By: West S.B. No. 600

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. 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.