In this video, Land Rights Law Attorney Philip Hundl talks about the land partition process in Texas in a presentation to the Wharton County Bar Association.
Transcript Summary of Philip’s Presentation on the Texas Land Partition Process
How Land Partitions Became a Substantial Part of My Law Practice
Thank you very much, my name’s Philip Hundl. I have been practicing here in Wharton County for almost 20 years. Randy and Ben talk about the years they’ve been here, and it’s surprising when I look back and how long I’ve been here. I grew up here.
I practiced in San Antonio and Houston for a while at a big firm. Went to the University of Denver Law School. People always say, well, why’d you go to Denver? Well, why not? Denver’s a pretty nice place, and everybody agrees. And so, interestingly, most of my colleagues in law school did not leave Denver. They wanted to stay there, and they stayed there.
But it’s been a lot of fun practicing here in Wharton County, and I was able to enjoy and appreciate the breadth of practice that I had for a long time. From criminal, family, estate, probate, I was able to do it. And it was very unnerving at times because of all the things you had to learn and do — the criminal procedure and then jump over the civil procedure.
I always looked at kind of the more experienced and seasoned lawyers and they seemed to have figured it out and specialized and focused on a particular area. And so I always thought, well, these guys seem like they figured it out. So over the years, what I’ve tried to do is whittle away at what I didn’t want to do and try to find what I enjoyed doing.
You know finding what you enjoyed doing in the law is sometimes challenging. It was one of those weekends — I won’t say rare weekends — I was preparing for something on Monday and working on a Sunday. And, the time just went away and I got into what people call flow and I thought to myself, you need to pay attention to this because you seem to enjoy this a lot.
And it was a land case. It was actually an eminent domain case. It is now a lot of what do I do. I do eminent domain and condemnation cases for landowners. and land partitions. Probably twenty percent of my practice is land partitions, and the rest is representing landowners with land and eminent domain cases.
An Overview of the Land Partition Process in Texas
What surprised me as I handled more and more land partition cases throughout Texas is that not many lawyers know how those cases work procedurally, and also many judges aren’t real familiar with it, because how often do they get a land partition case? So, at any one time, right now, I probably have about a dozen land partition cases going in different courts and at different stages. So, I’m going to try to hit the high points on land partition cases.
How Much Will It Cost?
You know, of course, when clients come in, one of the first things they ask is, well, you know, what’s this going to cost? It’s like any case. It depends, right? I hate to give you that answer, but if you know, And I always tell everyone, I have certain steps.
These are steps I go through. First step is, we send our proposal. There’s a hundred acres and there’s four kids. and this is the shapes or the pieces. This is the piece that I want and these are the pieces that you guys can have. And if everybody says okay, well then that doesn’t cost very much.
You get a settlement agreement in place. It could be a simple letter. Go get a survey, prepare deeds and you’re done. Or it could go all the way through and we’ll talk about the different stages, but it could go all the way to quote unquote the end, and it could be a case that costs the same as 100 acres could cost. It could be 100 acres, or it could be 10 acres, and it could cost $100, 000, $200, 000.
I know both judges here have had, as attorneys and lawyers, long drawn out partition cases. I think one of the longest land partition cases in Wharton County was something that George Willis was involved with, and I think that case went on for ten to twelve years?
What Are the Applicable Statutes?
Alright, let’s jump right into this. Today, we’re going to briefly discuss the statutes—specifically whether you fall under Section 23 or 23A of the Texas Property Code. It used to be just the partition code Section 23.
Additionally, you must be aware that some rules of civil procedure also apply to partitions, so it’s important to know these as well. Looking back at the history, it seems that Section 23A was introduced in 2017.
So, what is Section 23A? It pertains to heirs’ property partition. If 20 percent or more of the property is owned by heirs—people who are related or who acquired it through inheritance from a relative—then it falls under Section 23A. From my experience, most partitions are likely to fall under Section 23A. You know, I have a case where my client owns 80 percent and the other person, who is not a relative, owns 20 percent. This arrangement fits under statute 23A. So, it’s important to know which statutes apply.
What Are the Land Partition Steps and Procedures?
