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DISPOSITION OF REAL PROPERTY
Section 1901. Real property subject to disposition; "disposition" and "fiduciary" defined. 1902. For what purposes real property is subject to disposition. 1903. Limitations. 1904. Petition and process. 1905. When disposition may be refused or delayed. 1906. Trial and determination of debts, claims and expenses; statute of limitations. 1907. Order determining disposition of real property. 1908. Order in which parcels shall be sold. 1909. Rights of the parties to be determined; unknowns. 1910. Bond of fiduciary. 1911. Order to be executed and report made. 1912. Effect of death of fiduciary. 1913. Conclusiveness of mortgage, lease, conveyance or release executed pursuant to order. 1914. Execution of the order; decree of judicial settlement. 1915. Allowance on bid to spouse, beneficiary or creditor purchasing. 1916. Provision for payment of undetermined claims and debts not yet due. 1917. Effect of conveyance of decedent`s interest under contract. 1918. Right of life tenant to be considered in disposition; distribution of moneys realized. 1919. Restitution from assets subsequently discovered. 1920. Disposition of surplus in action to enforce mortgage or other lien. 1921. Conveyance of real property by fiduciary to vendee of contract of sale made by decedent. 1922. Conclusive presumption after 10 years. 1923. Fiduciary of a decedent to notify local assessor of disposition S 1901. Real property subject to disposition; "disposition" and "fiduciary" defined 1. The court may authorize or direct the disposition of a decedent`s real property or any interest therein for any of the purposes set forth in the succeeding section. The court may entertain an application for disposition under this article even if the proposed disposition is or appears to be authorized by the will or by a statute. 2. Disposition of the real property of a decedent within the meaning of this article includes: (a) Sale, (b) Mortgage, (c) Exchange, (d) Lease, (e) Confirmation of a prior lease made without court approval, (f) Release of the right to an award for the taking of real property by eminent domain, and (g) Transfer to a spouse or other beneficiary in full or partial satisfaction of the interest or share of such person in the decedent`s estate. (h) Enter into possession of any real property, receive the rents thereof and apply them as directed by the court. (i) In the event the estate of a decedent is the owner of an estate in common in real property, the executor or administrator may bring a partition action or intervene in a pending partition action on behalf of the estate, if, upon application duly made, the surrogate approves. 3. The term "fiduciary" as used in this article does not include a trustee, guardian, donee of a power to manage during minority property vested in an infant or a voluntary administrator. S 1902. For what purposes real property is subject to disposition The real property may be disposed of for any or all of the following purposes: 1. For the payment of the expenses of administration. 2. For the payment of funeral expenses. 3. For the payment of the debts of the decedent, including judgment or other liens, excepting mortgage liens, existing thereon at the time of his death. 4. For the payment of any transfer, estate or other death tax. 5. For the payment of any debt or legacy charged thereupon. 6. For the payment and distribution of their respective shares to the persons entitled thereto. 7. For any other purpose the court deems necessary. S 1903. Limitations 1. Unless a proceeding under this article to satisfy a debt of the decedent is brought within 18 months from the date when letters were issued to the original fiduciary and unless such letters were granted within 2 years after the date of the death of the decedent the title of a purchaser or mortgagee from the distributee or devisee of the decedent which was acquired before the proceeding was instituted cannot be affected in any way by the proceeding. 2. A proceeding under this article to satisfy any debt cannot be maintained when the real property is exempt by law from levy and sale by virtue of an execution. 3. A proceeding under this article to satisfy a legacy expressly or impliedly charged on the real property must be instituted within 10 years from the date of the death of the decedent. S 1904. Petition and process 1. A proceeding under this article may be instituted by filing of a verified petition by a fiduciary or any person interested. The petition shall include facts showing the condition of the estate. 2. If the petition be entertained process shall issue to all persons interested and also to the creditors if the court so directs. 3. Upon judicial settlement of the accounts of a fiduciary any party to the proceeding may show facts which make a disposition of the real property left by the decedent desirable. When such relief is sought upon an accounting notice thereof shall be given in the process. 4. If any part of the reversion or remainder in the real property or in proceeds of sale thereof is limited in any contingency to the persons who shall compose a certain class upon the termination of any trust or legal life estate, the process shall issue to and be served upon those persons who would be entitled to the reversion, remainder or proceeds if the event upon which the termination of the trust or legal life estate depended had happened immediately before the application was made. 5. No person shall be entitled to process under this section solely by reason of the fact that he has been or may be designated as appointee of said property or proceeds or of any interest therein, under a power of appointment or disposition. 6. The disposition may be authorized whether any persons who may eventually become entitled to the remainders in the real property or to the proceeds of the sale thereof are in being or not, and whether at the time of the disposition the reversion is in the life tenant or in some other person. 