Trial Engrossment of Amendment A04998 to House Bill 2232 P.N. 2986, Regular Session 2023-2024

A04998

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2232

Session of

2024

INTRODUCED BY RABB, N. NELSON, SANCHEZ, MADDEN, HILL-EVANS,

McNEILL, KINKEAD AND PARKER, APRIL 24, 2024

REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,

APRIL 24, 2024

AN ACT

Amending Title 20 (Decedents, Estates and Fiduciaries) of the

Pennsylvania Consolidated Statutes, providing for uniform

partition of heirs property.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Title 20 of the Pennsylvania Consolidated

Statutes is amended by adding a chapter to read:

CHAPTER 21A

UNIFORM PARTITION OF HEIRS PROPERTY ACT

Sec.

21A21. Short title of chapter.

21A22. Definitions.

21A23. Applicability and relation to other law.

21A23.1. Right of first refusal required.

21A24. Service and notice by posting.

21A24.1. Settlement conference.

21A25. Hearing officers.

21A26. Determination of value.

21A27. Cotenant buyout.

21A28. Partition alternatives.

21A29. Considerations for partition in kind.

21A30. Open-market sale, sealed bids or auction.

21A31. Report of open-market sale.

21A32. Uniformity of application and construction.

21A33. Relation to Electronic Signature in Global and National

Commerce Act.

§ 21A21. Short title of chapter.

This chapter may be referred to as the Uniform Partition of

Heirs Property Act.

§ 21A22. Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Ascendant." An individual who precedes another individual

in lineage, in the direct line of ascent from the other

individual.

"Collateral." An individual who is related to another

individual under the law of intestate succession of this

Commonwealth but who is not the other individual's ascendant or

descendant.

"Cotenant." One of two or more individuals who together hold

an ownership interest in real property as tenants in common.

"Descendant." An individual who follows another individual

in lineage, in the direct line of descent from the other

individual.

"Determination of value." A court order determining the fair

market value of heirs property under section 21A26 (relating to

determination of value) or 21A30 (relating to open-market sale,

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sealed bids or auction) or adopting the valuation of the

property agreed to by all cotenants.

"Heirs property." 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 an equitable

interest in the property via testate or intestate succession

or acquired the title from a relative, whether living or

deceased.

(3) Any of the following applies:

(i) twenty percent or more of the interests are held

by cotenants who are relatives;

(ii) twenty percent or more of the interests are

held by an individual who acquired title from a relative,

whether living or deceased; or

(iii) twenty percent or more of the cotenants are

relatives.

"Partition by sale." A court-ordered sale of the entire

heirs property, whether by auction, sealed bids or open-market

sale conducted under section 21A30.

"Partition in kind." The division of heirs property into

physically separated titled parcels.

"Record." 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." An ascendant, descendant or collateral or an

individual otherwise related to another individual by blood,

marriage, adoption or law of this Commonwealth other than this

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chapter.

§ 21A23. Applicability and relation to other law.

(a) General rule.--This chapter applies to partition actions

filed on or after the effective date of this section.

(b) Determination.--In an action to partition real property,

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 the cotenants otherwise agree in a record.

(relating to distribution in kind) and, if an action is governed

by this chapter, it replaces the provisions of section 3534 that

are inconsistent with this chapter.

§ 21A23.1. Right of first refusal required.

When a cotenant receives a bona fide offer from a noncotenant

to purchase a share or shares of an heir's property and the

cotenant intends to accept or respond with a counteroffer, the

cotenants who inherited their share or shares of the property or

the cotenants who are relatives to those cotenants who inherited

their share or shares of the property shall have the right to

purchase the shares for the identical price, terms and

conditions of the offer or counteroffer, with first priority to

a cotenant who is in possession of the heir's property as their

primary residence and second priority to a cotenant who

otherwise utilizes the property.

§ 21A24. Service and notice by posting.

(a) General rule.--This chapter does not limit or affect the

method by which services of a complaint in a partition action

may be made.

(b) Notice and posting.--If the plaintiff in a partition

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action seeks an order of notice by publication and the court

determines that the property may be heirs property, the

plaintiff, not later than 10 days after the court's

determination, shall post and maintain while the action is

pending a conspicuous sign on the property that is the subject

of the action. The sign shall 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.

§ 21A24.1. Settlement conference.

(a) General rule.--In a partition action of heirs property,

after service and notice under section 21A24 (relating to

service and notice by posting) and before additional action is

taken, the court shall hold a mandatory settlement conference

within 60 days after the date of determination of heirs property

under section 21A23(b) (relating to applicability and relation

to other law), or on a date agreed to by the parties, for the

purpose of holding settlement discussions.

