What is a Partition for Allotment in Virginia?

Virginia recently passed several new laws that affect guardianships, conservatorships, trusts, and estates. These new laws went into effect on July 1, 2020. One of these changes involves partition for allotment. Below, we will discuss what a partition for allotment is and how a new law changes the practice of partition for allotment. 

When the owner of a piece of property passes away, the property ownership passes down to his or her heirs. When one of the heirs passes away, their portion of the property passes to their own heirs, not their co-owners. After several generations have passed away, it is possible that one piece of property could become owned by dozens or even hundreds of heirs. In some cases, a non-relative may have purchased an ownership interest from one of the heirs. Managing a property with so many partial owners can be incredibly challenging.

 

A Partition of Allotment Decreases the Number of Property Owners

A partition by allotment allows the court to award the full ownership of the property to one owner or a subset of owners. The court will order the owner to pay the person or people who lose their ownership interest in exchange. Any person who has an ownership interest in the property, no matter how small, can bring a legal action called a partition. The courts can decide to divide the property and grant each co-tenant part of it in proportion to their ownership share.

It is not possible for the court to fairly divide the property among different co-tenants in some cases. When this is the case, the court often requires the sale of the property to previous co-owners who can afford to pay for the whole property or to an unrelated third-party. After the sale of the home, the court will distribute the proceeds to everyone with an interest in the property proportionally.

 

Recent Changes to Virginia’s Partition for Allotment Law

Often, the partition for allotment action is fair, especially when only the heirs are involved in the case. However, partition for allotment actions can become unfair to economically disadvantaged family members whose only wealth could be their land ownership. After all, it only takes one co-tenant to sell their personal interest to a developer or real estate executor of everything to be compromised. The real estate developer could then force the court to engage in a partition sale of the whole property. 

Sometimes, these partition sales result in a sales price that is far below the home’s market value. A recent Washington Post article describes how two different families lost a significant amount of wealth due to a partition for allotment action. African American families are often disproportionately disadvantaged by partitions for allotment. Many of them struggle to hold on to their property after an outside investor obtains an ownership interest.

 

The Uniform Partition of Heirs Property Act

To address the inequality that can occur due to a partition sale, many states, including Virginia, have adopted the Uniform Partition of Heirs Property Act.  This law governs all partition actions filed after July 1st, 2020. Under the law, any co-owner of the property who does not want to see the property sold can buy out their co-owners’ ownership share. In other words, if you own a piece of a property and you do not want to see that property sold, you can petition the court to allow you to buy out your co-owner’s shares. 

This law allows you to prevent the court from selling the entire property and distributing the proceeds equally among you and your co-owners. It also gives the court the ability to appoint a third-party appraiser to assign a fair market value to the property. However, if all of you and your co-owners can agree on the property’s value, the court will not need to assign a third-party appraiser.

If multiple co-owners want to purchase the entire property, the court must consider various factors when deciding who should get to sell the property. According to the new law, the court can only order a forced sale when it is not equitable or practical for the property to be sold to co-tenants or allotted to co-tenants. The court must consider the following factors when making this decision:

• How long each person or their immediate relatives have owned their share of the property
• Whether there is any sentimental value attached to the property
• Which co-owner has been paying the taxes, maintenance expenses, and insurance

The purpose of these new laws is to allow family members to keep their family property for generations without the threat of selling it off and distributing the proceeds. At the same time, these changes will affect how partition actions typically proceed in Virginia. If you are a joint property owner and do not want your property to be sold, this new law gives you greater rights. 

If you can buy out the other co-owners, you can do so for a fair market price. It is important to speak to an experienced real estate lawyer about your case because you do not want to lose your right to purchase the property. An experienced real estate lawyer will help you file the petition with the appropriate court and ensure that you purchase the property for a fair price following Virginia law.

 

Contact a Partition for Allotment Lawyer Today

If you own ownership interest in a piece of real estate property, it is wise to discuss your case with an experienced real estate lawyer. Whether you are interested in selling the property, or you want to ensure that you protect the property and keep it in your family, we can help. Contact Fox & Moghul, Attorneys at Law, as soon as possible to schedule your free initial consultation.