7. The state of New York may be made a party in the same manner as a private person where it appears that the property may have escheated or where the state has a lien of record on the interest of any beneficiary. The petition in that case shall show the nature of the interest of the state and the reason or reasons for making the state a party to the proceedings. Upon failure to state such facts, the proceeding shall be dismissed as to the state. 8. The provisions of section three hundred fifteen shall apply to a proceeding under this section. S 1905. When disposition may be refused or delayed 1. The court may deny the application upon such terms and conditions as justice shall require. 2. If the disposition affects real property and it appears that the net income thereof may be sufficient to make the disposition unnecessary within a reasonable time, the court may postpone the application from time to time and authorize the fiduciary to enter into possession of the property, to receive the rents thereof and to apply the net rents as directed by the court. S 1906. Trial and determination of debts, claims and expenses; statute of limitations 1. If any claim, debt, demand, charge, or expense set forth in the petition presented prior to an application for judicial settlement, or set forth in the account or presented on the judicial settlement is objected to by any party to the proceeding whose interest will be affected by its allowance or disallowance the claim, debt, demand, charge or expense shall be determined, notwithstanding its admission or allowance by the fiduciary. 2. Where a defense arises under the statute of limitations as to any item so admitted or allowed it shall be deemed to be rejected by the fiduciary at the time of the objection and the time between its presentation or the commencement of an action where it was not presented and the time of such objection shall not be a part of the time limited in this act for commencing an action thereon. S 1907. Order determining disposition of real property 1. Upon the return of process the court shall inquire into the facts, the value of the property and the best manner and time of disposition. 2. The court may direct the disposition of all or part of the real property, describing it. 3. The order may determine whether the property shall be sold at public or private sale and may fix the manner, terms and conditions thereof. 4. Where a contract for the disposition of the property accompanies the petition, the order may direct disposition in accordance with its terms or any modification thereof. 5. If the court finds that it is not necessary to dispose of the real property or of any part thereof it may nevertheless determine the rights and interests of the parties and direct a conveyance to them in confirmation of their title or transferring the property to them in full or partial satisfaction of their distributive share. 6. If the order is made in the course of an accounting proceeding, the court shall adjourn a judicial settlement to await the proceedings taken under the order. S 1908. Order in which parcels shall be sold If the sale of real property is necessary for the purposes set forth in 1902, subdivisions 1, 2, 3 or 4 and the decedent dies seized of more than one distinct parcel, the following rules must be observed in determining the order of sale: 1. Property of which the decedent died intestate shall be sold before property which the decedent devised. 2. Property of which the decedent died intestate and which has not been conveyed by the distributees shall be sold before property which has been conveyed by them. 3. Property devised by the residuary clause in the will shall be sold before property which has been specifically devised. 4. When two or more parcels have been devised to the same person or group of persons, parcels which have not been conveyed by the devisees shall be sold before property which has been conveyed by them. 5. When one parcel has been devised to one person or group and another parcel has been devised to another person or group both parcels shall be equally subject to sale notwithstanding that one parcel may have been conveyed. S 1909. Rights of the parties to be determined; unknowns 1. Where an order is made directing the sale of the real property for distribution or directing the transfer thereof to a spouse or beneficiary the court may fix and determine the rights and interests of the respective parties in the order, or may postpone the determination until the final judicial settlement of the accounts of the fiduciary. 2. If a party entitled to an estate or interest in the property is made a party as a person unknown the court must provide for the protection of his rights, as far as may be, as if he were known and had appeared. S 1910. Bond of fiduciary 1. In any case where the court directs disposition of the property it may direct the fiduciary to furnish such bond as it may require to insure the execution of the order and the accounting by the fiduciary of all moneys received. 2. The court may require a bond notwithstanding that the will authorized an executor to serve without bond. 3. The court may dispense with a bond or require a bond in a reduced amount on condition that the proceeds of the disposition be deposited with a specified bank or trust company, subject to the further order of the court.
