Senate Bill No. 406
(By Senator Chernenko)
____________
[Introduced February 21, 1994; referred to the Committee
on the Judiciary; and then to the Committee on Finance.]
____________
A BILL to amend chapter thirty-seven of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
by adding thereto a new article, designated article sixteen,
relating to the unlocking locked-in real estate capital act.
Be it enacted by the Legislature of West Virginia:
That chapter thirty-seven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article sixteen, to
read as follows:
ARTICLE 16. REAL ESTATE CAPITAL ACT.
§37-16-1. Short title.
This article shall be known and referred to as "The
Unlocking Locked-In Real Estate Capital Act".
§37-16-2. Legislative declarations.
The Legislature hereby declares the following purposes and
intentions:
(a) This article is intended to be a vehicle to raise revenue for the state from citizens who can and want to pay
taxes;
(b) The provisions of this article are designed to create
jobs and help the economy to recover;
(c) The primary purpose of this article is to unlock capital
gains and lower the deficit;
(d) This article is intended to create income tax due from
citizens who want to pay;
(e) This article is designed to lessen the number of
citizens needing assistance from the bureau of human resources
and from the division of agriculture in the form of food stamps;
(f) This article is designed to lessen, and in some cases
stop, the wrongful conversion of property interests without full
disclosure of all circumstances related to such conversion;
(g) This article is designed to increase commerce and the
buying of products;
(h) This article is designed to increase the demand for and
purchase of homes and motor vehicles;
(i) This article is designed to help pay for infrastructure
from citizens who want to pay;
(j) This article is intended to ensure that citizens live
their years as they planned and desired rather than having to
live in fear of having their real estate interests taken without
adequate compensation.
(k) A new "special needs" tax, to be paid to the state by
citizens who want to pay and which shall be used for the special needs of citizens and industry within the state, is needed to
protect the health and welfare of this state.
§37-16-3. All real property to be covered; partnerships may or
may not be included.
(a) All real estate held in undivided interests shall be
covered by this article.
(b) Partnerships involving real estate, whether formal or
informal and whether properly and duly recorded or not recorded
may or may not be covered by this article.
§37-16-4. Exemptions.
(a) The following is exempt from the provisions of this
article:
(1) Real estate owned exclusively by husband and wife;
(2) Real estate whereupon the owner resides;
(3) Real estate owned exclusively by a corporation;
(4) Real estate in partnership wherein a "written agreement"
exists as provided for herein. For the purpose of this article,
"written agreement" means an agreement rendered prior to the
formation of a new partnership, which exempts that partnership
from being bound by the applicable provisions of this article.
Such agreement shall be signed by all partners and notarized
before the partnership is formed. Such term shall also include
existing written agreements among partners of real estate which
were in force prior to the effective date of this article and
which are in conflict with any provisions of this article. In
the event of the existence of any such written agreement ante-dating the effective date of this article, such agreement's terms
shall supersede in force and effect any conflicting provisions
herein stated. Any written agreement entered into after the
effective date of this article shall contain an agreement on
price of the real estate that is subject to its terms by all
partners and as otherwise provided for in this article; and
(5) Real estate that is included in a subdivision or that is
earmarked for development for multiple sales:
Provided, That
such property does not include sales of an undivided parcel that
is intended to be divided or developed for homesites after the
sale by the buyer:
Provided, however, That such undivided parcel
may only be exempted from this article upon the execution of a
"written agreement" as defined herein, which sets forth terms in
which all owners owning undivided interests agree to subdivide or
develop such parcel, share the cost thereof and determine the
cost by projection thereof.
§37-16-5. Owners and shareholders.
(a) For the purpose of this article "owner" or "shareholder"
means any owner who owns an undivided interest in real property
in any fraction thereof.
