Relating to the partition or voluntary sale of real property owned by certain cotenants; amending the Uniform Partition of Heirs' Property Act.

89(R) HB 4011 - Introduced version - Bill Text

By: Darby

H.B. No. 4011

A BILL TO BE ENTITLED

AN ACT

relating to the partition or voluntary sale of real property owned

by certain cotenants; amending the Uniform Partition of Heirs'

Property Act.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. relating to the partition or voluntary sale of real

property owned by certain cotenants; amending the Uniform Partition

of Heirs' Property Act.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 23, Property Code, is amended by adding

Sections 23.0014, 23,0015, 23.0016, 23.0017, 23.0018, 23.0019 and

23.0025 to read as follows:

Sec.

23.0014.

DEFINITIONS. In this chapter, "heir

cotenant," "heirs' property," "non-heir cotenant" and "relative"

have the meanings assigned by Section 23A.002.

Sec.

23.0015.

REQUIREMENTS OF PETITION. (a) A petition to

partition property must:

(1)

meet the requirements in the Texas Rules of Civil

Procedure;

(2)

include a statement certifying whether the

property is heirs' property;

(3)

include the date that the plaintiff acquired their

interest in the property; and

(4)

include the plaintiff's percentage interest in the

property.

(b)

If a non-heir cotenant brings a partition action for

heirs' property after December 31, 2025, and the non-heir cotenant

acquired their interest in said property after December 31, 2025,

the petition must also include:

(1)

a statement certifying whether the right of first

refusal and notice of sale requirements in Section 5.254 have been

met;

(2)

the steps taken to exercise the due diligence

required under Section 5.254; and

(3)

the full name of the persons who received the

notice required under Section 5.254.

Sec.

23.0016.

CITATION; NOTICE OF HEIR'S BILL OF RIGHTS;

FORM. (a) Citation of an action to partition real property must be

served by personal service or certified mail with return receipt

requested on each of the following persons:

(1)

each joint owner of the property who is 16 years of

age or older;

(2)

the parent, managing conservator, or guardian of

each joint owner who is younger than 16 years of age;

(3)

each person who has paid any part of the property

taxes on the property in any of the five years prior to the filing of

the suit; and

(4) each person residing on the property.

(b)

The plaintiff or plaintiff's attorney or agent must

exercise due diligence to identify the name and residence of each

person listed in Subsection (a) and notify the clerk of the court of

the identified names and residences;

(c)

The citation is not required to be served on a person

listed in Subsection (a) if:

(1)

the person entered a court appearance in the

action;

(2)

the person is 16 years of age or older and waived

citation; or

(3)

the person is younger than 16 years of age and the

party's parent, managing conservator, guardian, attorney ad litem,

or guardian ad litem waived citation.

(d)

If the name or residence of a person listed in

Subsection (a) cannot be ascertained through the exercise of due

diligence, the service of the citation shall be made by publication

in accordance with the Texas Rules of Civil Procedures.

(e)

The citation must include a notice of heir's property

rights utilizing the standardized form created by the Office of

Court Administration under Section 72.040, Government Code.

Sec.

23.0017.

AFFIDAVIT. (a) A plaintiff who files an

action to partition real property shall file with the court, no

later than 20 days after the service of citation in the action is

completed:

(1)

a copy of any citation required by this chapter and

the proof of delivery of service of the citation; and

(2)

an affidavit sworn to by the plaintiff or a

certificate signed by the plaintiff's attorney stating:

(A)

that the citation was served as required by

this chapter;

(B)

the name and address of each person to whom

the citation was served, if the person's name and address are not

shown on the proof of delivery; and

(C) if service of citation is waived.

(b)

If the name or location of a person required to be served

the citation under Section 23.0016 has not been ascertained:

(1)

the affidavit must confirm that due diligence was

taken to ascertain the person's name and residence and contain a

statement of the actions taken to identify the name and residence of

the person; and

(2)

the court shall inquire into the sufficiency of

the diligence taken to identify the person's name and residence and

require any corrective actions needed to comply with this section.

