In 2019, the New York State Legislature enacted the “Uniform Partition of Heirs Property Act” (UPHPA), also known as RPAPL § 993. It is intended to prevent families from losing “heirs property” through forced sales by imposing certain requirements. This situation arises when a non-family member buys an interest in property co-owned by family members. The non-family member then seeks to physically partition the property or force a sale in order to get their share of the proceeds. A recent New York appellate case interpreted the UPHPA, providing important guidance on when plaintiffs can seek partition or sale.

What Is Heirs Property?

Heirs property is defined as property held in tenancy in common in which:

(1) there is no agreement in a record binding all of the co-tenants which governs the partition of the property;

(2) any of the co-tenants acquired title from a relative, whether living or deceased;

(3) the property is used for residential or agricultural purposes; and

(4) any of the following applies:

(a) twenty percent or more of the interests are held by co-tenants who are relatives;

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

(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.

How Does the UHPHA Protect Heirs?

The UHPHA requires that in any partition action that concerns heirs property, the court must set the fair market value of the property via appraisal, the co-tenants must be given a right of first refusal and partition in kind should be done, in lieu of selling the property, if possible. A partition in kind is where the court orders the physical division of the property into separate parcels for each owner. The court must also ensure sales are structured in a manner that preserves family wealth.

In addition, when seeking judicial intervention, the parties must show they negotiated in good faith to reach an agreement that is fair and reasonable, considering various equitable factors indicated in the statute.

How Has the Law Been Applied?

In Laurelton Estates, LLC v Prince, the New York Appellate Division, Second Department addressed the application of the UPHPA. The plaintiff in the case acquired a 75% interest in the heirs’ property by purchasing portions of the property from the defendant’s family. The defendant had lived at the property and her son still lived there. The property was in the family for over 50 years. The plaintiff commenced the action seeking a judgment directing its sale.

Prior to seeking summary judgment, the plaintiff extended settlement offers pursuant to RPAPL 993(5), which requires good faith negotiation. The offers by the plaintiff were based on fair market value but did not consider any equitable considerations, including the defendant’s sentimental attachment to the property as her family home where she was raised and where her son lives now. The Court held that pursuant to RPAPL 993(5)(e) and 993 (9)(a), the plaintiff failed to act in good faith by not considering these equitable factors. As a result, the plaintiff’s motion for summary judgment was denied, and the defendant’s motion to dismiss the action in its entirety was granted.

This holding is a landmark decision in the application of the UPHPA and certainly serves the law’s interest in protecting heirs who own at least 20% of their family’s property.

If you have any questions about the UPHPA or are involved in a matter concerning the UPHPA, please feel free to contact one of our attorneys.