Big News! On July 8, 2025, New Jersey enacted the Uniform Partition of Heirs Property Act (“UPHP”). You are probably thinking, “What is a partition, and why would the UPHP impact me?” A partition is a court action that is utilized to split, or “partition” property between parties that cannot agree on ownership, management, or sale of said property. This action generally results in the sale of the property and an allocation of the proceeds.
Why the UPHP Matters
The need for a partition of property obtained in a will or distribution of an estate is a more common occurrence than you might think, as personal circumstances and family dynamics can create differing opinions concerning ownership, management, and sale of estate property. Moreover, with the United States’ aging population, it is even more important to understand the UPHP, which preempts other statutes governing the partition of real estate for the partition of property which a court has deemed “heirs property.”
The UHPH
As stated above, for a partition under the UHPH, the property must be deemed “heirs property,” which is real property held by tenants in common, wherein: there is no agreement binding all cotenants to a partition of the property; one or more cotenants acquired title from a relative, and either:
- 20% or more of the interest is held by cotenants who are relatives,
- 20% or more of the interest is held by an individual who acquired same from a relative, or
- 20% or more of the cotenants are relatives.
Importantly, the court will appoint a disinterested and impartial special master and/or commissioner to partition the property. The special master will direct a disinterested real estate appraiser to appraise the property. Said value is subject to party objection within 30 days of the appraisal, which will initiate an appraisal hearing to determine the property’s value.
A cotenant may also request partition by sale via written notice to the parties and special master informing all cotenants that non-requesting cotenants may buy the interest of those requesting the partition within 30 days of the determination of value. The non-requesting cotenants then have 45 days to elect to buy the interest, and payment must be provided to the Superior Court Trust Fund within 60 days of electing to purchase. Additionally, within 30 days of notice of the request for partition by sale, any cotenant entitled to purchase an interest may request the sale of the interests of non-appearing cotenants named as defendants and served with the complaint. The sale must occur after all interests subject to the notice of sale have been paid and the remaining interests have been reallocated.
If one cotenant elects to buy the interest, which is based on the cotenant’s fractional ownership of the property, they shall notify the parties and special master, in writing. Critically, when more than one cotenant elects to purchase, the purchasing cotenants’ interest shall be based on each of their fractional ownership, divided by the total ownership of all purchasing cotenants.
If all cotenants pay, the interests shall be reallocated and disbursements made. Conversely, if no cotenant pays, the partition will continue as if no sale had occurred. However, if at least one purchasing cotenant fails to pay their apportioned interest, the parties may file a motion to determine the remaining interests and prices. Moreover, any cotenant that paid may elect to purchase the remaining interest within 45 days of said determination.
Sale of Heirs Property
Under the UPHP, the sale of the heirs property shall be an open market sale unless the court finds that a sale by sealed bids or auction is more economically advantageous. To facilitate the sale, the court will appoint a real estate broker unless the parties agree on a broker within 10 days of an order for sale. The broker shall file a report with the court within seven days of receiving an offer to purchase at or above the determined value that will contain:
- a description of the property,
- the name of each buyer,
- the proposed purchase price,
- the terms and conditions of the sale,
- any payments to lienholders,
- the conditions of the broker’s commission, and
- any other relevant and material facts.
If no bid is received at or above the determined value, the court, after a hearing, may:
- approve the highest outstanding offer,
- re-determine the property’s value and offer same at the new value, or
- order a sale by sealed bids or an auction with specific conditions.
Any buyer entitled to a share of the proceeds will get a credit in that amount. Notwithstanding, the special master shall recommend to the court a partition in kind if all the interests of the cotenants that requested partition by sale are not purchased, or a cotenant remains who has requested partition in kind. The court may also fashion the payments so that the partition in kind is proportionate in value to the fractional interests and allows cotenants to aggregate their interests. Additionally, the court shall allocate a value representing all interests of unknown, unlocatable, or defaulted cotenants.
A partition in kind will occur unless the court determines that it will greatly prejudice the cotenants as a group. In determining prejudice, the court will analyze:
- whether the property can be practicably divided,
- whether a division of the property results in a fair market value materially less than the value of the property sold as a whole,
- the duration of possession or ownership by a cotenant and one or more predecessors in title or possession who are/were relatives of cotenant or each other,
- the sentimental attachment to the property,
- the lawful use of the property and the harm if said use is extinguished,
- the degree of cotenant contribution to their pro rata share of property taxes, insurance, and expenses, and
- any other relevant factors.
Finally, if the plaintiff seeks an order of notice by publication, the plaintiff must post and maintain a conspicuous notice on the heirs property while the action is pending, which states that an action has commenced and identifies the names and address of the court and the common designation of the property.
For a more complete overview, the statute can be found online (https://www.njleg.state.nj.us/bill-search/2024/S1400/bill-text?f=S1500&n=1400_S2).
