Bill Text: NJ S860 | 2022-2023 | Regular Session | Amended
Bill Title: "Uniform Partition of Heirs Property Act"; provides alternative process for handling partition actions filed in court concerning real property with multiple owners, at least one of whom had acquired title from relative.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2023-12-11 - Senate Amendment (Voice) (Ruiz) [S860 Detail]
Download: New_Jersey-2022-S860-Amended.html
[Second Reprint]
SENATE, No. 860
STATE OF NEW JERSEY
220th LEGISLATURE
INTRODUCED JANUARY 18, 2022
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
Senator ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
"Uniform Partition of Heirs Property Act"; provides alternative process for handling partition actions filed in court concerning real property with multiple owners, at least one of whom had acquired title from relative.
CURRENT VERSION OF TEXT
As amended by the Senate on December 11, 2023.
An Act concerning partition actions involving certain real property and supplementing chapter 56 of Title 2A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Uniform Partition of Heirs Property Act."
2. As used in this act:
"Ascendant" means an individual who precedes another individual in lineage, in the direct line of ascent from the other individual.
"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.
"Descendant" means an individual who follows another individual in lineage, in the direct line of descent from the other individual.
"Determination of value" means a court order determining the fair market value of heirs property under section 6 or 10 of this act or adopting the valuation of the property agreed to by all cotenants.
"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: (1) there is no agreement in a record binding all the cotenants which governs the partition of the property; (2) one or more of the cotenants acquired title from a relative, whether living or deceased; and (3) any of the following applies: (a) 20 percent or more of the interests are held by cotenants who are relatives; (b) 20 percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased; or (c) 20 percent or more of the cotenants are relatives.
"Partition by sale" means a court-ordered sale of the entire heirs property, whether by auction, sealed bids, or open-market sale conducted under section 10 of this act.
"Partition in kind" means the division of heirs property into physically distinct and separately titled parcels.
"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.
"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 act.
3. a. In an action to partition real property under N.J.S.2A:56-1 et seq., 2[based on information contained in the complaint, or upon motion of a party to the action or the court's own motion,]2 the court shall determine whether the property is heirs property. 2In making this determination, the court shall rely on information contained in the pleadings, or any other information provided to the court pursuant to the Rules of Court.2 If the court determines that the property is heirs property, 2pursuant to the Rules of Court,2 1the court 2[may] shall2 appoint a special master and 2may2, when appropriate, 2appoint2 a commissioner or commissioners to partition1 the property 1[shall be partitioned]1 under the 1[particular]1 partition process set forth in this act unless all of the cotenants otherwise agree in 1[a record] writing1.
b. This act is a supplement to N.J.S.2A:56-1 et seq. and if a partition action is governed by this act, it 1[replaces] preempts1 the provisions of N.J.S.2A:56-1 et seq. that are inconsistent with this act.
4. If the plaintiff in a partition action seeks an order of notice by publication and the court determines that the property may be heirs property, the 1[plaintiff, not later than 10 days after the court's determination, shall] court 2[may] shall2 order the plaintiff to1 post and maintain while the action is pending a conspicuous 2[sign] notice2 on the property that is the subject of the action 2in accordance with the Rules of Court2. The 2[sign] notice2 shall state that a partition 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 2[sign] notice2 the name of the plaintiff and the known defendants.
5. If the court appoints a commissioner or commissioners pursuant to N.J.S.2A:56-1 et seq. 1and the Rules of Court1, each commissioner 1[, in addition to the requirements set forth in N.J.S.2A:56-1 et seq. or court order making the one or more appointments,]1 shall be disinterested, impartial, and not a party to or a participant in the partition action.
6. a. (1) Except as otherwise provided in 1[subsections] subsection1 b. 1[and c.]1 of this section, if the court determines that the property involved in a partition action is heirs property, 1[then] the special master shall direct1 a determination of the property's fair market value, assuming sole ownership of the fee simple estate, 1[shall]1 be made by a disinterested real estate appraiser licensed in this State. On completion of the appraisal, the appraiser shall 1distribute the appraisal to the parties and1 file a sworn or verified appraisal with the 1[court] special master1.
