2011-2012 Bill 1239: Uniform Partition of Heirs Property Act - South Carolina Legislature Online

1 South Carolina General Assembly 2 119th Session, 2011-2012 3 4 S. 1239 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Senator Hayes 10 Document Path: l:\council\bills\agm\19445ab12.docx 11 12 Introduced in the Senate on February 21, 2012 13 Currently residing in the Senate Committee on Judiciary 14 15 Summary: Uniform Partition of Heirs Property Act 16 17 18 HISTORY OF LEGISLATIVE ACTIONS 19 20 Date Body Action Description with journal page number 21 2/21/2012 Senate Introduced and read first time ( Senate Journalpage 3) 22 2/21/2012 Senate Referred to Committee on Judiciary ( Senate Journalpage 3) 23 2/29/2012 Senate Referred to Subcommittee: Malloy (ch), Ford, Knotts, Massey, S.Martin 24 25 26 VERSIONS OF THIS BILL 27 28 2/21/2012 29 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 12 1976, BY ADDING ARTICLE 3 TO CHAPTER 61, TITLE 15 13 SO AS TO ENACT THE “UNIFORM PARTITION OF HEIRS 14 PROPERTY ACT”; TO PROVIDE RELATED DEFINITIONS, 15 TO PROVIDE FOR THE APPLICABILITY OF THE ARTICLE, 16 THE OBLIGATION OF A COURT TO DETERMINE 17 WHETHER SUBJECT PROPERTY IS HEIRS PROPERTY, 18 AND TO PROVIDE INCONSISTENCIES IN CHAPTER 61, 19 TITLE 15 BE RESOLVED IN FAVOR OF PROVISIONS IN 20 ARTICLE 3; TO PROVIDE FOR NOTICE BY PUBLICATION 21 AND THE EFFECT OF THE ARTICLE ON RELATED 22 LIMITATIONS; TO IMPOSE CERTAIN REQUIREMENTS 23 FOR COMMISSIONERS APPOINTED BY THE COURT; TO 24 PROVIDE PROCEDURES FOR THE COURT TO FOLLOW IN 25 DETERMINING THE VALUE OF HEIRS PROPERTY; TO 26 PROVIDE A PROCEDURE FOR A COTENANT BUYOUT; TO 27 PROVIDE PETITION ALTERNATIVES; TO PROVIDE 28 CONSIDERATIONS APPLICABLE TO A PARTITION IN 29 KIND; TO PROVIDE PROCEDURES FOR OPENMARKET 30 SALES, SEALED BIDS, OR AUCTIONS; TO IMPOSE A 31 REPORTING REQUIREMENT ON A BROKER APPOINTED 32 TO OFFER HEIRS PROPERTY FOR OPENMARKET SALE; 33 TO REQUIRE CERTAIN CONSIDERATIONS BE MADE TO 34 PROMOTE UNIFORMITY OF THE APPLICATION AND 35 CONSTRUCTION OF THIS ACT; TO SPECIFY HOW THE 36 ACT MODIFIES CERTAIN FEDERAL ACTS PERTAINING TO 37 ELECTRONIC SIGNATURES; AND TO DESIGNATE THE 38 EXISTING PROVISIONS OF CHAPTER 61 AS ARTICLE 1. 39 40 Be it enacted by the General Assembly of the State of South 41 Carolina: 42