And then, what are the general steps and procedures? I always like clients to know where they are in the process, and I often discuss anecdotal information. I change the names and facts slightly, but for instance, I was the third lawyer hired for a large partition involving land in three different counties and groups of landowners. That’s how people often connect; they see it as part of their family heritage.
In this case, there were five people in one group and eight in another, and they all thought the process was nearly complete when we hadn’t even reached the first trial. I had to remind them that they had a long way to go. Then, somewhat unexpectedly, everyone came together and settled the matter.
Who Are the Parties?
Let’s discuss the steps involved. First, you have an initial trial, which serves as the focal point for our discussion today. We will cover the necessary steps and procedures, including ethical considerations when representing multiple co-owners who may seem aligned.
Next, we’ll delve into the proper methodologies for appraisal and the critical importance of preparing for and conducting meaningful mediation—a step often mishandled or overlooked. Following that, we’ll discuss the documentation process and how to effectively wrap things up.
So, let’s begin by asking: Do you have all the necessary parties involved?
I learned the importance of this question from Judge Estlinbaum during a partition case involving approximately 12 acres. He consistently emphasized, “Do you have all necessary parties?” Typically, a client might state that only four people are involved.
However, in that instance, it turned out there were actually 26 people. Identifying all the heirs was a significant challenge and required multiple heirship proceedings and determinations. At one point, there was a dispute whether there were 26 or 27 people involved. For example, there was a disagreement about Jeremy being an heir. Eventually, we had to hold a hearing to resolve whether Jeremy was indeed an heir.
Certainly, there are instances where partitions are straightforward with clear deeds. However, titles are often not as clear as one might assume. In our case, it took approximately 18 months to two years just to identify all the necessary parties.
Audience Question: Do you have to go back to probate to do that determination?
You would do it within this proceeding. An heirship within this proceeding. So, when that is done, does it have the same effect as probate court? Yes, you will have a judgment from the court determining certain heirs.
What’s the History of Section 23A?
Yes, the heirs partition 23A, and some of the differences in 23A include a court-ordered appraisal and a buyout process. The 23A provision came about because properties in urban areas, historically owned by minorities with small percentage interests, were vulnerable. For example, there might have been 50 owners of an expensive retail block, and a savvy investor could buy out just 1 percent and then file for a partition. This investor could then convince a court to order the property sold, subsequently buying it at a reduced price. Thus, 23A was established to protect the heirs.
Under this provision, if you seek a court order to sell the property, your share may be bought out. For instance, if you co-own 100 acres and want your 20 acres, you won’t be forced to sell your share to someone else under 23A unless you ask the court to sell the entire 100 acres and divide the proceeds. In that case, you could be subject to a buyout.
What Happens at the First Trial?
Steps and procedures begin with an initial trial. This is when the court determines whether the property can be partitioned in kind or not. What does the law say? It states that the court will endeavor to find a way to make it partitionable.
So, what does that mean? When someone comes to me and says, “We’ve got these 50 acres and there are 10 of us; there’s no way to divide it up,” I’m going to suggest that the court will likely find it can be partitioned. However, if there’s one acre with a house and there are 20 co-owners, I would predict that the court will decide it cannot be partitioned and must be sold.
Courts generally attempt to partition properties if feasible. But, consider how you would divide a house among 20 people. The most practical solution, as the court would determine, is to sell the property.
The court would then order it sold. There are various ways this could be executed, but typically, a receiver akin to a realtor would be appointed to handle the sale. The proceeds from the sale would then be divided among the owners, after deducting necessary expenses.
How Are Surveyors Appointed?
Appointment of commissioners is pretty standard; everyone knows that. However, appointing a surveyor is less common. Why would you need a surveyor appointed? Because, as with any property, all co-owners might agree on its size—say, 100 acres—but is it really 100 acres? It’s crucial to have a surveyor actually survey the property and reveal the true size. For instance, what you thought was 95 acres might actually be 100 acres, but much of it is covered by surrounding roads, and the property extends into the road.
Moreover, it’s important that the survey includes any and all improvements, such as roads, buildings, and wells. Water wells often get overlooked despite their value. Additionally, you want any and all easements included in the survey because this information helps commissioners, along with other data from the parties, to make informed decisions. Relying on an outdated 1970s survey or one hastily sketched on the back of a napkin won’t suffice.