(b) Upon the effective date of this article, any owner who
owns an undivided interest in real property who intends to sell
such property or a parcel thereof may immediately cause such
property to be sold if any other owner or group of other owners
of such property, owned undivided, intend not to sell, in the
event the following conditions are met:
(1) The owner shall notify all other owners of their desire
to sell. Such notice shall be by certified mail, return receipt
requested, sent to each owner's last known address. Such notice
shall also be provided to any attorney at law who contracts to
handle the closing of the property as soon as is practicable;
(2) Notice of intent to sell shall also be published by
Class III legal advertisement as provided for in article two,
chapter fifty-nine of this code. It shall also be published in
a newspaper of general circulation with the largest circulation
in the county wherein the property is situate:
Provided, That
any such notice shall be published three times in a thirty day
period from the time of printing of the first notice. It shall
also not be published in any span of time less than five days
from the date wherein it was published prior thereto. At least
one such publishing shall be in a Sunday or weekend edition and
at least one such publishing shall be in a daily edition, Monday
through Friday. When the newspaper with the largest circulation
is a weekly newspaper, the notice shall be published in such
paper in three separate additions within a six-week period from
the date of its first publication; and
(3) Copies of all published notices shall be given to the
attorney, if any, who has contracted to perform legal services at
the proposed closing of the property.
§37-16-6. Setting price.
Only a master appraiser (MAI) may be used to render an
appraisal of property subject to this section. Each owner has the right to enlist as many master appraisers to render
appraisals of such property as many times as he or she so
desires. Any such appraisal must be completed within one hundred
twenty days from the third publication of the notice of intention
to sell as provided for in section four of this article in the
event it is intended to be used in determining the price of real
property under the provisions of this article. If any owner does
not obtain an appraisal for the purpose of having the property
valuated within the time period prescribed herein, he or she
waives his or her right to do so.
In the event a new listing of the property is to be made as
the result of the lapse of an existing listing and there is a
change in market conditions involving such property, the price of
such property shall be changed to reflect market conditions:
Provided, That the price shall be increased or decreased by the
same percentage as reported relative to the change in market
value:
Provided, however, That upon a showing of changed market
conditions, official public documentation shall exist to reflect
such change or one or more owners shall be required to enlist the
service of a master appraiser to render an additional appraisal
in order to substantiate such change in market conditions. Such
appraisal shall be submitted before five o'clock, post meridian,
on the last day that any realtor's listing on the property is in
force, to the clerk of the county commission in the county where
the subject property is situate.
In all cases, the price of the highest appraisal or the change in price that is designated by the existence of official
public documentation, whichever is higher, shall be used to set
the sale price unless all owners are in agreement on another
price.
During the period of time in which a realtor's listing is in
force on such property, the price may not change unless all
owners are in agreement for such change and a "written agreement"
as prescribed herein is executed reflecting such agreement. Such
agreement shall also require the notarized signature of the
realtor who has listed the property and be recorded with the
clerk of the county commission in the county wherein the property
is situate.
Nothing contained herein may be construed to prevent an
owner to cause the sale of real estate in its entirety and to
have the price set thereon without causing the sale of any other
parcel described in the same deed when such deed includes
descriptions of more than one parcel of real estate:
Provided,
That if an owner desires to sell all real estate in the same deed
he or she may do so.
In all cases, written agreements supersede the provisions of
this article when same are otherwise in compliance with this
article and when such agreements are recorded with the clerk of
the county commission in the county wherein the subject property
is situate.
Any owner may buy the interest owned by another owner at the
correct percentage of the total price as set by written agreement, or as prescribed by appraisal or the existence of
official public documentation:
Provided, That in the event any
owner desires to sell his or her proportionate share of real
estate under the provisions of this article for less than the
agreed price or in the absence of such agreement, the price
designated by appraisal or official public documentation, he or
she may do so only upon disclosing such intention to all other
owners.
No real property subject to the provisions of this article
may be sold to an individual who is related by blood or marriage
to an owner, but who is not an owner of such real estate. Nor
may a sale of real estate be made hereunder to any business or
corporation or other person or persons or any other legal entity,
who is representing any owner, whether or not such business,
corporation, person or persons or other legal entity is known to
be representing such owner. This provision shall apply
regardless of the price that is agreed upon to purchase the real
estate.
In the event any person violates any provision of this
section, he or she shall be liable for treble damages to be
calculated in relation to the highest historical market value as
set by any master appraiser's appraisal of such real estate.
Such damages shall be payable immediately upon judgment being
rendered against a violator hereunder to each owner in his or her
proportionate share of such real estate.