[1239] 2 1 SECTION 1. Chapter 61, Title 15 of the 1976 Code is amended 2 by adding: 3 4 “Article 3 5 6 Uniform Partition of Heirs Property Act 7 8 Section 1561310. This article may be cited as the ‘Uniform 9 Partition of Heirs Property Act’. 10 11 Section 1561320. As used in this article: 12 (1) ‘Ascendant’ means an individual who precedes another 13 individual in lineage, in the direct line of ascent from the other 14 individual. 15 (2) ‘Collateral’ means an individual who is related to another 16 individual under the law of intestate succession of this State but 17 who is not the other individual’s ascendant or descendant. 18 (3) ‘Descendant’ means an individual who follows another 19 individual in lineage, in the direct line of descent from the other 20 individual. 21 (4) ‘Determination of value’ means a court order determining 22 the fair market value of heirs property under Sections 1561360 or 23 1561400 or adopting the valuation of the property agreed to by all 24 cotenants. 25 (5) ‘Heirs property’ means real property held in tenancy in 26 common which satisfies all of the following requirements as of the 27 filing of a partition action: 28 (a) there is no agreement in a record binding all the 29 cotenants which governs the partition of the property; 30 (b) one or more of the cotenants acquired title from a 31 relative, whether living or deceased; and 32 (c) any of the following applies: 33 (i) twenty percent or more of the interests are held by 34 cotenants who are relatives; 35 (ii) twenty percent or more of the interests are held by an 36 individual who acquired title from a relative, whether living or 37 deceased; or 38 (iii) twenty percent or more of the cotenants are relatives. 39 (6) ‘Partition by sale’ means a courtordered sale of the entire 40 heirs property, whether by auction, sealed bids, or openmarket sale 41 conducted under Section 1561400. 42 (7) ‘Partition in kind’ means the division of heirs property into 43 physically distinct and separately titled parcels.

[1239] 3 1 (8) ‘Record’ means information that is inscribed on a tangible 2 medium or that is stored in an electronic or other medium and is 3 retrievable in perceivable form. 4 (9) ‘Relative’ means an ascendant, descendant, or collateral or 5 an individual otherwise related to another individual by blood, 6 marriage, adoption, or law of this State other than this article. 7 8 Section 1561330. (A) This article applies to partition actions 9 filed on or after the effective date of this article. 10 (B) In an action to partition real property under Article 1, the 11 court shall determine whether the property is heirs property. If the 12 court determines that the property is heirs property, the property 13 must be partitioned under this article unless all of the cotenants 14 otherwise agree in a record. 15 (C) This article supplements the provisions of Article 1, and if 16 the provisions of this article control. 17 18 Section 1561340. (A) This article does not limit or affect the 19 method by which service of pleadings in a partition action may be 20 made. 21 (B) If the plaintiff in a partition action seeks notice by 22 publication and the court determines that the property may be heirs 23 property, the plaintiff, not later than ten days after the 24 determination of the court, shall post and maintain while the action 25 is pending a conspicuous sign on the property that is the subject of 26 the action. The sign must state that the action has commenced and 27 identify the name and address of the court and the common 28 designation by which the property is known. The court may 29 require the plaintiff to publish on the sign the name of the plaintiff 30 and the known defendants. 31 32 Section 1561350. If the court appoints commissioners pursuant 33 to Article 1, each commissioner, in addition to the requirements 34 and disqualifications applicable to commissioners in Article 1, 35 must be disinterested and impartial and not a party to or a 36 participant in the action. 37 38 Section 1561360. (A) Except as otherwise provided in 39 subsections (B) and (C), if the court determines that the property 40 that is the subject of a partition action is heirs property, the court 41 shall determine the fair market value of the property by ordering 42 an appraisal pursuant to subsection (D).