(b) Notice.--After an heirs property determination is made

under section 21A23(b), the court shall promptly send a notice

to parties advising them of the time and place of the settlement

conference, the purpose of the conference and the requirements

of this section. The notice shall be in a form prescribed by the

Administrative Office of Pennsylvania Courts or, at the

discretion of the Administrative Office of Pennsylvania Courts,

the administrative judge of the judicial district in which the

action is pending. The plaintiff in the partition action shall

post a copy of the settlement conference notice in a conspicuous

place on the property within 20 days of the date of the notice.

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adjourned or reconvened during the pendency of the partition

action. At a conference held under this section, if the

defendant is appearing pro se, the court shall advise the

defendant of the nature of the action and the defendant's rights

and responsibilities as a defendant.

(d) Notice after failure to answer.--The following shall

apply:

(1) At the first settlement conference held under this

section, if the defendant has not filed a responsive

pleading, the court shall:

(i) advise the defendant of the requirement to

respond to the complaint;

(ii) explain what is required to respond to a

complaint in court;

(iii) advise the defendant that the ability to

contest the partition action and assert defenses may be

lost if a response is not filed;

(iv) set a deadline for any cotenants requesting

partition by sale; and

(v) provide information about available resources

for legal assistance.

(2) A defendant who appears at the settlement conference

but fails to file a timely responsive pleading shall be

presumed to have a reasonable excuse for the default and

shall be permitted to serve and file a responsive pleading,

without any substantive defenses deemed to have been waived,

within 30 days of initial appearance at the settlement

conference. The default shall be deemed vacated upon service

and filing of an answer or other responsive pleading.

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(e) Good faith negotiation required.--The plaintiffs and

defendants shall negotiate in good faith to reach a mutually

agreeable resolution, including, but not limited to, a tenancy

in common agreement, a cotenant buyout and the allocation,

mechanics and financing thereof or any other agreement or loss

mitigation that is fair and reasonable considering the totality

of factors.

(f) Failure to reach resolution.--If the parties do not

reach a mutually agreeable resolution, a judicial hearing

officer or other staff designated by the court to oversee the

settlement conference process shall make a report of findings of

fact, conclusions of law and recommendations for relief to the

court concerning any party's failure to negotiate in good faith

under subsection (e). If the court determines a plaintiff has

failed to negotiate in good faith, the court shall dismiss the

partition action.

(g) Abeyance allowed.--Motions submitted by a party to the

action may be held in abeyance while the settlement conference

process is ongoing, except for motions concerning:

(1) a determination of the percentage interests, if any,

owned by any alleged cotenant if the interests are in

dispute; and

(2) compliance with this section, including applications

to extend deadlines specified in this section.

§ 21A25. Hearing officers.

If the court appoints hearing officers under Pa.R.C.P. No.

1558 (relating to preliminary conference. appointment of hearing

officer), each hearing officer, in addition to the requirements

and disqualifications applicable to hearing officers, must be

disinterested and impartial and not a party to or a participant

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in the action.

§ 21A26. Determination of value.

(a) General rule.--Except as otherwise provided in

subsections (b) and (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) Agreement by cotenants.--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.

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) Appointment of appraiser.--If the court orders an

appraisal, the court shall appoint a disinterested real estate

appraiser licensed in this Commonwealth 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) Notice.--If an appraisal is conducted under subsection

(d), not later than 10 days after 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.

(3) That a party may file with the court an objection to

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the appraisal not later than 30 days after the notice is

sent, stating the grounds for the objection.

(f) Hearing.--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 sooner than 30 days

after 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) Posthearing determination and notice.--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.

§ 21A27. Cotenant buyout.

(a) Initial notice to parties.--If a cotenant requested

partition by sale, after the determination of value under

section 21A26 (relating to determination of value), 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) Cotenant notice to court.--Not later than 45 days after

the notice is sent under subsection (a), any cotenant except a

cotenant that requested partition by sale may give notice to the

court that it elects to buy all the interests of the cotenants

that requested partition by sale.

interests of a cotenant that requested partition by sale is the

value of the entire parcel determined under section 21A26

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multiplied by the cotenant's fractional ownership of the entire

parcel.

(d) Subsequent court notice to parties.--After expiration of

the period in subsection (b), the following rules apply:

(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 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 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 court

shall send notice to all the parties of that fact and resolve

the partition action under section 21A28(a) and (b) (relating

to partition alternatives).

(e) Payment and effect.--If the court sends notice to the

parties under subsection (d)(1) or (2), the court shall set a

date, not sooner than 60 days after the date the notice was

sent, by which electing cotenants must pay their apportioned

price into the court. In determining an appropriate date by

which electing cotenants must pay their apportioned price into

the court, the court shall consider the time necessary to obtain

financing and may extend the deadline upon request. After this

date, the following rules apply:

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(1) If all electing cotenants timely pay their

apportioned price into court, the court shall issue an order

reallocating all the interests of the cotenants and 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 21A28(a) and (b) 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 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) Purchase of remaining interest.--Not later than 20 days

after the court gives notice under subsection (e)(3), a cotenant

that paid may elect to purchase all of the remaining interest by

paying the entire price into the court. After the 20-day period,

the following rules apply:

(1) If only one cotenant pays the entire price for the

remaining interest, the court shall issue an order

reallocating the remaining interest to that cotenant. The

court shall issue promptly an order reallocating the

interests of all of the cotenants and disburse the amounts

held by it to the persons entitled to them.