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S 1911. Order to be executed and report made 1. The fiduciary shall thereupon execute the order, subject to the approval of the court, and make a report of his proceedings thereunder. 2. The court may confirm or reject the disposition, extend the order to other parcels or require a re-execution of the order upon such terms and on such conditions as it may direct and it may relieve a purchaser from his purchase or compel specific performance of the agreement by both the purchaser or the fiduciary in any case where such relief might be granted by the supreme court, on such terms as justice shall require. 3. If the contract for the disposition of the property was annexed to the petition and approved by the order, the fiduciary may execute a deed without further order and no confirmation of the sale is required. 4. No decree of distribution or payment of the proceeds of the disposition shall be made in a proceeding commenced within 3 months from the grant of letters until the time for the presentation of claims as fixed by a published notice has expired or 7 months have expired since letters were issued to the original fiduciary and until all known creditors and persons interested who are not parties to the proceeding have been brought in or have appeared. S 1912. Effect of death of fiduciary 1. In the event of the death, removal or disqualification of all of the fiduciaries before the granting of an order directing disposition of the real property their successor must be substituted and the proceeding shall continue by or against the successor. 2. In the event of such death, removal or disqualification after the granting of the order but before the complete execution thereof the successor must proceed without further order to complete all unfinished matters as were required of his predecessors. 3. The successor must give such security for the performance of his duties as the court may require. 4. If no successor is appointed the court may make an order authorizing the fiduciary of the last surviving fiduciary, on giving such security as the court may require, to continue the proceeding or to complete all unfinished matters as were required of the fiduciary. S 1913. Conclusiveness of mortgage, lease, conveyance or release executed pursuant to order The mortgage, lease, conveyance or release made pursuant to an order granted as provided in this article shall bind the remainders and reversions as well as the immediate or future or trust interests in the real property and shall be valid and effectual against all persons under disability, absentees, internees and persons not in being having estates or interests vested or contingent for life or in trust or in reversion or remainder in said real property or in the proceeds of the sale thereof and against all other persons so interested or having such estates or interests who shall by acknowledged instrument consent to such order or who have been made parties to such proceedings or who are not entitled to notice thereof as provided in this article. S 1914. Execution of the order; decree of judicial settlement 1. When the order has been fully executed the fiduciary shall file, on or before the adjourned day of the judicial settlement, a supplemental account setting forth his proceedings under the order, the amount of the proceeds of the disposition and his expenses incurred thereunder. 2. The court shall thereupon continue and complete the judicial settlement and make such disposition of the funds in the hands of the fiduciary as justice shall require. S 1915. Allowance on bid to spouse, beneficiary or creditor purchasing 1. If upon a sale a spouse, beneficiary or creditor of the decedent becomes the purchaser of any of the decedent`s real property the court may, upon his application, direct the amount of his elective share, legacy, distributive share or claim, as the case may be, to be allowed, in the first instance, upon the purchase price and such purchaser shall be required to pay only the balance at the time of the sale. 2. If the proceeds of the decedent`s real property shall be insufficient to satisfy the cost and expenses of administration and the debts and funeral expenses of the decedent, the purchasing spouse, beneficiary or creditor shall be allowed and credited upon the judicial settlement of the accounts of the fiduciary only the amount he may be entitled to receive upon his elective share, legacy, distributive share or claim and shall then pay the difference between the amount originally allowed and amount he is entitled to receive. 3. If any purchaser has credit on his bid as above provided no deed shall be delivered to him until the judicial settlement of the accounts of the fiduciary and not until he shall have paid the entire amount required under the provisions of this section. S 1916. Provision for payment of undetermined claims and debts not yet due If any claim remains undetermined at the making of the decree or any debt is not yet due and the person holding it does not consent to its present payment, the decree shall direct that sufficient funds be retained by the fiduciary to meet the claim or demand when determined or when payable and provide for the distribution of any surplus of the amount so retained. S 1917. Effect of conveyance of decedent`s interest under contract 1. A conveyance of the decedent`s interest in all the real property held by him under a contract for the purchase thereof operates as an assignment of the contract to the purchaser and vests in him, his distributees and assigns, all the right, title and interest of all the persons entitled at the time of the sale in and to the decedent`s interest in the real property. 2. A conveyance of the decedent`s interest in a part only of the real property held under such a contract transfers to the purchaser, his distributees and assigns all the decedent`s right, title and interest in and to the part so sold. 3. Upon fully complying with the contract the purchaser, his distributees or assigns has the same right to enforce performance thereof with respect to the part conveyed to him and the fiduciary or his assignee has the same right to enforce performance with respect to the residue as the decedent would have had if he were living. 