[1239] 4 1 (B) If all cotenants have agreed to the value of the property or 2 to another method of valuation, the court shall adopt that value or 3 the value produced by the agreed method of valuation. 4 (C) If the court determines that the evidentiary value of an 5 appraisal is outweighed by the cost of the appraisal, the court, after 6 an evidentiary hearing, shall determine the fair market value of the 7 property and send notice to the parties of the value. 8 (D) If the court orders an appraisal, the court shall appoint a 9 disinterested real estate appraiser licensed in this State to 10 determine the fair market value of the property assuming sole 11 ownership of the fee simple estate. On completion of the 12 appraisal, the appraiser shall file a sworn or verified appraisal with 13 the court. 14 (E) If an appraisal is conducted pursuant to subsection (D), not 15 later than ten days after the appraisal is filed, the court shall send 16 notice to each party with a known address, stating: 17 (1) the appraised fair market value of the property; 18 (2) that the appraisal is available at the clerk’s office; and 19 (3) that a party may file with the court an objection to the 20 appraisal not later than thirty days after the notice is sent, stating 21 the grounds for the objection. 22 (F) If an appraisal is filed with the court pursuant to subsection 23 (D), the court shall conduct a hearing to determine the fair market 24 value of the property not sooner than thirty days after a copy of the 25 notice of the appraisal is sent to each party under subsection (E), 26 whether or not an objection to the appraisal is filed under 27 subsection (E)(3). In addition to the courtordered appraisal, the 28 court may consider any other evidence of value offered by a party. 29 (G) After a hearing under subsection (F), but before 30 considering the merits of the partition action, the court shall 31 determine the fair market value of the property and send notice to 32 the parties of the value. 33 34 Section 1561370. (A) If any cotenant requests partition by 35 sale, after the determination of value under Section 1561360, the 36 court shall send notice to the parties that any cotenant except a 37 cotenant that requested partition by sale may buy all the interests 38 of the cotenants that requested partition by sale. 39 (B) Not later than fortyfive days after the notice is sent under 40 subsection (A), any cotenant except a cotenant that requested 41 partition by sale may give notice to the court that it elects to buy 42 all the interests of the cotenants that requested partition by sale.

[1239] 5 1 (C) The purchase price for each of the interests of a cotenant 2 that requested partition by sale is the value of the entire parcel 3 determined under Section 1561360 multiplied by the cotenant’s 4 fractional ownership of the entire parcel. 5 (D) After expiration of the period in subsection (B), the 6 following rules apply: 7 (1) If only one cotenant elects to buy all the interests of the 8 cotenants that requested partition by sale, the court shall notify all 9 the parties of that fact. 10 (2) If more than one cotenant elects to buy all the interests of 11 the cotenants that requested partition by sale, the court shall 12 allocate the right to buy those interests among the electing 13 cotenants based on each electing cotenant’s existing fractional 14 ownership of the entire parcel divided by the total existing 15 fractional ownership of all cotenants electing to buy and send 16 notice to all the parties of that fact and of the price to be paid by 17 each electing cotenant. 18 (3) If no cotenant elects to buy all the interests of the 19 cotenants that requested partition by sale, the court shall send 20 notice to all the parties of that fact and resolve the partition action 21 under Section 1561380(A) and (B). 22 (E) If the court sends notice to the parties under subsection (D) 23 (1) or (2), the court shall set a date, not sooner than sixty days after 24 the date the notice was sent, by which electing cotenants must pay 25 their apportioned price into the court. After this date, the following 26 rules apply: 27 (1) If all electing cotenants timely pay their apportioned 28 price into court, the court shall issue an order reallocating all the 29 interests of the cotenants and disburse the amounts held by the 30 court to the persons entitled to them. 31 (2) If no electing cotenant timely pays its apportioned price, 32 the court shall resolve the partition action under Section 33 1561380(A) and (B) as if the interests of the cotenants that 34 requested partition by sale were not purchased. 35 (3) If one or more but not all of the electing cotenants fail to 36 pay their apportioned price on time, the court, on motion, shall 37 give notice to the electing cotenants that paid their apportioned 38 price of the interest remaining and the price for all the interest. 39 (F) Not later than twenty days after the court gives notice 40 pursuant to subsection (E)(3), any cotenant who paid may elect to 41 purchase all of the remaining interest by paying the entire price 42 into the court. After the twentyday period, the following rules 43 apply:

[1239] 6 1 (1) If only one cotenant pays the entire price for the 2 remaining interest, the court shall issue an order reallocating the 3 remaining interest to that cotenant. The court shall issue promptly 4 an order reallocating the interests of all of the cotenants and 5 disburse the amounts held by it to the persons entitled to them. 6 (2) If no cotenant pays the entire price for the remaining 7 interest, the court shall resolve the partition action under Section 8 1561380(A) and (B) as if the interests of the cotenants that 9 requested partition by sale were not purchased. 10 (3) If more than one cotenant pays the entire price for the 11 remaining interest, the court shall reapportion the remaining 12 interest among those paying cotenants, based on each paying 13 cotenant’s original fractional ownership of the entire parcel 14 divided by the total original fractional ownership of all cotenants 15 that paid the entire price for the remaining interest. The court shall 16 issue promptly an order reallocating all of the cotenants’ interests, 17 disburse the amounts held by it to the persons entitled to them, and 18 promptly refund any excess payment held by the court. 19 (G) Not later than forty days after the court sends notice to the 20 parties pursuant to subsection (A), any cotenant entitled to buy an 21 interest under this section may request the court to authorize the 22 sale as part of the pending action of the interests of cotenants 23 named as defendants and served with the complaint but that did 24 not appear in the action. 25 (H) If the court receives a timely request under subsection (G), 26 the court, after hearing, may deny the request or authorize the 27 requested additional sale on such terms as the court determines are 28 fair and reasonable, subject to the following limitations: 29 (1) a sale authorized under this subsection may occur only 30 after the purchase prices for all interests subject to sale under 31 subsections (A) through (F) have been paid into court and those 32 interests have been reallocated among the cotenants as provided in 33 those subsections; and 34 (2) the purchase price for the interest of a nonappearing 35 cotenant is based on the court’s determination of value under 36 Section 1561360. 37 38 Section 1561380. (A) If all the interests of all cotenants that 39 requested partition by sale are not purchased by other cotenants 40 pursuant to Section 1561370, or if after conclusion of the buyout 41 under Section 1561370, a cotenant remains that has requested 42 partition in kind, the court shall order partition in kind unless the 43 court, after consideration of the factors listed in Section 1561390,

[1239] 7 1 finds that partition in kind will result in manifest prejudice to the 2 cotenants as a group. In considering whether to order partition in 3 kind, the court shall approve a request by two or more parties to 4 have their individual interests aggregated. 5 (B) If the court does not order partition in kind under 6 subsection (A), the court shall order partition by sale pursuant to 7 Section 1561400 or, if no cotenant requested partition by sale, the 8 court shall dismiss the action. 9 (C) If the court orders partition in kind pursuant to subsection 10 (A), the court may require that one or more cotenants pay one or 11 more other cotenants amounts so that the payments, taken together 12 with the value of the inkind distributions to the cotenants, will 13 make the partition in kind just and proportionate in value to the 14 fractional interests held. 15 (D) If the court orders partition in kind, the court shall allocate 16 to the cotenants that are unknown, unlocatable, or the subject of a 17 default judgment, if their interests were not bought out pursuant to 18 Section 1561370, a part of the property representing the combined 19 interests of these cotenants as determined by the court and this part 20 of the property must remain undivided. 21 22 Section 1561390. (A) In determining under Section 23 1561380(A) whether partition in kind would result in manifest 24 prejudice to the cotenants as a group, the court shall consider the 25 following: 26 (1) whether the heirs property practicably can be divided 27 among the cotenants; 28 (2) whether partition in kind would apportion the property in 29 such a way that the aggregate fair market value of the parcels 30 resulting from the division would be materially less than the value 31 of the property if it were sold as a whole, taking into account the 32 condition under which a courtordered sale likely would occur; 33 (3) evidence of the collective duration of ownership or 34 possession of the property by a cotenant and one or more 35 predecessors in title or predecessors in possession to the cotenant 36 who are or were relatives of the cotenant or each other; 37 (4) a cotenant’s sentimental attachment to the property, 38 including any attachment arising because the property has 39 ancestral or other unique or special value to the cotenant; 40 (5) the lawful use being made of the property by a cotenant 41 and the degree to which the cotenant would be harmed if the 42 cotenant could not continue the same use of the property;

[1239] 8 1 (6) the degree to which the cotenants have contributed their 2 pro rata share of the property taxes, insurance, and other expenses 3 associated with maintaining ownership of the property or have 4 contributed to the physical improvement, maintenance, or upkeep 5 of the property; and 6 (7) any other relevant factor. 7 (B) The court may not consider any one factor in subsection 8 (A) to be dispositive without weighing the totality of all relevant 9 factors and circumstances. 10 11 Section 1561400. (A) If the court orders a sale of heirs 12 property, the sale must be an openmarket sale unless the court 13 finds that a sale by sealed bids or an auction would be more 14 economically advantageous and in the best interest of the cotenants 15 as a group. 16 (B) If the court orders an openmarket sale and the parties, not 17 later than ten days after the entry of the order, agree on a real estate 18 broker licensed in this state to offer the property for sale, the court 19 shall appoint the broker and establish a reasonable commission. If 20 the parties do not agree on a broker, the court shall appoint a 21 disinterested real estate broker licensed in this State to offer the 22 property for sale and shall establish a reasonable commission. The 23 broker shall offer the property for sale in a commercially 24 reasonable manner at a price no lower than the determination of 25 value and on the terms and conditions established by the court. 26 (C) If the broker appointed under subsection (B) obtains within 27 a reasonable time an offer to purchase the property for at least the 28 determination of value: 29 (1) the broker shall comply with the reporting requirements 30 in Section 1561410; and 31 (2) the sale may be completed in accordance with state law 32 other than this article. 33 (D) If the broker appointed under subsection (B) does not 34 obtain within a reasonable time an offer to purchase the property 35 for at least the determination of value, the court, after hearing, 36 may: 37 (1) approve the highest outstanding offer, if any; 38 (2) redetermine the value of the property and order that the 39 property continue to be offered for an additional time; or 40 (3) order that the property be sold by sealed bids or at an 41 auction.

[1239] 9 1 (E) If the court orders a sale by sealed bids or an auction, the 2 court shall set terms and conditions of the sale. If the court orders 3 an auction, the auction must be conducted pursuant to Article 1. 4 (F) If a purchaser is entitled to a share of the proceeds of the 5 sale, the purchaser is entitled to a credit against the price in an 6 amount equal to the purchaser’s share of the proceeds. 7 8 Section 1561410. (A) Unless required to do so within a 9 shorter time by Article 1, a broker appointed under Section 10 1561400 to offer heirs property for openmarket sale shall file a 11 report with the court not later than seven days after receiving an 12 offer to purchase the property for at least the value determined 13 under Section 1561360 or 1561400. 14 (B) The report required by subsection (A) must contain the 15 following information: 16 (1) a description of the property to be sold to each buyer; 17 (2) the name of each buyer; 18 (3) the proposed purchase price; 19 (4) the terms and conditions of the proposed sale, including 20 the terms of any owner financing; 21 (5) the amounts to be paid to lienholders; 22 (6) a statement of contractual or other arrangements or 23 conditions of the broker’s commission; and 24 (7) other material facts relevant to the sale. 25 26 Section 1561420. In applying and construing this uniform act, 27 consideration must be given to the need to promote uniformity of 28 the law with respect to its subject matter among states that enact it. 29 30 Section 1561430. This article modifies, limits, and supersedes 31 the Electronic Signatures in Global and National Commerce Act, 32 15 U.S.C. Section 7001 et seq., but does not modify, limit, or 33 supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or 34 authorize electronic delivery of any of the notices described in 35 Section 103(b) of that act, 15 U.S.C. Section 7003(b).” 36 37 SECTION 2. Sections 156110 through 1561110 are designated as 38 Article 1, Chapter 61, Title 15 to be entitled “General Provisions”. 39 40 SECTION 3. This act takes effect upon approval by the 41 Governor. 42 XX 43

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