H.B. 588
GENERAL ASSEMBLY OF NORTH CAROLINA
Apr 6, 2023
SESSION 2023 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH10297-MQ-74A
Short Title: Uniform Partition of Heirs Property Act. (Public)
Sponsors: Representative K. Hall.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO ENACT THE UNIFORM PARTITION OF HEIRS PROPERTY ACT.
3 The General Assembly of North Carolina enacts:
4 SECTION 1. Article 2 of Chapter 46A of the General Statutes is amended by adding
5 a new Part to read:
6 "Part 4. Uniform Partition of Heirs Property Act.
7 "§ 46A-87. Short title.
8 This Part shall be known and may be cited as the "Uniform Partition of Heirs Property Act."
9 "§ 46A-88. Definitions.
10 As used in this Part, the following definitions apply:
11 (1) Ascendant. – An individual who precedes another individual in lineage, in the
12 direct line of ascent from the other individual.
13 (2) Collateral. – An individual who is related to another individual under the
14 operation of the intestate succession provisions of Chapter 29 of the General
15 Statutes but who is not the other individual's ascendant or descendant.
16 (3) Descendant. – An individual who follows another individual in lineage, in the
17 direct line of descent from the other individual.
18 (4) Determination of value. – A court order determining the fair market value of
19 heirs property under this Part or adopting the valuation of the property agreed
20 to by all cotenants.
21 (5) Heirs property. – Real property held in tenancy in common which satisfies all
22 of the following requirements as of the filing of a partition proceeding:
23 a. There is no agreement in a record binding all the cotenants which
24 governs the partition of the property.
25 b. One or more of the cotenants acquired title from a relative, whether
26 living or deceased.
27 c. Any of the following apply:
28 1. Twenty percent (20%) or more of the interests are held by
29 cotenants who are relatives.
30 2. Twenty percent (20%) or more of the interests are held by an
31 individual who acquired title from a relative, whether living or
32 deceased.
33 3. Twenty percent (20%) or more of the cotenants are relatives.
34 (6) Partition by sale. – A court-ordered sale of the entire heirs property, whether
35 by auction, sealed bids, or open-market sale conducted under G.S. 46A-96.
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1 (7) Partition in kind. – The division of heirs property into physically distinct and
2 separately titled parcels.
3 (8) Record. – Information that is inscribed on a tangible medium or that is stored
4 in an electronic or other medium and is retrievable in perceivable form.
5 (9) Relative. – An ascendant, descendant, or collateral or an individual otherwise
6 related to another individual by blood, marriage, adoption, or law of this State
7 other than this Part.
8 "§ 46A-89. Applicability; relation to other law.
9 (a) In a proceeding to partition real property under Article 2 of this Chapter, the court
10 shall determine whether the property is heirs property. If the court determines that the property
11 is heirs property, the property shall be partitioned under this Part unless all of the cotenants
12 otherwise agree in a record.
13 (b) This Part supplements Article 1 of this Chapter and the other Parts of this Article and,
14 if a proceeding is governed by this Part, replaces provisions of this Chapter that are inconsistent
15 with this Part.
16 "§ 46A-90. Service; notice by posting.
17 (a) This Part does not limit or affect the method by which service of a summons and
18 notice in a partition proceeding may be made.
19 (b) If the petitioner in a partition proceeding seeks authorization for notice by publication
20 and the court determines that the property may be heirs property, the petitioner, not later than 10
21 days after the court's determination, shall post a conspicuous sign on the property that is the
22 subject of the proceeding. The sign must state that the proceeding has commenced and identify
23 the name and address of the court and the common designation by which the property is known.
24 The court may require the petitioner to publish on the sign the name of the petitioner and the
25 known respondents.
26 "§ 46A-91. Commissioners.
27 If the court appoints commissioners pursuant to G.S. 46A-50 or G.S. 46A-76, each
28 commissioner, in addition to the requirements and disqualifications applicable to commissioners
29 in G.S. 46A-50, must be disinterested and impartial and not a party to or a participant in the
30 proceeding.
31 "§ 46A-92. Determination of value.
32 (a) Except as otherwise provided in subsections (b) and (c) of this section, if the court
33 determines that the property that is the subject of a partition proceeding is heirs property, the
34 court shall determine the fair market value of the property by ordering an appraisal pursuant to
35 subsection (d) of this section.