Therefore, having the surveyor appointed and a survey prepared before the commissioners even begin to look at the partition is critical. Furthermore, special instructions are essential. For example, a client once asked me, “How exactly does this work? Are the commissioners going to visit the property? Are they going to meet with us? What’s the procedure?” This information isn’t found in any guidebook. Case law from Harris County indicates that commissioners need not visit the property; however, if representing a landowner whose commissioners do not visit the property, you can expect them to be perplexed and frustrated, especially if the landowner wanted to accompany the commissioners to highlight unique attributes of the property.
Thus, it is necessary to incorporate these special instructions into the order: affirming that the land can be partitioned; identifying the appointed commissioners; confirming the appointment of a surveyor; and mandating that commissioners visit the property. Ultimately, it depends on what the judge agrees to.
Often, parties will agree to certain terms; however, if they do not, you must request that the court instruct the special commissioners accordingly. It is crucial to consider various factors when dividing value. Let me focus on this aspect for a moment. When we engage with the commissioners—visiting the property, meeting with landowners, reviewing appraisals—both formal and informal hearings and meetings take place.
I have conducted these in several ways. I have had multiple special commissioner meetings where the commissioners would meet with one side, then the other, repeatedly, asking each to submit their information. Additionally, there was an instance right here in this building where three commissioners conducted a hearing that lasted about an hour. Each side presented their evidence, and that concluded the hearing.
Who gets to pick the special commissioners?
One aspect of the special commissioners phase, including evaluation, is determining who selects the special commissioners. If the two parties can agree on special commissioners, that is one option. If not, the judge often requests suggestions from both sides and then makes the final decision.
Recently, we had a situation where we selected one commissioner, the opposing party selected another, and the judge appointed a third.
Partition Is Based on Value
But in this commissioner’s phase and division, always remember that in a partition, it’s based on value. You know, people almost always say, “Well, it’s 100 acres, there are four of us, so we each get one fourth—that’s 25 acres each.” But my 25 acres just happens to be on I-10, and yours is way in the back in the floodplain. Remember, it’s about value. And that begins to get obviously a lot more complicated. That’s where it’s important to have appraisals, and we’ll talk about appraisal methodologies. So always remember: it’s value, value, value. Not “I own one fourth of a hundred acres, so I want my 25 acres.” You don’t own 25 acres; you own one fourth of a hundred acres.
So, you get the commissioner’s report. Is that it? Is that the end-all, be-all? Maybe, maybe not. If everyone is happy with the special commissioner’s report, then that’s it. If there’s no objection, it’s a final judgment—done deal.
But how often is everyone happy? Normally, if you’re not happy with it, you can object. You can say it wasn’t a fair partition or that it didn’t comply with the order, which includes many of these special instructions. I’ve experienced both scenarios. I’ve had one recently where nobody objected to the report.
I have also had commissioners inform both lawyers that they are considering options A or B. Option A isn’t great for us, while B is favorable. So, we were sitting pretty well. Then they choose option C. And C is not what we wanted.
So, I think sometimes it would be helpful if special commissioners would say, “We’re considering doing A or B, but why don’t you all try to work things out?” Because with partitions, and we’ll talk about mediations, I think the best result is normally when you reach a mediated settlement agreement. Because the parties know the land better than anybody else.
Can You as a Lawyer be Appointed as a Special Commissioner?
I’ve asked the courts, and one or both of the judges, if I could be appointed as a commissioner on partition cases. They laugh and say, “Well, you’re normally the one with the partition case.” Typically, those appointed are landowners in the community or county who are knowledgeable about land and real estate. So who are these people? Realtors, or if it’s farmland, perhaps a sophisticated farmer who manages a significant amount of farmland.
Partition cases often have a lot of moving parts. You may have land in three different counties, or it may be a ranch. This particular property is where we handle certain activities for the ranch. How do we manage that since we’re all still in the ranching business? There are many factors to consider, such as whether the land is irrigated.
How Are Special Commissioners Appointed?
Courts usually say, “If you all have an agreed order at the first trial, great. Hand it to me, and I’ll sign it.” I’ve done that. Other times, no one can agree on anything, and so you actually have the first trial. I’ve experienced that as well.