Sec.

23.0018.

ATTORNEY AD LITEM. (a) The court shall

appoint an attorney ad litem in a partition action to represent the

interests of any joint owners whose name or location is unknown;

(b)

The court shall appoint an attorney ad litem in a

partition action brought by a non-heir cotenant involving heirs'

property to determine if there are any heir cotenants of the

property who have not been identified and to locate any known heir

cotenants who have not been served with the citation. Pursuant to

this subsection:

(1)

the attorney ad litem shall conduct a due

diligence investigation to locate known heir cotenants and identify

and locate potential unknown heir cotenants, including, but not

limited to, reviewing deed records, contacting known family

members, and utilizing other reasonable means;

(2)

the court shall dismiss the attorney ad litem upon

a finding that the attorney ad litem completed a due diligence

search for the name and location of all heir cotenants; and

(3)

The fees for the attorney ad litem appointed under

this subsection shall be paid for by the non-heir cotenant.

Sec.

23.0019.

NOTICE OF ACTION BY POSTING; TIME FOR FIRST

HEARING. (a) Not later than 10 days after bringing an action to

partition property, the plaintiff shall post, and maintain while

the action is pending, a conspicuous sign on the property that is

the subject of the action.

(b) The sign must:

(1)

be posted in a conspicuous place on the property

that is reasonably accessible and that the public is most likely to

observe and, if the property abuts a public thoroughfare, in a

location that is easily visible from the thoroughfare;

(2)

be made of a weatherproof material that is not

likely to disintegrate or decompose;

(3) have dimensions of at least four feet by four feet;

(4)

state in conspicuous language that the partition

action has commenced and identify the name and address of the court

and the common designation by which the property is known.

(b)

The court may require the plaintiff to publish on the

sign the name of the plaintiff and the known defendants.

(c)

The plaintiff must file with the court proof of posting

the sign in compliance with this section not later than the 10th day

after the date of posting.

(d)

The court may not hold the first hearing in the action

earlier than the 60th day after the date on which the plaintiff

provides proof the sign is posted as required by this section.

Sec.

23.0025.

DETERMINATION OF HEIRS' PROPERTY;

APPLICABILITY; RELATION TO OTHER LAW. In an action to partition

real property, after service of the citation is completed in

compliance with this chapter, the court shall hold a preliminary

hearing to determine whether the property is heirs' property under

Chapter 23A. If the court determines that the property is heirs'

property, the provisions of Chapter 23A apply unless all the

cotenants otherwise agree in a written record.

SECTION 2. Section 23A.002, Property Code, is amended by

adding Subdivisions (4-a) and (5-a) and amending Subdivision (5) to

read as follows:

(4-a) "Heir cotenant" means an individual who:

(A)

acquired a tenancy in common interest in real

property from a relative by will, intestacy, or transfer on death

deed; or

(B)

acquired a tenancy in common interest in real

property from a relative who previously acquired the interest from

a relative by will, intestacy, or transfer on death deed.

(5) "Heirs' property" means real property held in

tenancy in common that 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 that 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:

(i) 20 percent or more of the interests are

held by cotenants who are relatives;

(ii) 20 percent or more of the interests are

held by an individual who acquired title from a relative, whether

living or deceased; [
or
]

(iii) 20 percent or more of the cotenants

are relatives
; or

(iv)

any heir cotenant resides on the

property
.

(5-a)

"Non-heir cotenant" means an owner of heirs'

property who is not an heir cotenant.

SECTION 3. The heading of Section 23A.003, Property Code,

is amended to read as follows:

Sec. 23A.003. [
APPLICABILITY;
] RELATION TO OTHER LAW.

SECTION 4. Section 23A.003(a), Property Code, is repealed.

SECTION 5. Section 23A.004, Property Code, is repealed.