36 (b) If all cotenants have agreed to the value of the property or to another method of
37 valuation, the court shall adopt that value or the value produced by the agreed method of
38 valuation.
39 (c) If the court determines that the evidentiary value of an appraisal is outweighed by the
40 cost of the appraisal, the court, after an evidentiary hearing, shall determine the fair market value
41 of the property and send notice to the parties of the value.
42 (d) If the court orders an appraisal, the court shall appoint a disinterested real estate
43 appraiser licensed in this State to determine the fair market value of the property assuming sole
44 ownership of the fee simple estate. On completion of the appraisal, the appraiser shall file a sworn
45 or verified appraisal with the court.
46 (e) If an appraisal is conducted pursuant to subsection (d) of this section, not later than
47 10 days after the appraisal is filed, the court shall send notice to each party with a known address,
48 stating the following:
49 (1) The appraised fair market value of the property.
50 (2) That the appraisal is available at the office of the clerk of superior court.
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1 (3) That a party may file with the court an objection to the appraisal not later than
2 30 days after the notice is sent, stating the grounds for the objection.
3 (f) If an appraisal is filed with the court pursuant to subsection (d) of this section, the
4 court shall conduct a hearing to determine the fair market value of the property no sooner than
5 30 days after a copy of the notice of the appraisal is sent to each party under subsection (e) of
6 this section, whether or not an objection to the appraisal is filed under subdivision (3) of
7 subsection (e) of this section. In addition to the court-ordered appraisal, the court may consider
8 any other evidence of value offered by a party.
9 (g) After a hearing under subsection (f) of this section, but before considering the merits
10 of the partition proceeding, the court shall determine the fair market value of the property and
11 send notice to the parties of the value.
12 "§ 46A-93. Cotenant buyout.
13 (a) If any cotenant requested partition by sale, after the determination of value under
14 G.S. 46A-92, the court shall send notice to the parties that any cotenant except a cotenant that
15 requested partition by sale may buy all the interests of the cotenants that requested partition by
16 sale.
17 (b) No later than 45 days after the notice is sent under subsection (a) of this section, any
18 cotenant except a cotenant that requested partition by sale may give notice to the court that the
19 cotenant elects to buy all the interests of the cotenants that requested partition by sale.
20 (c) The purchase price for each of the interests of a cotenant that requested partition by
21 sale is the value of the entire parcel determined under G.S. 46A-92 multiplied by the cotenant's
22 fractional ownership of the entire parcel.
23 (d) After expiration of the period in subsection (b) of this section, the following rules
24 apply:
25 (1) If only one cotenant elects to buy all of the interests of the cotenants that
26 requested partition by sale, the court shall notify all the parties of that fact.
27 (2) If more than one cotenant elects to buy all the interests of the cotenants that
28 requested partition by sale, the court shall allocate the right to buy those
29 interests among the electing cotenants based on each electing cotenant's
30 existing fractional ownership of the entire parcel divided by the total existing
31 fractional ownership of all cotenants electing to buy and send notice to all the
32 parties of that fact and of the price to be paid by each electing cotenant.
33 (3) If no cotenant elects to buy all the interests of the cotenants that requested
34 partition by sale, the court shall send notice to all the parties of that fact and
35 resolve the partition proceeding under G.S. 46A-94(a) and (b).
36 (e) If the court sends notice to the parties under subdivision (1) or (2) of subsection (d)
37 of this section, the court shall set a date, no sooner than 60 days after the date the notice was sent,
38 by which electing cotenants must pay their apportioned price into the court. After the date set by
39 the court, the following rules apply:
40 (1) If all electing cotenants timely pay their apportioned price into court, the court
41 shall issue an order reallocating all the interests of the cotenants and disburse
42 the amounts held by the court to the persons entitled to them.
43 (2) If no electing cotenant timely pays that cotenant's apportioned price, the court
44 shall resolve the partition proceeding under G.S. 46A-94(a) and (b) as if the
45 interests of the cotenants that requested partition by sale were not purchased.
