Beneficiary Living in Inherited House

A beneficiary living in an inherited house can be a problem, especially when there are several beneficiaries who have inherited the same house. If the beneficiary living in the inherited house is the sole beneficiary entitled to the house, there are no problems. But if there are several beneficiaries entitled to the house, then one’s options and remedies will depend on which stage you are in, post-death of the original owner.

Beneficiary living in inherited house during probate proceedings

When a beneficiary is living in the inherited house during probate proceedings, the executor or administrator can file an action to eject the beneficiary and obtain possession of the house. In order to do this, the executor or administrator must first be appointed by the probate court and granted letters testamentary or of administration. Only upon the grant of these letters can an executor or administrator have the standing to file an action of ejectment.

Usually, the executor or administrator will only file this action if they wish to sell the house. If they don’t wish to sell the house, they usually don’t waste time in filing this action. They simply transfer the house to the designated beneficiaries through an executor’s or administrator’s deed and close the probate proceedings. Thereafter, the beneficiaries can discuss amongst themselves what to do with the property.

Beneficiary living in inherited house after probate proceedings

After probate proceedings, the executor or administrator cannot anymore file an ejectment action against the beneficiary who is living in the inherited house. When the inherited house is transferred to the beneficiaries through an executor’s or administrator’s deed, the beneficiaries entitled to the house become co-owners under tenancy in common. The remedy of the other beneficiaries, who are now co-owners, is to file an action for partition (and not ejectment).

In New York, the Uniform Partition of Heirs Property Act (UPHPA) requires inherited property (or heirs property) to go through a more stringent process in partition. UPHPA requires the co-owners to bargain in good faith regarding the sale of the property in a mediation conference. If this fails, the court is required to make a valuation of the inherited property in an evidentiary hearing. Based on this value, the property is offered to the defendant co-owners, who are given the right to purchase the share of the co-owner seeking partition. If the defendants do not exercise this right, property may be sold in open market (and not in auction) at fair market value.

When is Partition generally sought

There are several reasons why a partition sale may be sought by the owners. The court would consider whether the property could be physically divided (such as a vacant lot) or could only be sold with its proceeds distributed (such as a house). In the case of a vacant lot, there would be partition in kind, while in the case of a house, it would be a partition sale.

Generally, agreeing to partition the property is the most economical option for co-owners who do not wish to stay as a co-owners anymore. This would save the co-owners legal fees and court costs. However, when a co-owner refuses to partition the property, the other co-owner has no other remedy but to file a lawsuit for partition. Attorney fees, however, will be taken out of sales proceeds of the property, and for this reason, it is to the best interests of all the beneficiaries of an inherited house to agree amongst themselves at the soonest possible time what to do with the property.

Sometimes, you need to file an action for partition in order to force the co-owner/beneficiaries to negotiate in good faith regarding the sale of the property. In this case, you will need a lawyer, like us, with this type of expertise. If you own property with someone else and you are in disagreement on how to use the property, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].

Attorney Albert Goodwin

Law Offices of
Albert Goodwin, PLLC
31 W 34 Str, Suite 7058
New York, NY 10001
[email protected]