A year ago Arizona adopted the Uniform Partition of Heirs Property Act. At Fleming & Curt, PLC, we explained the new law and what it might mean in a podcast episode on May 11, 2025.
As we explained in May, the problem has not been widely experienced in Arizona. At least not yet. But other states have seen lots of problems and abuses. This month we saw a New York appellate decision that laid out the concerns pretty neatly.
Gertrude Bennett’s story
In 1970, Gertrude Bennett and her husband Winston bought a property in the Laurelton neighborhood of Queens, NY. They lived there for only about four years before divorcing. But even after their divorce they continued to own the property jointly.
Ms. Bennett lived in the house with her children for another 46 years — until her death in 2016. By that time Winston Bennett had already died. He predeceased his ex-wife by about seven years.
Mr. Bennett had just one surviving child. His son was not Mrs. Bennett’s son, and by law Mr. Bennett’s son (also named Winston) owned 50% of the home.
When Mrs. Bennett died, her 50% interest passed to her two children. Now each of them owned a 25% interest. But since no probate proceedings had ever been initiated for either of the Bennetts, those interests were not settled by legal proceedings.
Purchase of fractional interests
In 2019 the younger Winston Bennett sold his 50% interest in the home to an investor, who promptly sold it to a limited liability company named Laurelton Estates, LLC. The LLC paid $70,000 for that half interest. They then purchased the 1/4 interest of one of Mrs. Bennett’s children for $66,000.
So now Laurelton Estates, LLC, owned 75% of the property, for which they had paid a total of $136,000. And what was the property worth? About $695,000. So the investment company brought an action to force a sale of the property so that it could collect its investment plus substantial profits.
Actually, their profits wouldn’t have been quite as impressive as that seems. Apparently, Mrs. Bennett (and her heirs) had failed to pay property taxes for a long time. There were almost $83,000 of unpaid taxes due. But still, the investment company’s $136,000 investment might yield a return of about $450,000. Not a bad return. Even better, in fact: the investment company argued that the heirs owed them 75% of the reasonable rental value of the property since at least 2020.
Enter the Uniform Partition of Heirs Property Act
New York adopted the Uniform Partition of Heirs Property Act in late 2019. The 25% owner (Mrs. Bennett’s daughter Diane Prince) argued that it was exactly the kind of property dilemma covered by the Act. She would lose her 25% interest, and her son (who still lived in the home) would be dispossessed.
The Uniform Partition of Heirs Property Act requires appointment of a court official to report on the relative merits of the claimants, the value of the property, and how the problems might be resolved. It also requires an arbitration proceeding to get the parties to work out their differences.
The investment company offered to sell its 75% interest to Ms. Prince for $600,000. Ms. Prince countered that the considerations set out in the Uniform Partition of Heirs Property Act favored her. The investment company paid a fraction of what it now claimed, and was not related to any of the involved family members. She ultimately offered to pay $300,000 for the investment company’s interest. In response, it lowered its demand to $500,000. Or, they said, they’d buy out Ms. Prince’s interest for $125,000.
The trial court ultimately determined that the Uniform Partition of Heirs Property Act applied, and that the Laurelton Estates, LLC, had not negotiated in good faith. Accordingly, it dismissed the partition action — leaving the parties in the same position as they had been.
Is this how the Act is supposed to work?
Well, yes. At least sort of.
First, it’s worth noting that Arizona is not New York (and vice versa). The Arizona version of the Uniform Partition of Heirs Property Act might not be the same, and might not be interpreted in the same way. But the broad-brush intent is to keep exactly this kind of speculative investor from dispossessing families just because probate (and, for that matter, divorce) proceedings haven’t been completed.
But assuming that the Laurelton Estates, LLC, and Ms. Prince continue to discuss their relative positions, it seems pretty likely that she’ll have to come up with between $300,000 (her latest offer) $500,000 (their latest demand) to buy out Laurelton Estates, LLC. And then there’s still the matter of $83,000 of unpaid property taxes.
As we noted in our earlier podcast (and above), we have not seen a lot of this kind of speculative investment in Arizona. And with the Uniform Partition of Heirs Property Act in place, it seems likely that we won’t start seeing such actions now. And the fact that about half of the states have adopted the same law (or similar) suggests that new abuses will not be reported nearly as often.