Full disclosure of sale price, or of future earnings that stem from the sale of the property, whether such earnings
directly or indirectly stem therefrom, shall be made to each
owner. Each owner shall receive his or her proportionate share
of the total earnings, if any, that exist in addition to the sale
price of the property regardless of whether the property sells at
a sum equal to the highest appraisal. In the event any person
plans to build or develop a business on the property, after the
sale of same, such plans must be disclosed with all owners and
the profits from any such business must be shared with all owners
in proportionate shares relative to such owner's respective
interests unless any owner elects to withdraw and cancel his or
her share in any additional ownership in any business and in any
additional profits or losses, subsequent to the sale of the
property, in a written and notarized statement with or without
the agreement and consent of any other owner or owners.
In the event a buyer offers a price equal to the highest
appraised value and an ownership in a business is a condition of
that offer, and if none of the owners want to share in such
business, the offer may be refused with the property being
withheld from sale.
Full disclosure shall be made to all owners of any payment
that is expected to be received, for any work performed in the
business by any of the owners for the work they do, in addition
to each owner's proportionate share of any profits or losses due
that owner for his or her percentage of ownership in such
business.
In all cases, the full purchase price and all business
opportunities shall be disclosed to all owners and certified
copies of all checks and vouchers for payment, for the sale of
the property shall be given to all owners.
§37-16-7. Selection of realtor.
When any owner wants to list his or her property with a
realtor in order to sell it, the property shall be listed.
Any owner or owners of real estate who desire to sell such
real estate and who cause or causes a notice of intent to sell
such property to first appear in a newspaper of general
circulation under the provisions of this article shall be
required to furnish the name or names of acceptable realtors for
listing of the property. The names of such realtors shall be
sent by certified mail, return receipt requested, to all other
owners of such real estate by addressing such mail to the last
known address of each such owner and to any attorney with whom a
contract exists to handle any closing of the property in the
event same materializes or such list shall be provided to such
owners and attorney by telephone calls.
When there are no less than two and no more than four owners
of such real estate such list shall include the names of two
realtors. Any owners, if any, who were not involved in providing
the list of realtor's names shall pick which realtor to list the
property with by an open vote.
When there are no less than five and no more than twelve
owners three names of realtors shall be provided on the list provided for herein.
One acceptable realtor's name shall be provided for every
four owners and in the event there are more than four owners and
less than eight owners or more than eight owners and less than
twelve owners an additional realtor's name shall be provided for
the fraction above four owners or eight owners so that in the
event there are ten owners, three realtor's names shall be
furnished. Any owners, if any, who did not furnish the names
shall pick the realtor with whom the property shall be listed
from the list of same by an open vote.
In the event there are more than twelve owners of such real
estate, no more than four realtor's names may be furnished. The
owners, if any, who did not provide the names of realtors shall
pick the realtor with whom the property shall be listed from the
list of same by an open vote. When any vote results in a tie,
the owner or owners who provided the list of realtor's names
shall vote in order to effect a majority in favor of one realtor.
Whenever a realtor's listing lapses after such realtor has
been selected in accordance with the provisions of this section,
the procedure set forth herein to select a realtor shall be
repeated in order to designate the realtor to whom the next
listing will given:
Provided, That any successive list of
realtors who are proposed shall contain the name of the realtor
with whom the property was last listed.
In the event a real estate agent is not a realtor, but is
employed by a realtor such agent for the purposes of this section shall be considered as a realtor. More than one agent who is
employed by the same realtor may be included in the list of names
of realtors as prescribed herein and may be furnished as separate
and independent names included for selection when a minimum of
two separate realtors or real estate firms are employers of such
agents.
Any realtor or agent whose name is furnished under this
section shall have agreed to accept such employment and listing
prior to such name being furnished. If for any reason any such
realtor or agent changes his or her mind about listing the
property after being selected by an open vote, such realtor or
agent receiving the second highest total of votes shall be
selected. Other realtors may not be considered or furnished for
consideration in such event by the owner or owners who submitted
the original list for consideration unless all partners or all
owners holding undivided interests in the real estate agree.
Such agreement shall be evidenced by a written, notarized
agreement which shall be furnished to the attorney, if any, who
has contracted to handle the closing of the sale of the property.