SECTION 6. Chapter 23A, Property Code, is amended by adding

Section 23A.0041 to read as follows:

Sec.

23A.0041.

SETTLEMENT CONFERENCE. (a) If the court in

a partition action determines that the property is heirs' property,

a party may file a written request that the court hold a conference

for the parties to engage in settlement discussions with respect to

the parties' interests in the property.

(b)

On the filing of a request for a settlement conference

under this section the court shall:

(1)

order the parties to participate in a settlement

conference under this section; and

(2)

send notice to the parties of the time and place at

which the settlement conference will be held, the purpose of the

settlement conference, and the requirements of this section.

(c)

The Office of Court Administration of the Texas Judicial

System shall prescribe a form to be used to provide the notice

required by Subsection (b). Notice provided under Subsection (b)

must be in the form prescribed.

(d)

The plaintiff, not later than the 20th day after the

date the court sends notice under Subsection (b)(2), shall post a

copy of that notice on the sign required under Section 23A.0041.

(e) The court:

(1)

shall hold a settlement conference under this

section:

(A)

not later than the 60th day after the date the

request for the settlement conference is filed; or

(B) on a date agreed to by all parties; and

(2)

may adjourn or reconvene the settlement conference

as necessary during the pendency of the partition action.

(f)

Each party to the action shall appear at the settlement

conference in person, by videoconference if allowed by the court,

or by counsel. Each party's representative at the settlement

conference must be authorized to dispose of any portion of the case.

If a defendant appears pro se, the court shall advise the defendant

of the nature of the action and the defendant's rights and

responsibilities as a defendant.

(g)

If at the time the court first holds a settlement

conference under this section a defendant has not filed an answer to

or motion to dismiss the partition action, the court shall:

(1)

advise the defendant of the requirement to answer

the petition and that the ability to contest the partition action

and assert defenses may be lost if an answer is not filed;

(2)

explain what is required to answer the petition in

court;

(3)

provide information about available resources for

legal assistance; and

(4)

set a deadline for any cotenant to request

partition by sale.

(h)

The court shall presume that a defendant who appears at

a settlement conference but who did not timely file an answer in the

partition action has a reasonable excuse for the default and shall

allow the defendant to serve and file an answer not later than the

30th day after the date of the defendant's initial appearance at the

settlement conference, without deeming the defendant to have waived

any substantive defenses to the partition action. On service and

filing of the defendant's answer in accordance with this

subsection, the court shall vacate any default judgment that has

issued against the defendant in the action.

(i)

Each party to the action shall negotiate in good faith

to reach a mutually agreeable resolution regarding the property,

which may include:

(1) a tenancy in common agreement;

(2)

a cotenant buyout and the allocation, mechanics,

and financing for a cotenant buyout under Section 23A.007;

(3)

partition in kind as provided under Sections

23A.008 and 23A.009;

(4)

an open-market sale as provided under Section

23A.010; or

(5)

any other agreement or loss mitigation that is

fair and reasonable in consideration of the factors listed in

Section 23A.009(a).

(j)

If the parties do not reach a mutually agreeable

resolution, the court may refer the case to an alternative dispute

resolution procedure under Chapter 154, Civil Practice and Remedies

Code.

(k)

The court may hold in abeyance any motion by any party to

a partition action while a settlement conference process under this

section is ongoing, except for a motion concerning:

(1)

a determination of the percentage interest, if

any, owned by an alleged cotenant, if the interest is in dispute; or

(2)

compliance with this section, including an

application to extend any deadline under this section in the

interest of justice.

SECTION 7. Section 23A.006, Property Code, is amended by

amending Subsections (a) and (b) and adding Subsection (d-1) to

read as follows:

(a) Except as provided by Subsection (b) [
or (c)
], if the

court determines that the property that is the subject of a

partition action is heirs' property, the court shall determine the

fair market value of the property by ordering an appraisal under

Subsection (d).

