If a person dies and leaves their house to more than one adult child, what happens if the children cannot agree on whether to sell or keep the property? In the past, if the children could not agree, the only viable solution was for a partition action to be filed forcing the sale of the property. But what if the property had been in the family for many years and one of the children wanted to keep it?
Effective in July, 2020, a new law went into effect in Florida which will address this situation. Part II of Chapter 64, Fla. Stat. contains the “Uniform Partition of Heirs Property Act.” This Act provides a mechanism whereby one or more heirs who inherit real property can essentially force the buy-out of the other heirs who want to sell. By doing so, this Act will allow family to keep real property “in the family.”
The Act only applies to partition actions filed after July 1, 2020. Further, it only applies to “heirs property” which is defined at Section 64.202 (6) Fla. Stat. as
…real property held in tenancy in common which satisfies all of the following requirements as of the filing of a partition action:
(a) There is no agreement in a record binding all the cotenants which governs the partition of the property;
(b) One or more of the cotenants acquired title from a relative, whether living or deceased; and
(c) Any of the following applies:
1. Twenty percent or more of the interests are held by cotenants who are relatives;
2. Twenty percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased; or
3. Twenty percent or more of the cotenants are relatives.
This definition of heirs property provides an important distinction on when the Act applies and when it does not. If a group of people who are not relatives jointly purchase a piece of property and after a period of time one owner wants “out,” this Act will not apply. The reason is that title was not acquired from a “relative” which the Act defines as “an ascendant, descendant, or collateral or an individual otherwise related to another individual by blood, marriage, adoption, or law of this state other than this part.”
After a partition action is filed, one of the first steps accomplished by the court will be to determine whether the property is heirs property. If it is, then the court will determine the property’s value either through an appraisal performed by a disinterested appraiser or by agreement of the parties.
Once the value of the property is determined, the Act contains provisions prescribing how one or more co-tenants can buy out the other co-tenants. The method is rather detailed and can be found in Section 64.207, Fla. Stat. entitled “Cotenant buyout.” In simplified terms, this section of the Act provides for the court to notify the interested co-tenants of their right to purchase the other co-tenant’s shares and there is then a detailed series of steps to accomplish the sale.
An example of how the Act may work and why it will be helpful is set forth as follows: Grandpa Jones died owning a farm in rural North Florida. The farm had actually been in the family for several generations. Grandpa Jones had three adult children, Tom, Davey, and Martha. Of the three, Davey and Martha wanted to sell the property and split the money. Tom, on the other hand, had fond memories from his childhood at the farm. Tom did not want the farm to be sold from the family. Prior to passage of the Act, Tom’s only remedy would have been to file a partition lawsuit and take his chances on what happened to the farm—most likely it would have been sold to a third party and therefore it would left the family. However, now that the Act is law in Florida, Tom will have a mechanism whereby the value of the property can be determined and Tom can then force Davey and Martha to sell to him. By implementing the provisions of the Act, Tom can keep the farm.
Keep in mind that this is a new Act in Florida so there is not much in the way of court interpretation on how the Act will actually work. Suffice it to say that Judges and attorneys alike are learning how this Act will be applied. If you inherit real property jointly with other heirs, you should consult with an experienced attorney about whether and how the Act might be beneficial to you.