The court will appoint commissioners. I’ve also had a judge say, “You submit three names, and you submit three names, and then I’ll pick three.”
But yes, this process always involves remembering that most of the time, it’s family members involved, and a lot of the disagreements go back to issues that aren’t even related to land. Now they’re fighting about land, or it’s become so diluted with so many people involved. I had a partition case where, luckily, it was just three people—all in their 80s. Two of them didn’t want to partition; my client did. He said, “I really want to get this wrapped up. If not, it’s not going to be three people; it’s going to be 24.” That was a concern.
What Are the Qualifications of Special Commissioners?
I mean, it involves condemnation, eminent domain; you appoint three people to be special commissioners to come up with a valuation. And you might ask, “Why do they do that?” Because if you don’t like their answer, you can object and then it goes into normal civil litigation. It’s similar to this, but where does it come from? I will look into the history, but I think it will reveal that a long time ago, these three people made the decision and that was it. Instead of having a jury of six or twelve people, let’s keep it simple and have a jury of three. I think that was probably the rationale, but I do want to know the history of it because it is different from any other proceedings we have, except for eminent domain.
Normally, you have people who understand land, its complexities, and valuations. This gives landowners a bit of comfort knowing that the commissioners understand where they are coming from and are listening. It’s a more informal process, and in the really complex cases where my clients feel this is the only way it can be, what do you want in any trial? You want to be able to present all the evidence and do your best, which is what I did in that case. I got it all out there and hoped they didn’t miss anything, then they made a reasonable decision. When something out of left field happens, like I mentioned before with options A and B and then they choose C, it throws everyone off.
So, what happened in that case? We actually went to another mediation. In partition cases, it’s not uncommon to go through more than one mediation. I’ve had two mediations; I’ve had three mediations. Once, I asked Randy to suggest a mediator who understands partitions. We used a lawyer who wasn’t a mediator at all but had been involved with the Duncan partition. He informed everyone very well about how long this could go on. When representing co-owners, this is an ethical consideration—you want them all to be aligned.
Are Conflicts of Interest an Issue?
You can’t have them halfway through the partition suddenly changing their minds and saying, “But I really want this,” because then you end up with clients fighting over the same property or wanting to be jettisoned from your group.
Be careful with that. Always address waiver of conflicts. Essentially, they suggest that if you don’t share the same objective, then I’m out—for everyone. Also, always be prepared to withdraw if necessary.
What I must emphasize is the process: initially, the commissioners do their work and report. If we disagree, someone can object. Then comes the second trial where the judge will amend the report.
If it’s not resolved to our liking, we can persuade the judge or even a jury to see things our way. It becomes a question of whether the partition is fair or whether the order was complied with. If not, the solution isn’t to send it back to the same three—no, scrap that panel. Appoint three new people.
And start over. I often have to employ this tactic, where you can keep the process ongoing for some time. And of course, if the second trial results in a fair partition and compliance with the order, then you have the option to appeal to the court of appeals.
There are numerous ways to prolong this process.
How Are Fees Divided Between Co-Owners?
What about fees? How are fees divided between the co-owners?
Let’s say there are five people; they represent four, and I represent one. They might suggest a 50-50 division of the cost to the judge. However, case law clearly supports a pro rata division. Therefore, my client would not have to pay 50%, but rather one-fifth, if there are five people involved.
Remember the importance of pro rata appraisals. Under section 23A, the court appoints an appraiser to evaluate the entire property, which might be 100 acres. I sometimes question the value or usefulness of this, but it is what is required unless the parties agree to waive it or decide to use the CAD value for that particular section.
Hire One or More Appraisers?
In a previous partition case involving Randy, I suggested using one appraiser to save costs, but the other side disagreed. It could have been a cheaper alternative than paying around $5,000.
Currently, in another case, we are using an appraiser who initially appraised the entire property and has now been agreed upon by each side to appraise sub-portions and propose partitions for each side. This approach is one way to handle appraisals and try to save money.
Potentially, you could have one appraiser appointed by the court, another hired by one side, and a completely different appraiser for another side. If there are three or four different sides involved, you could end up with three or four different appraisers.
