"Sell Inherited Real Property"

Sell Inherited Real Property?

Forced to Sell Inherited Real Property?

Consider the following: Mariya, age 93, died five years ago. At the time of her death, her biggest asset was her house in Brooklyn valued at well over one million ($1,000,000) dollars. Mariya had three daughters, Amy, Beth, and Claire. In her Will, she wrote that all of her assets were to pass to her children. Amy lives in the house. Beth and Claire have their own houses and want to sell and cash out. Amy is very concerned that she can be forced to sell inherited real property. 

What is a Partition Action?

Beth and Claire have the right to force Amy to sell inherited real property. If Amy will not agree to sell, Beth and Claire can seek a partition of the property where Amy may be forced to sell inherited real property. A partition is a legal proceeding among tenants in common or tenants by the entirety who own a property. It may result in actual partition or division of the property into separate parcels, each titled in the name of an individual co-tenant according to the co-tenants’ respective interests (“partition in kind”), or, alternatively where actual partition would be prejudicial to the co-tenants, by judicial sale of the entire property and division of the net proceeds among the co-tenants according to their respective interests (“partition by sale”). In this case, following Mariya’s death and following probate, the house belongs to Amy, Beth, and Claire, as tenants in common. Therefore, Beth and Claire, can ultimately seek to partition the property. 

How Does a Partition Action Work?

A partition action is typically filed in Supreme Court and is done by the filing of a summons and complaint. The summons and complaint may typically state that a sale is impossible and request judicial sale. The summons and complaint will usually also ask for some form of an accounting of expenses paid or rents collected on the property. The summons and complaint is then served on the other side. The other side is given time to answer and file counterclaims. The parties will typically get appraisals of the property and see if they can work out some form of arrangement to sell the property on the open market, rather than by a judicial auction. If the parties cannot work anything out, then the case will proceed to discovery and ultimately, to the appointment of a referee. The referee will also see if the parties can work something out. If the parties cannot, then the Court, after a “trial,” will Order a judicial sale of the property and have a referee compute how much each party gets as and for the net proceeds of sale. 

How can I Stop a Forced Sale of Inherited Real Property?

Once the wheels are in motion, there are few ways to stop a forced sale of inherited real property. If the forced sale of real property is occurring because of deed theft or exploitation, then the New York Uniform Partition Act (“NY UPHPA”), codified as RPAPL §993, offers some protections. If, however, this is a routine partition among co owners or siblings, then the best strategy is often to delay and work out a plan of relocation or buy-out. There can be creative buyout options. Usually most partition actions settle. It is in everybody’s best interest to have the partition action settle because otherwise the property will be sold at an auction, rather than with a broker on the open market. If the property is sold at an auction, then the owners will typically net less money than if the property was sold with a private broker on the open market. 

How Can You Prevent a Forced Sale of Inherited Real Property?

The first way to prevent the forced sale of inherited real property is to be very clear in your Will or your Trust about how you want the asset to be disposed of. If you know that one of your children is living in the property, then you may want your estate planning documents to specify that you want that child to be able to reside in the property after you die. If you are silent, then it will give your other beneficiaries the right to seek a judicial sale of the property. 

Another way is to dispose of your assets in a specific way. Rather than just leaving all to the kids equally, perhaps you may want to leave the house to one child and leave all the cash to the other two children. 

We can assist with estate planning and partition actions. 

For more information, please contact NYC Probate Litigation, Guardianship, NYC Probate and Estate Planning attorney Regina Kiperman:

Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com

Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005

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