Once the open vote has taken place, the owners holding
undivided interests in the property or the partners who did not
vote after receiving notification of the list of names of such
realtors, as required herein, shall have waived their right to
vote.
§37-16-8. Requirement of signatures.
When signatures of all owners of any real estate are required by the provisions of this article in order to sell such
real estate, whether such signatures are needed for listing
purposes or for completion of a sales contract or the transfer of
interests in a deed, a minimum of at least one owner, who is an
owner at the time the sale is initiated, shall sign each
document. The signature of each owner is desirable but in the
event any owner or owners refuse to sign any document necessary
to list property, enter into a contract for sale of such property
or to transfer interests in such property in a deed, the clerk of
the county commission wherein the property is located shall sign
each owner's name who so refuses to sign and after signing such
owners' names the clerk shall add the following writing on the
document that such owners have refused to sign: "By (name of
clerk), Clerk of the County Commission."
When the clerk signs on behalf of any owner as provided for
herein, the listing agreement, contract of sale or deed shall be
valid and binding in the event all other requirements as set
forth in this article have been complied with and such compliance
has been demonstrated to the satisfaction of the county clerk or
other person designated by this article.
§37-16-9. Special needs tax.
There is hereby created a "special needs" tax to be paid to
the state and county after being collected in the county in which
property is located and sold subject to the provisions of this
article. Such tax shall be paid by all owners of real estate
that is sold who were owners of such real estate when the sale of same was initiated. It shall be paid from the proceeds of the
sale of such property. The amount paid to the state shall be
calculated from one half of one percent of the sales price. The
amount paid to any applicable county shall be calculated from one
percent of the sales price. It shall be collected by the clerk
of the county commission and unless so collected the sale of any
property to which it relates shall not be completed.
The tax collected hereunder shall be used for special needs
of the citizens and industry in this state. Such need shall
include, but not be limited to, the following:
(a) Financial injury suffered by any coal operator operating
in this state. Such injury is presumed to exist as the result of
any newly implemented British Thermal Unit (BTU) tax that is
imposed by the federal government that forces a coal operator to
raise the price of coal to offset such tax thereby creating a
reduced demand for exports resulting in lost sales volume. The
proceeds generated from the tax created herein shall be used to
reimburse any effected coal operator in order to neutralize the
negative effect of a BTU tax and thereby remain competitive in
the open market; and
(b) When individual citizens of this state are unable to pay
charges imposed for heating bills, revenues collected from the
special needs tax shall be used to subsidize such citizens in
order to pay such heating bills.
§37-16-10. Closed circuit television or telephone to be allowed
for use in circuit courts to enforce violations; owners to be allowed to telephonically call other owners and the
county clerk and request and receive accurate information.
(a) In order to enforce any provision or provisions of this
article, any owner subject to the provisions of this article
shall be allowed by the circuit court to use video images of
himself or herself as such may be transmitted by closed circuit
television transmission or such owner shall be allowed to appear
and testify by telephone in lieu of a court appearance so that an
appearance by any owner may not be required.
(b) In the event any owner of real estate subject to the
provisions of this article telephonically calls another owner of
such real estate or such owner calls the clerk of the county
commission and requests information regarding such real estate
owned, such other owner or the clerk of the county commission
shall be required to state such information in an accurate
fashion in the event such owner or clerk is capable of doing so.
§37-16-11. Penalty for violations of article.
In the event any person violates any provision of this
article, whether such person is an agent of a principal violator
or a principal violater, such person shall be guilty of a felony,
and, upon conviction thereof, shall be fined not less than five
hundred thousand dollars and imprisoned in the penitentiary for
not less than forty nor more than eighty years. In the event any
person commits a second or subsequent offense of the provisions
contained herein, such person shall, in addition to the penalties
prescribed for first offense forfeit all ownership interest in any real property such person owns, regardless of the location of
such property.
NOTE: The purpose of this bill is to create the "Unlocking
Locked-In Real Estate Capital Act." The article creates a new
way to sell real estate when property is owned by more than one
owner. The bill also contains criminal and civil penalties for
violations of its provisions.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
Email
Webmaster | © 2024 West Virginia Legislature **