(2) If no cotenant pays the entire price for the

remaining interest, the court shall resolve the partition

action under section 21A28(a) and (b) as if the interests of

the cotenants that requested partition by sale were not

purchased.

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(3) If more than one cotenant pays the entire price for

the remaining interest, the court shall 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. The court shall issue promptly an order

reallocating all of the cotenants' interests, disburse the

amounts held by it to the persons entitled to them and

promptly refund any excess payment held by the court.

(g) Request to authorize sale.--Not later than 45 days after

the court sends notice to the parties under subsection (a), a

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) Denial of request or authorization of sale.--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), (b), (c), (d), (e) and (f) have

been paid into court and those interests have been

reallocated among the cotenants as provided in those

subsections.

(2) The purchase price for the interest of a non-

appearing cotenant is based on the court's determination of

value under section 21A26.

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§ 21A28. Partition alternatives.

(a) Partition in kind.--If all the interests of all

cotenants that requested partition by sale are not purchased by

other cotenants under section 21A27 (relating to cotenant

buyout), or if after conclusion of the buyout under section

21A27, 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 21A29 (relating

to considerations for partition in kind), 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) Partition by sale or dismissal of action.--If the court

does not order partition in kind under subsection (a), the court

shall order partition by sale under section 21A30 (relating to

open-market sale, sealed bids or auction) or, if no cotenant

requested partition by sale, the court shall dismiss the action.

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) Allocation of interests among unknown, unlocatable or

defaulting cotenants.--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 their

interests were not bought out under section 21A27, a part of the

property representing the combined interests of these cotenants

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as determined by the court and this part of the property shall

remain undivided.

§ 21A29. Considerations for partition in kind.

(a) General rule.--In determining under section 21A28(a)

(relating to partition alternatives) 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 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 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

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property or have contributed to the physical improvement,

maintenance or upkeep of the property; and

(7) any other relevant factor.

(b) Weighing totality of considerations.--The court may not

consider any one factor in subsection (a) to be dispositive

without weighing the totality of all relevant factors and

circumstances.

§ 21A30. Open-market sale, sealed bids or auction.

(a) General rule.--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 an auction would be more

economically advantageous and in the best interest of the

cotenants as a group.

(b) Appointment of broker.--If the court orders an open-

market sale and the parties, not later than 10 days after the

entry of the order, agree on a real estate broker licensed in

this Commonwealth 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 Commonwealth

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.

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

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requirements in section 21A31 (relating to report of open-

market sale).

(2) The sale may be completed in accordance with the

laws of this Commonwealth.

(d) Options to court when no offer obtained.--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;

(3) order that the property be sold by sealed bids or at

an auction.

(e) Sale by sealed bid or auction.--If the court orders a

sale by sealed bids or an auction, the court shall set terms and

conditions of the sale. If the court orders an auction, the

auction must be conducted under 68 Pa.C.S. § 2306(c) (relating

to effect of certification of vacancy and abandonment).

(f) Purchaser credit authorized.--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.

§ 21A31. Report of open-market sale.

(a) Duty of broker.--Unless required to do so within a

shorter time, a broker appointed under section 21A30(b)

(relating to open-market sale, sealed bids or auction) to offer

heirs property for 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

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section 21A26 (relating to determination of value) or 21A30.

(b) Content of report.--The report required by subsection

(a) 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 amount to be paid to lienholders.

(6) A statement of contractual or other arrangements or

conditions of the broker's commission.

(7) Other material facts relevant to the sale.

§ 21A32. Uniformity of application and construction.

In applying and construing this uniform act, consideration

shall be given to the need to promote uniformity of the law with

respect to its subject matter among states that enact it.

§ 21A33. Relation to Electronic Signature in Global and

National Commerce Act.

(a) General rule.--Except as provided for in subsection (b),

this chapter modifies, limits or supersedes the Electronic

Signatures in Global and National Commerce Act (Public Law 106-

229, 15 U.S.C. § 7001 et seq.).

(b) Exceptions.--

(1) This chapter does not modify, limit or supersede

section 101(c) of the Electronic Signatures in Global and

National Commerce Act (15 U.S.C. § 7001(c)).

(2) This chapter does not authorize electronic delivery

of any of the notices described in section 103(b) of the

Electronic Signatures in Global and National Commerce Act (15

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U.S.C. § 7003(b)).

Section 2. This act shall take effect in 60 days.

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