an open-market sale unless the court finds that a sale by sealed
  bids or at an auction would be more economically advantageous and in
  the best interest of the cotenants as a group.
         (b)  If the court orders an open-market sale and the parties,
  not later than the 10th day after the date the order is entered,
  agree on a real estate broker to offer the property for sale, the
  court shall appoint the broker and establish a reasonable
  commission. If the parties do not agree on a broker, the court
  shall appoint a disinterested real estate broker to offer the
  property for sale and shall establish a reasonable commission. The
  broker shall offer the property for sale in a commercially
  reasonable manner at a price no lower than the determination of
  value and on the terms and conditions established by the court.
         (c)  If the broker appointed under Subsection (b) obtains
  within a reasonable time an offer to purchase the property for at
  least the determination of value:
               (1)  the broker shall comply with the reporting
  requirements of Section 23A.011; and
               (2)  the sale may be completed in accordance with state
  law other than this chapter.
         (d)  If the broker appointed under Subsection (b) does not
  obtain within a reasonable time an offer to purchase the property
  for at least the determination of value, the court, after hearing,
  may:
               (1)  approve the highest outstanding offer, if any;
               (2)  redetermine the value of the property and order
  that the property continue to be offered for an additional time; or
               (3)  order that the property be sold by sealed bids or
  at an auction.
         (e)  If the court orders a sale by sealed bids or at an
  auction, the court shall set terms and conditions of the sale.  If
  the court orders an auction, the auction must be conducted in the
  manner provided by law for a sale made under execution.
         (f)  If a purchaser is entitled to a share of the proceeds of
  the sale, the purchaser is entitled to a credit against the price in
  an amount equal to the purchaser's share of the proceeds.
         Sec. 23A.011.  REPORT OF OPEN-MARKET SALE. (a)  Unless
  required to do so earlier by other law governing the partition of
  real property, a broker appointed under Section 23A.010(b) to offer
  heirs' property for open-market sale shall file a report with the
  court not later than the seventh day after the date an offer is
  received to purchase the property for at least the value determined
  under Section 23A.006 or 23A.010.
         (b)  The report required by Subsection (a) must contain the
  following information:
               (1)  a description of the property to be sold to each
  buyer;
               (2)  the name of each buyer;
               (3)  the proposed purchase price;
               (4)  the terms and conditions of the proposed sale,
  including the terms of any owner financing;
               (5)  the amounts to be paid to lienholders;
               (6)  a statement of contractual or other arrangements
  or conditions of the broker's commission; and
               (7)  other material facts relevant to the sale.
         Sec. 23A.012.  UNIFORMITY OF APPLICATION AND CONSTRUCTION.
  In applying and construing this chapter, consideration must be
  given to the need to promote uniformity of the law with respect to
  the subject matter of this chapter among states that enact a law
  based on the uniform act on which this chapter is based.
         Sec. 23A.013.  RELATION TO ELECTRONIC SIGNATURES IN GLOBAL
  AND NATIONAL COMMERCE ACT. This chapter modifies, limits, and
  supersedes the Electronic Signatures in Global and National
  Commerce Act (15 U.S.C. Section 7001 et seq.) but does not modify,
  limit, or supersede Section 101(c) of that act (15 U.S.C. Section
  7001(c)) or authorize electronic delivery of any of the notices
  described in Section 103(b) of that act (15 U.S.C. Section
  7003(b)).
         SECTION 2.  Chapter 23A, Property Code, as added by this Act,
  applies only to a partition action commenced on or after the
  effective date of this Act. A partition action commenced before the
  effective date of this Act is governed by the law as it existed
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         SECTION 3.  This Act takes effect September 1, 2017.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 499 passed the Senate on
  April 10, 2017, by the following vote:  Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 499 passed the House on
  May 19, 2017, by the following vote:  Yeas 144, Nays 0, two
  present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor