Danny, Thomas and John T. inherited equal shares of 250 acres of property in Somervell County. of which 50 acres are ripe for development. The family farmhouse is located in another section, while the rest is pasture. Danny wants to retain all the property in the family. Thomas wants to sell the 50 acres, divide the money and split the rest of the acreage three ways. John wants to sell all of the property.
Danny, Thomas and John own the property as tenants-in-common. In Texas, any co-tenant has a right to bring an action to partition the common property, either in kind or by judicial sale. However, a partition suit involves a costly court action which can involve complications.
Property Code § 23A.101, titled the Uniform Partition of Heirs’ Property Act, effective September, 2017, authorizes a less costly procedure under which the fair market value of the property is determined, co-tenants are given the option to buy out other cotenants and, if the buyout right is not exercised, the property is either partitioned in kind or sold in open market.
One or more of the heirs files with the court under the act, either for partition in kind or by sale, and gives notice to any co-tenant not an applicant. If co-tenants cannot agree as to the value of the property or some other method of determining its value, the court will determine its fair market value (FMV). If evidence of value is not sufficient, the court will appoint a real estate appraiser.
Following a hearing to determine the FMV, if the partition is for sale, any co-tenant except the one(s) requesting partition by sale, has the option to buy out the others. If more than one of the co-tenants request to buy out the other(s), the court allocates that right according to the percentage interest in the property.
If all interests of co-tenants requesting partition by sale are not purchased or one co-tenant requests partition in kind, the court will partition in kind unless the court finds that partitioning would substantially prejudice the group. Prejudice is determined by assessing: (1) whether the property can practically be divided; (2) whether aggregate value of selling parcels would be less than if sold as a whole; (3) the duration of ownership or possession of co-tenant(s); (4) the co-tenant’s sentimental attachment to property; (5) the lawful use and harm to co-tenant if no longer able to use; (6) the degree to which co-tenants contributed to taxes, insurance and other expenses; and (7) any other relevant factor.
Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth. She lives in beautiful Somervell County, near Chalk Mountain.