4. Any title acquired by the fiduciary, or his assignee, with respect to the part not sold must be held in trust for the use of the persons entitled to the decedent`s interest, subject to the dower or curtesy, if any, of the spouse. S 1918. Right of life tenant to be considered in disposition; distribution of moneys realized. 1. Where any party to the proceeding has an existing or inchoate right of dower or curtesy or where any party to the proceeding has a tendancy by dower or curtesy or an estate for life or for years in the real property the court must determine whether the interests of all the parties will be better protected or a more advantageous disposition can be made of the real property by including the disposition of such right or interest and if the court shall so determine there may be included in the order a direction that such right or interest be included in the disposition. 2. The provisions of law in relation to the right of dower, curtesy and estates for life, or for years or future or other interests in actions for the partition of real estate, so far as the same may be applicable, shall govern and control the distribution of moneys realized on such disposition which shall belong to the owner of such right of dower or curtesy, or tenant for life, or for years or future or other interests. S 1919. Restitution from assets subsequently discovered Where a decree has been made for the application of the proceeds of real property as prescribed in this article and assets which should have been applied thereto are afterward discovered or for any other reason money or other personal property of the decedent, which should have been applied thereto, afterward comes to the hands of the fiduciary, legatee or distributee, the devisee or other person aggrieved may maintain a proceeding in the court to procure reimbursement therefrom. S 1920. Disposition of surplus in action to enforce mortgage or other lien 1. Where real property liable to be disposed of as prescribed in this act is sold in an action or special proceeding, or otherwise, to enforce a mortgage or other lien thereon which accrued during the decedent`s lifetime the surplus money must be paid into the surrogate`s court having jurisdiction to issue letters upon the estate of the decedent, in the following cases: (a) Where 18 months have not elapsed since the date when letters were issued to the original fiduciary. (b) Where a proceeding for the disposition of the real property of the decedent or for a judicial settlement of the accounts of the fiduciary has been commenced within 18 months from the date of the issuance of such letters and is still pending. (c) Where no such letters have been issued and 2 years have not elapsed since the death of the decedent. 2. Money paid into the surrogate`s court as herein provided, pursuant to any direction of another court may be paid out to the fiduciary of the decedent, as directed by an order of the surrogate`s court, to be accounted for by him upon the judicial settlement of his accounts or in a special proceeding brought for that purpose in the surrogate`s court an order may be entered directing distribution to the persons entitled thereto if 18 months have elapsed since letters were issued to the original fiduciary upon the estate of the decedent or if no such letters have been issued 2 years have elapsed since the death of the decedent. S 1921. Conveyance of real property by fiduciary to vendee of contract of sale made by decedent 1. Where a decedent dies seized of real property after he has made a contract for the conveyance thereof remaining unexecuted at his death his fiduciary or successor may make a deed reciting the contract and conveying the real property. 2. The vendor`s fiduciary, distributees, devisees or assigns may file a petition praying for the confirmation of the conveyance, or the vendee, his fiduciary, distributees, devisees or assigns, for a decree that it be made or delivered, or the vendor`s fiduciary may pray for like relief in a petition for the judicial settlement of his account, but no proceeding pursuant to this section shall be required in any case for the sole purpose of perfecting title to real property and any such conveyance heretofore made by a fiduciary of a decedent is ratified and confirmed. 3. In a proceeding pursuant to this section the court shall have jurisdiction to adjudicate the amount remaining payable under the terms of any such contract and the respective rights of the parties. 4. In any case process shall issue to all persons interested and the court shall make such decree or order as justice shall require. S 1922. Conclusive presumption after 10 years. An action or proceeding to set aside any disposition of the real property of a decedent pursuant to an order granted under this article or under article 13 of the surrogate`s court act by reason of lack of jurisdiction over any person interested in the estate or by reason of any other defect in the procedure must be brought within 10 years after the date of the order or within 1 year after the effective date of this article, whichever date is later. After the lapse of such period the presumption that the order was regular in all respects and that the court had jurisdiction of all persons interested in the estate becomes conclusive. S 1923. Fiduciary of a decedent to notify local assessor of disposition Whenever the fiduciary of a decedent or his successor shall direct, or take part in or discover that his decedent`s real property or any interest therein has been transferred at or following such decedent`s death, he shall forthwith investigate and discover the nature of such transfer and file a written notice of such disposition or transfer with the local assessing officer and the local tax office of the locality wherein such property is located. Such notice shall contain the name and last known legal address of the decedent, the location and legal description of the property, if known, and the name and address of the transferee.