Dividing the Deed: Pennsylvania Follows New Jersey Into Partition Law Reforms

Pennsylvania deed holders who die without a will leave their homes to be passed on in court. In some cases, by the time someone in the family line resorts to the court system, heirs have scattered near and far.

The heirs could lose land to corporations — land that belonged to the generations. New Jersey recently updated its heirship laws for real estate, and Pennsylvania is now doing the same.

Opportunists Zero In

Where there’s a will, there’s a relative, the saying goes. And when there’s no will? Then, the relatives may have no idea who can speak for the family property.

Some of these cases never appear in court. Deeds never get transferred. Opportunists zero in.

Clever investors might manage to convince a partial owner to sell their portion of the real estate. Then the investors use their newly acquired share of ownership to ask a court to force the sale of a property. They know they can then force a sale through the court system. Why? Courts adhere to the principle that no one should have to continue co-owning property who does not want to. For this reason, courts often grant requests for partition.

What is a partition action? It involves attempting to notify everyone with a stake in the deed that the property will be divided or sold, per one co-owner’s request. Say the co-owner that requests a partition is an investment company that bought an interest off an heir. Then, by the court’s order, that company can gain control of the deed, while any traceable heirs left as co-owners should get payments. There might be farmers on the land or people who live there without a clear claim to the deed. Some might suddenly receive bills for back taxes, even though they could never lay legal claim to the land or finance it.

When outside investors succeed in taking advantage of this legal process, what could have been a family asset is lost through a forced sale to corporate buyers.

Anyone with a stake in an unwanted partition sale should get legal help. Tenants in common are legally entitled to sell their shares. Once the court process starts, it’s difficult to stop.

Pennsylvania to Support Heir-Aware Partition Actions

Now, State Representatives Chris Rabb and Tim Bonner are lawmaking to help Pennsylvania heirs. Rabb and Bonner are working to enact Pennsylvania’s House Bill 1498. This is a matter of adopting the same model law New Jersey enacted in May. It’s called the Uniform Partition of Heirs Property Act. It has received multiple votes, drawing bipartisan support.

Rabb, a State Representative from Philadelphia, notes that generations are watching their inheritances get ripped away — because the heirs don’t all speak with one voice. Bonner, a Representative from western Pennsylvania, believes the courts need better guidance when distributing deeds to homesteads claimed by multiple heirs.

Picking up the baton in the Pennsylvania Senate is Senator Camera Bartolotta, who says:

I will soon introduce legislation to give heirs better protection to prevent forced sales of inherited property. This will be companion legislation to House Bill 1498, introduced by Rep. Chris Rabb…

An earlier version of this same effort happened here last year, but the Pennsylvania Senate never considered the bill. Now, with this rural Senator prepared to sponsor a companion bill, the stars have aligned in Pennsylvania.

How the New Law Will Help Heirs

Cases to divide and distribute heir-owned land should be more supportive, less time-consuming. The Uniform Partition of Heirs Property Act could help. It’s a popular model law for states looking to use to improve their current provisions. Many deed holders nationwide already live in places where it’s in force. Now, Pennsylvania is poised to adopt it too.

The Uniform Partition of Heirs Property Act:

• Emphasizes notice to all co-owners and allows time for the notified people to respond.
• Allows heirs to have a right of first refusal. They can then buy out other heirs.
• Gives an heir who wants to buy out the others 45 days to make the offer before a sale can be forced, and 60 further days to get a loan.
• Focuses on the human aspects of dividing commonly held land. For example: If the property must be sold, how would dividing its value impact everyone with a current claim or interest on the deed? How might the property’s sentimental, cultural or historic value inform the best decision?
• Applies heightened concern for any heir who might rely on the home as a place to live. Potential homelessness of any co-owner would be taken into account when a court decides whether to force a sale.

• Requires an accurate, independent appraisal.

• Avoids the sheriff’s auctions that draw discount seekers. Higher offers translate into lien payoffs, so heirs get more of the proceeds.
• Ensures that heirs’ land would only go to developers through a professional real estate broker. This leaves less room for exploitive investors to manipulate families.
• Lets any mortgage lenders participate in the hearing in order to exercise their rights to recover their funds. (Lenders with a stake in heirs’ property can always foreclose during the court process. Co-owners are jointly responsible for any tax liens and any debts to lenders that the court orders them to pay.)  

If a sale must be forced, a court can order one of two types of property partitions. One is the partition in kind — an actual dividing up of land, which creates multiple deeds out of one. In contrast, a partition by sale means a court-ordered sale of the entire property, with proceeds then divided among the known heirs. Distribution is a complicated process. To administer it, the court needs to order surveys and appraisals, and to run a thorough accounting of co-owners’ expenses related to the property.

Where the Heirs Are

Pennsylvania’s current focus on straightening out tangled titles helps the people who need generational wealth the most.

Most heirs’ property is connected with rural families, minority households, and residents generally struggling to stay afloat financially. This is why these homes’ titles missed probate in the first place. The new bill supports the goal of keeping the value of Pennsylvania property in families. If it’s successfully enacted, it will become effective 60 days later.