(b) If all cotenants have agreed
in writing
to the value of

the property or to another method of valuation, the court shall

adopt that value or the value produced by the agreed method of

valuation.

(d-1)

An appraiser appointed under Subsection (d) must be

certified as a certified general appraiser under Chapter 1103,

Occupations Code, unless the parties agree otherwise in writing or

the court requires an appraiser with higher or additional

certifications, licensing, or qualifications. Notwithstanding the

foregoing, if the court determines that a certified general

appraiser is unavailable to appraise the property within a

ninety-day time period, the court may appoint an appraiser licensed

as a certified residential appraiser to perform the appraisal

provided that the appraiser's license is adequate for the type of

property being appraised.

SECTION 8. Section 23A.007, Property Code, is amended by

amending Subsection (e) to read as follows:

(e) If the court sends notice to the parties under

Subsection (d)(1) or (2), the court shall set a date, not earlier

than the [
60th
]
90th
day after the date notice was sent, by which an

electing cotenant must pay the cotenant's apportioned price into

the court. After that date:

(1) if all electing cotenants timely pay their

apportioned price into court, the court shall:

(A) issue an order reallocating all the interests

of the cotenants; and

(B) disburse the amounts held by the court to the

persons entitled to them;

(2) if no electing cotenant timely pays its

apportioned price, the court shall resolve the partition action

under Section
23A.008
(a) or (b) as if the interests of the cotenants

that requested partition by sale were not purchased; or

(3) if one or more but not all of the electing

cotenants fail to pay their apportioned price on time, the court

shall give notice to the electing cotenants that paid their

apportioned price of the interest remaining and the price for all

that interest.

SECTION 9. Sections 23A.010(d) and (e), Property Code, are

amended to read as follows:

(d) If the broker appointed under Subsection (b) does not

obtain within a reasonable time an offer to purchase the property

for at least the determination of value, the court, after hearing,

may:

(1) approve the highest outstanding offer, if any;

(2) redetermine the value of the property and order

that the property continue to be offered for an additional time; or

(3)
appoint a substitute broker under Subsection (b)

and
order that the property
continue to be offered for sale
[
be sold

by sealed bids or at an auction
].

(e) If
a substitute broker appointed under Subsection

(d)(3) does not obtain within a reasonable time a reasonable offer

to purchase the property,
the court
may order the
[
orders a
] sale
of

the property
by sealed bids or at an auction
. The
[
, the
] court

shall set terms and conditions of the sale. If the court orders an

auction, the auction must be conducted in the manner provided by law

for a sale made under execution.

SECTION

10
.

Chapter 23A, Property Code, is amended by

adding Section 23A.0115 to read as follows

Sec.

23A.0115.

PROHIBITION ON INITIATION OF PARTITION. (a)

No partition action related to an heirs' property may be initiated

by a non-heir cotenant holding less than 50 percent of the interest

in said property for a period of ten years from the date the

non-heir cotenant first acquired a co-ownership interest in said

property.

(b)

This section does not apply to an interest in heirs'

property acquired by a non-heir cotenant prior to January 1, 2026.

SECTION 11. Chapter 5, Property Code, is amended by adding

Subchapter H to read as follows:

SUBCHAPTER H. NON-PARTITION SALE OF HEIR COTENANT'S INTEREST IN

HEIRS' PROPERTY

Sec.

5.251.

DEFINITIONS. In this subchapter: "heir

cotenant," heirs' property," "non-heir cotenant," and "relative"

have the meanings assigned by Section 23A.002.

Sec.

5.252.

APPLICABILITY OF SUBCHAPTER. This subchapter

applies to the sale of an heir cotenant's interest in heirs'

property if:

(1)
an heir cotenant is in possession of the property; and

(2)
the sale does not result from an action to partition the

property under Chapter 23 or 23A.

Sec.

5.253.