Once we agreed to use a specific appraiser for a 3,000-acre property. The other party believed it could be divided into six tracts, whereas we thought it should be divided into twelve. Depending on whether it’s divided into six or twelve tracts, the value changes significantly. We agreed that the appraiser would evaluate it both ways before proceeding to mediation.
It’s crucial to understand that having an appraisal done before consulting a lawyer might not be beneficial in a partition case. A client might think they are prepared because they had the entire property appraised. However, for partition cases, it’s essential to appraise the specific part you are interested in compared to what the other side will receive.
What About Mediation in Land Partition Cases?
So, mediation. When you attend, ensure you have all the necessary tools. What are these tools? Consider a scenario where you’re mediating a property dispute involving 100 acres, and the opposing party wants a specific division, perhaps a one-fourth to three-fourths split. It’s essential to have a method to visually represent and estimate the land divisions because, as often happens, negotiations can shift unexpectedly. For instance, Ashley Tegler and I experienced a situation where the other party initially wanted 30 acres but eventually agreed to 28.
Suddenly, they might only want 20 acres. Inevitably, your client will want to see what this looks like on a map. Therefore, having access to aerial maps is crucial. Typically, CAD maps are useful because they allow you to draw, measure, and estimate areas precisely. Moreover, you should be able to print these maps during the mediation.
If an agreement is reached, it should clearly specify the details. For example, it could state that “the parties agree that Hundl’s client will receive 28 acres, shaped as depicted on Exhibit A or B.” It’s also vital to outline how the partition will be described, considering that a survey cannot be conducted before or during the mediation but must be completed afterward.
Additionally, consider other details such as fencing. In cases involving farmland or ranches, fencing is usually required. It’s important to determine who will be responsible for fencing and other related costs. Decisions regarding the choice of surveyor should also be finalized during mediation.
However, I am not generally in favor of arbitration. At Fulbright and Jaworski, I learned never to include an arbitration clause in any deal. But in mediation agreements concerning partitions, I find it beneficial to include a provision for arbitration where the mediator also serves as the arbitrator. This approach is effective because the mediator, having spent an entire day understanding the nuances of the case and the land involved, is well-equipped to resolve any minor disagreements that arise post-mediation.
Wrapping Up the Land Partition
And then the final documents—this is just wrapping it up. Either final judgment or a dismissal. You get the partition deed signed and ensure the partition deeds contain what they need. If it includes easements to access a tract, then make sure the easement is properly described.
We had a dispute over how wide the easement was going to be. It was supposed to align with where the existing road is. Was it 30 feet wide? Or 28 feet wide? I mean, really, is that significant? Well, it was to someone. So, we had to have that arbitrated.
I guess they would prefer deeds, but getting the commissioners and the surveyor paid can sometimes be a problem. Clients have often spent way more than they anticipated and are fed up. Make sure that the commissioners and surveyors get paid, frankly, even if it comes out of your pocket. You don’t want the commissioners to get stiffed, and I know that has happened sometimes.
I think that’s probably it.
Any questions? You all have asked a lot of questions as we went, which is good.
Audience Question: What would be a short time frame for a land partition?
A two-year partition is typically appropriate. By the time appraisers are involved, the process often extends because these professionals take considerable time. Their task is not merely valuing the property as a whole, but rather assessing the value of the specific proposed partition to ensure equity.
Regarding the procedural aspects, there are many details I could discuss, but they are not essential for this overview. If you are dealing with Form 23A, as Judge Sklar would advise, thoroughly read and adhere to all the associated rules.
It’s interesting to note that partitions seemed to have increased during COVID. Perhaps people began reevaluating the undivided interests they held in land that was otherwise idle. This reflection led to a noticeable rise in partitions during the pandemic, a trend that has continued with significant activity in land partitions since then.
Audience Question: How can a partition case become cost-prohibitive?
Consider a scenario where you know approximately 20 people involved in the partition. You must serve each of these individuals, which can be expensive in itself and often renders the process cost-prohibitive. This is particularly true when dealing with smaller properties. Few people are willing to engage in such partitions because the legal expenses can be substantial, regardless of the property size. Lawyers often find that clients are not prepared to cover these costs. For example, the expenses associated with partitioning a 10-acre property could be comparable to those for partitioning a 1,000-acre property.