(2) 1[After] Within 30 days after1 an appraisal is 1[conducted and]1 filed, the 1[court shall send notice to each party as required by the practice of the court, which includes: the appraised fair market value of the property; information concerning an opportunity to review the appraisal on file with the court; and information for filing an objection to the appraisal, stating grounds for the objection, within a timeframe established by the court] parties may file objections with the special master1.
(3) Following notice 1[to each party, the court shall] in accordance with the Rules of Court, the special master may1 conduct an appraisal hearing to determine the fair market value of the property1[, whether or not any objection to the appraisal is filed]1. In addition to the 1[court-ordered]1 appraisal, the 1[court] special master1 may consider any other evidence 1[of value]1 offered by a party. 1[The final determination of the property's fair market value shall be noticed to each party prior to proceeding further on the merits of a partition action.]1
b. 1[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.
c.]1 If all cotenants have agreed to the value of the property or to another method of valuation, the 1[court] special master1 may accept that value or the value produced by the agreed method of valuation.
7. a. If any cotenant requests partition by sale, after the determination of value under section 6 of this act, the party filing the partition action shall send 1written1 notice to the parties 1and the special master within 30 days1 that any cotenant, except a cotenant that requested partition by sale, may buy all of the interests of the cotenants that requested partition by sale.
b. Not later than 1[a date set by the court] 2[30] 452 days1 after the 1written1 notice is sent under subsection a. of this section, any cotenant except a cotenant that requested partition by sale may give 1written1 notice to the 1[court] parties and the special master1 that it elects to buy all of 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 6 of this act multiplied by the cotenant's fractional ownership of the entire parcel.
d. After expiration of the buyout notice period set 1[by the court]1 in subsection b. of this section, the following shall apply:
(1) If only one cotenant elects to buy all the interests of the cotenants that requested partition by sale, the 1[court] cotenant1 shall notify all the parties 1and the special master in writing1 of that fact.
(2) If more than one cotenant elects to buy all the interests of the cotenants that requested partition by sale, the 1[court, by order,] special master1 shall 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 send 1written1 notice to all the parties of that fact and of the price to be paid by each electing cotenant.
(3) If no cotenant elects to buy all the interests of the cotenants that requested partition by sale, the 1[court shall send notice to all the parties of that fact and] special master with notice to the parties shall report in writing to the court. The court shall1 resolve the partition action, by order, in accordance with subsections a. and b. of section 8 of this act.
e. If the 1[court sends notice to the]1 parties under paragraph (1) or (2) of subsection d. of this section1[, the court shall set a subsequent date by which electing] elect to buy all the interests, the1 cotenants shall be required to pay their apportioned price 1[into the court] within 2[30] 602 days 2[with notice]2 to the 2[special master1] Superior Court Trust Fund, in accordance with the procedures set forth in the Rules of Court2. After this date, the following shall apply:
(1) If all electing cotenants timely pay their apportioned price 1[into court]1, the 1[court] special master1 shall issue an order reallocating all the interests of the cotenants and 2[disburse] authorizing the disbursement of2 the amounts held 1[by the court] by the 2[special master1] Superior Court Trust Fund, in accordance with the procedures set forth in the Rules of Court2, to the persons entitled to them.
(2) If no electing cotenant timely pays its apportioned price, the 1special master shall report to the court in writing with written notice to the parties. The1 court shall resolve the partition action, by order, under subsections a. and b. of section 8 of this act as if the interests of the cotenants that requested partition by sale were not purchased.
(3) If one or more but not all of the electing cotenants fail to pay their apportioned price on time, the 1[court, on motion, shall give notice to the]1 electing cotenants that paid their apportioned price of the interest 1[remaining and the price for all the interests] may file a motion with the special master to determine the remaining interests and prices1.
f. 1[On a date determined by the court following the notice provided by the court pursuant to paragraph (3) of subsection e. of this section,] Within 2[30] 452 days following any order of the special master entered pursuant to paragraph (3) of subsection e. of this section,1 any cotenant that paid may elect to purchase all of the remaining interest by paying the entire price 1[into the court] with notice to the special master1. After this date, the following shall apply:
(1) If only one cotenant pays the entire price for the remaining interests, the 1[court] special master1 shall issue an order reallocating the remaining interest to that cotenant and 1[disburse the amounts held by it to the persons entitled to them] requiring refund of any excess payments1.
