House Bill 1605, passed by the General Assembly and approved by the Governor, changes the landscape for partition lawsuits in Virginia. Because existing Virginia law was not as bad as the proponents of the new law believed, the improvements to Virginia law are not as significant as proponents imagine. The changes will, however, add unwelcome expense to partition actions.
The new law brings to Virginia provisions of the Uniform Partition of Heirs Property Act, a project that the Uniform Law Commission began in 2007. According to a 2016 article on the American Bar Association’s website, the ABA’s Section of Real Property, Trust and Estate Law “helped convince the Uniform Law Commission to undertake [the UPHPA project] in 2007, … to address partition action abuses that have led to significant property loss.” The title of the 2016 ABA article give a glimpse of the concern of the ABA, “Restoring Hope for Heirs Property Owners: The Uniform Partition of Heirs Property Act.”
According to the Uniform Law Commission:
“The Uniform Partition of Heirs Property Act (UPHPA) helps preserve family wealth passed to the next generation in the form of real property. If a landowner dies intestate, the real estate passes to the landowner’s heirs as tenants-in-common under state law. Tenants-in-common are vulnerable because any individual tenant can force a partition. Too often, real estate speculators acquire a small share of heirs’ property in order to file a partition action and force a sale. Using this tactic, an investor can acquire the entire parcel for a price well below its fair market value and deplete a family’s inherited wealth in the process. UPHPA provides a series of simple due process protections: notice, appraisal, right of first refusal, and if the other co-tenants choose not to exercise their right and a sale is required, a commercially reasonable sale supervised by the court to ensure all parties receive their fair share of the proceeds.”
The 2016 ABA article details history of partition laws, and offers details that are well worth the time to read if the topic is of interest. Where I part ways a bit with the ABA on this subject is their blanket statement that over the past decades partition sales moved from an extraordinary remedy to an ordinary course of relief granted by courts. My experience does not support that such a shift has taken place in Virginia. Certainly there have been changes over the years, and in any area of law one can find instances where judges granted relief that maybe should not have been granted.
In my decades of practicing law in Virginia, an ordered sale has always been the option only available after less drastic remedies were affirmatively shown by the petitioner to not be appropriate. From current Virginia law, Va. Code § 8.01-83:
Va. Code § 8.01-83. Allotment to one or more parties, or sale, in lieu of partition.
When partition cannot be conveniently made, the entire subject may be allotted to any one or more of the parties who will accept it and pay therefor to the other parties such sums of money as their interest therein may entitle them to; or in any case in which partition cannot be conveniently made, if the interest of those who are entitled to the subject, or its proceeds, will be promoted by a sale of the entire subject, or allotment of part and sale of the residue, the court, notwithstanding any of those entitled may be a person under a disability, may order such sale, or an allotment of a part thereof to any one or more of the parties who will accept it and pay therefor to the other parties such sums of money as their interest therein may entitle them to, and a sale of the residue, and make distribution of the proceeds of sale, according to the respective rights of those entitled, taking care, when there are creditors of any deceased person who was a tenant in common, joint tenant, or coparcener, to have the proceeds of such deceased person’s part applied according to the rights of such creditors.
In cases I’ve been involved in, a partition sale is only ordered after the court is satisfied from the evidence that the property cannot be divided (partitioned), and that no owner or owners will accept the entire property and pay the other owners fair value for the other owners’ shares.
My understanding is that the Boyd Graves Conference stepped into action on this in the 2020 General Assembly, and worked to preserve the existing provisions in Virginia law that have long afforded protection for land owners. I am thankful for their efforts to keep in check the proponents who apparently wanted to “do something”… the skeptic in me suspects the motivation was more to be seen as aligned with a “good cause” and less with regard to what “fix” was needed and what the “fix” actually accomplished.
The new law will require, in most cases, an appraisal of the property. That is an acceptable, if not good, step – though in nearly all of my cases judges already required an appraisal (and an appraisal was always required if any party raised any question whatsoever about value. What I am disappointed to see in the new law is the requirement in the new 8.01-83.3:
If the court appoints commissioners pursuant to Article 11 (§ 8.01-96 et seq.), each commissioner, in addition to the requirements and disqualifications applicable to commissioners in Article 11, shall be disinterested and impartial and not a party to or participant in the action.
This provision is completely new, and in my view unnecessary. It will add an expense to partition lawsuits – an expense that of course will be borne by the owners of the property.
Leave a Reply