RIGHT OF FIRST REFUSAL AND NOTICE OF SALE. (a)

If a cotenant decides to sell all or part of their interest in

heirs' property to a non-heir cotenant who is not a relative of an

heir cotenant, any heir cotenants who reside on the property have a

right of first refusal to purchase the interest in accordance with

this subchapter.

(b)

Before selling an interest in heirs' property covered by

this subchapter, the selling cotenant must have a contract with the

third-party purchaser that sets forth the terms of the sale and is

subject to the right of first refusal in this subchapter.

(c)

Any heir cotenants who reside on the property are

entitled to buy the interest for the same price in the contract for

a period of 90 days from the date the notice under Section 5.254 is

sent.

(d)

If multiple heir cotenants who reside on the property

offer to purchase the interest, priority is given to heir cotenants

who:

(1)

have occupied the property as their primary

residence for at least the past five years; and

(2)

paid all or part of the ad valorem taxes imposed on

the property for at least three of the five most recent tax years.

(e)

If a non-heir cotenant who acquired an interest in

heirs' property after December 31, 2025, brings a partition action

under Chapter 23 and the acquisition was not made in compliance with

the right of first refusal requirements in this section, the heir

cotenants who reside on the property have a right to buy the

non-heir cotenant's interest in the property for the lesser of (1)

the fair market value of the non-heir cotenant's interest in the

property and (2) the price paid by the non-heir cotenant to acquire

the interests in the property.

Sec.

5.254.

NOTICE TO HEIR COTENANTS. (a) Within 30 days

of a cotenant entering into a contract for the sale of heirs'

property to a non-heir cotenant, the selling cotenant shall give

notice of the proposed sale to all persons in possession of the

property and all known heir cotenants of the property. The notice

shall include the identity of the proposed purchaser, the sales

price of the proposed transaction, and a copy of the contract.

(b)

Notice shall be sent to the heir cotenants' last known

address by certified mail with return receipt requested.

(c)

The selling cotenant has a duty to exercise due

diligence to identify the names and locations of all the heir

cotenants and provide the notice required under this subchapter.

SECTION 12. Subchapter C, Chapter 72, Government Code, is

amended by adding Section 72.040 to read as follows:

Sec.

72.040

HEIR'S BILL OF RIGHTS FORM. (a) The Office of

Court Administration of the Texas Judicial System shall promulgate

an heir's bill of rights form required to be included in a citation

for a partition action under Chapter 23, Property Code.

(b)

The standardized form developed under Subsection (a)

must:

(1)

be written in English that can be easily

understood by the general public and include a Spanish translation;

(2)

provide information for accessing free or low-cost

legal assistance;

(3)

inform cotenant heirs of their rights and duties

under Chapters 23 and 23A, Property Code, including their buyout

rights and right to request a settlement conference; and

(4)

include such other information as the office

determines is appropriate to adequately inform heirs of their

rights and duties under Chapters 23 and 23A, Property Code.

SECTION 13. (a) Chapters 23 and 23A, Property Code, as

amended by this Act, apply only to a partition action commenced on

or after the effective date of this Act. A partition action

commenced before the effective date of this Act is governed by the

law as it existed immediately before the effective date of this Act,

and that law is continued in effect for that purpose.

(b) As soon as practicable after the effective date of this

Act, but not later than December 31, 2025, the Office of Court

Administration of the Texas Judicial System shall create and make

available on the office's Internet Website the forms required by

Section 72.040, Government Code, and Section 23A.0041, Property

Code, as added by this Act.

(c) Subchapter H, Chapter 5, Property Code, as added by this

Act, applies only to the sale of an interest in heirs' property the

closing date of which is on or after January 1, 2026. The sale of an

interest in heirs' property the closing date of which is before

January 1, 2026, is governed by the law as it existed immediately

before the effective date of this Act, and that law is continued in

effect for that purpose.

SECTION 14. This Act takes effect September 1, 2025.