(2) If no cotenant pays the entire price for the remaining interests, the 1[court] special master shall report to the court in writing with written notice to the parties. The court1 shall resolve the partition action under subsection a. and b. of section 8 of this act as if the interests of the cotenants that requested partition by sale were not purchased.
(3) If more than one cotenant pays the entire price for the remaining interests, the 1[court] special master1 shall reapportion the remaining interests 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 interests. 1The special master shall report to the court in writing with written notice to the parties.1 The court shall issue an order reallocating all of the cotenants' interests1[, disburse the amounts held by it to the persons entitled to them, and refund any excess payment held by the court] and requiring refund of any excess payments1.
g. Not later than 1[a date determined by the court] 30 days1 after notices have been sent 1[to the parties]1 pursuant to subsection a. of this section, any cotenant entitled to buy an interest under this section may request the 1[court] special master1 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 1[court] special master1 receives a timely request under subsection g. of this section, the 1[court] special master1, after 1a1 hearing, may deny the request or authorize the requested additional sale on terms as the 1[court] special master1 determines are fair and reasonable, subject to the following limitations:
(1) A sale authorized under this subsection may occur only after 1[the purchase prices for]1 2the purchase prices for2 all interests subject to sale under subsections a. through f. of this section 2[1, and the purchase prices for such interests,1]2 have been 1[paid into court and those interests have been]1 2paid into the Superior Court Trust Fund and those interests have been2 reallocated among the cotenants as provided in those subsections 2. Any funds deposited into the Trust Fund pursuant to this section shall be distributed in accordance with the procedures set forth in the Rules of Court2; and
(2) The purchase price for the interest of a non-appearing cotenant is based on the 1[court's] special master's1 determination of value under section 6 of this act.
8. a. If all the interests of all cotenants that requested partition by sale are not purchased by other cotenants pursuant to section 7 of this act, or if after conclusion of the buyout period under that section, a cotenant remains that has requested partition in kind, the 1[court] special master1 shall 1[order] report to the court recommending1 partition in kind1. The court shall order partition in kind,1 unless the court, after consideration of the factors listed in section 9 of this act, finds that partition in kind will result in great 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 their individual interests aggregated.
b. If the court does not order partition in kind under subsection a. of this section, the court shall order partition by sale pursuant to section 10 of this act or, if no cotenant requested partition by sale, the court shall dismiss the action.
c. If the court orders partition in kind pursuant to subsection a. of this section, 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, make the partition in kind just and proportionate in value to the fractional interests held.
d. If the court orders partition in kind pursuant to subsection a. of this section, the court shall allocate to the cotenants that are unknown, un-locatable, or the subject of a default judgment, if their interests were not bought out pursuant to section 7 of this act, a part of the property representing the combined interests of these cotenants as determined by the court.
9. a. In determining under subsection a. of section 8 of this act whether partition in kind would result in great 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 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 it 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 their 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 as determined by the court.
b. The court may not consider any one factor in subsection a. of this section to be dispositive without weighing the totality of all relevant factors and circumstances.
10. a. If the court orders a sale of heirs property, the sale shall be an open-market sale unless the court finds that a sale by sealed bids or 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 2[a date set by the court] 10 days2 after the entry of the order, agree on a real estate broker licensed in this State 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 licensed in this State 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 its determination of value pursuant to section 6 of this act and on the terms and conditions established by the court.
c. If the broker appointed under subsection b. of this section 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 in section 11 of this act; and
(2) The sale may be completed in accordance with State law other than this act.
d. If the broker appointed under subsection b. of this section 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) Re-determine 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 an auction, the court shall set terms and conditions of the sale.
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.
11. a. Unless otherwise required to do so within a shorter time, a broker appointed under subsection b. of section 10 of this act to offer heirs property by open-market sale shall file a report with the court not later than seven days after receiving an offer to purchase the property for at least the value determined under section 6 or 10 of this act.
b. The report required by subsection a. of this section shall 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) Any other material facts relevant to the sale.
12. This act modifies, limits, and supersedes the federal "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).
13. This act shall take effect 1[immediately] on the 30th day next following enactment1, and apply to any partition actions filed on or after that date.