46 (3) If one or more but not all of the electing cotenants fail to pay their apportioned
47 price on time, the court shall give notice to the electing cotenants that paid
48 their apportioned price of the interest remaining and the price for all that
49 interest.
50 (f) No later than 20 days after the court gives notice pursuant to subdivision (3) of
51 subsection (e) of this section, any cotenant that paid may elect to purchase all of the remaining
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1 interest by paying the entire price into the court. After the 20-day period, the following rules
2 apply:
3 (1) If only one cotenant pays the entire price for the remaining interest, the court
4 shall issue an order reallocating the remaining interest to that cotenant. The
5 court shall promptly issue an order reallocating the interests of all of the
6 cotenants and disburse the amounts held by the court to the persons entitled to
7 them.
8 (2) If no cotenant pays the entire price for the remaining interest, the court shall
9 resolve the partition proceeding under G.S. 46A-94(a) and (b) as if the
10 interests of the cotenants that requested partition by sale were not purchased.
11 (3) If more than one cotenant pays the entire price for the remaining interest, the
12 court shall reapportion the remaining interest among those paying cotenants,
13 based on each paying cotenant's original fractional ownership of the entire
14 parcel divided by the total original fractional ownership of all cotenants that
15 paid the entire price for the remaining interest. The court shall promptly issue
16 an order reallocating all of the cotenants' interests, disburse the amounts held
17 by the court to the persons entitled to them, and promptly refund any excess
18 payment held by the court.
19 (g) No later than 45 days after the court sends notice to the parties pursuant to subsection
20 (a) of this section, any cotenant entitled to buy an interest under this section may request the court
21 to authorize the sale as part of the pending proceeding of the interests of cotenants named as
22 respondents and served with the complaint but that did not appear in the proceeding.
23 (h) If the court receives a timely request under subsection (g) of this section, the court,
24 after hearing, may deny the request or authorize the requested additional sale on such terms as
25 the court determines are fair and reasonable, subject to all of the following limitations:
26 (1) A sale authorized under this subsection may occur only after the purchase
27 prices for all interests subject to sale under subsections (a) through (f) of this
28 section have been paid into the court and those interests have been reallocated
29 among the cotenants as provided in those subsections.
30 (2) The purchase price for the interest of a non-appearing cotenant is based on the
31 court's determination of value under G.S. 46A-92.
32 "§ 46A-94. Partition alternatives.
33 (a) If all the interests of all cotenants that requested partition by sale are not purchased
34 by other cotenants pursuant to G.S. 46A-93, or if, after conclusion of the buyout under
35 G.S. 46A-93, a cotenant remains that has requested partition in kind, the court shall order
36 partition in kind unless the court, after consideration of the factors listed in G.S. 46A-95, finds
37 that partition in kind will result in substantial injury to the cotenants as a group. In considering
38 whether to order partition in kind, the court shall approve a request by two or more parties to
39 have their individual interests aggregated.
40 (b) If the court does not order partition in kind under subsection (a) of this section, the
41 court shall order partition by sale pursuant to G.S. 46A-96 or, if no cotenant requested partition
42 by sale, the court shall dismiss the proceeding.
43 (c) If the court orders partition in kind pursuant to subsection (a) of this section, the court
44 may require that one or more cotenants pay one or more other cotenants' amounts so that the
45 payments, taken together with the value of the in-kind distributions to the cotenants, will make
46 the partition in kind just and proportionate in value to the fractional interests held.
47 (d) If the court orders partition in kind, the court shall allocate to the cotenants that are
48 unknown, unlocatable, or the subject of a default judgment, if their interests were not bought out
49 pursuant to G.S. 46A-93, a part of the property representing the combined interests of these
50 cotenants as determined by the court and the shares of these cotenants shall be apportioned
51 together as one parcel.
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1 "§ 46A-95. Considerations for partition in kind.
2 (a) In determining under G.S. 46A-94(a) whether partition in kind would result in
3 substantial injury to the cotenants as a group, the court shall consider the following:
4 (1) Whether the heirs property practicably can be divided among the cotenants.
5 (2) Whether partition in kind would apportion the property in such a way that the
6 aggregate fair market value of the parcels resulting from the division would
7 be materially less than the value of the property if it were sold as a whole,
8 taking into account the condition under which a court-ordered sale likely
9 would occur.
10