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Heir Property Owners Need Clear Title

heir-owned property literally falling down

Heir property is found in many parts of the American South and in African-American neighborhoods in some cities. The term pertains when the owner of real estate dies without a will and then the family does not take the estate through probate court to settle the title to the property. Dying without a will known as dying intestate by the way.

In some communities this type of real estate may be called called generational property or successional homes. People who aren't familiar with this situation often wonder why it occurs. Mostly this happens in lower-income families, where there is fear of or ignorance of the legal system and simply a lack of funds to pay the legal or court fees involved.

While all may go smoothly with no real negative consequences at first, eventually it is likely to become a neighborhood and community problem.

In other words, one or more family members may live in and maintain the heir property for some time or even for a couple of generations. The issue arises somewhere down the line where the heir who takes good care of the property dies or is incapacitated. Perhaps his or her children don't care about the property, live far from it, can't afford repairs, or maybe don't even know of its existence.

This site isn't legal advice, as we say on every page, but we do our best to give a layperson's explanation of legal concepts as they impact communities. In the case of heir property, the heirs own the land but there is no "clear title." You also might hear the expression that the title is clouded.




Why Lack of Clear Title is a Problem

First and foremost, there is no concept in American law of family ownership. An individual or a named group of individuals own real estate.  Therefore if all of the heirs are not listed on the title and the last owner dies, there would be a clouded title. And if you don't have clear title, you can't convey a clear title to someone else if you wanted to sell the property.

So that's a big deal. If you can't sell the property to get money to divide up among the heirs, that means someone has to live in it or you let it sit empty.  If all of the heirs are happy with their current living situation or if the home is in an undesirable neighborhood, no one may want to move in.  Then the family is left with two options. Either they must rent it out or let it sit empty.

Thinking about using the property as a rental, that may be fine if there is a market for rental property in the area and if the property is in good condition and won't require many repairs before it can be rented successfully.  If it needs several thousand dollars of investment though, family fights are likely to break out about who will pay for repairs and updating.  (We're going to leave aside the question of who would be entitled to any rent payments and in what proportions; depending on the state, that can and probably will present legal problems in itself.)

The next problem with heir property is that it will be impossible to borrow money to repair the property or make room additions. Second mortgages wouldn't be obtainable either. Government housing assistance will be unavailable, even if you otherwise would qualify.

Someone acting as a caretaker and occupant of an heir property probably can't obtain insurance, and if they do, the error might be caught when they attempt to collect on a claim.

So all of these are pretty serious problems for the family.  This is why we often see these houses left empty while heirs either dig into their denial of these problems, fight and squabble, or throw up their hands in dismay and make the rational choice to abandon a property that isn't worth much anyway.  But empty houses are not good for neighborhoods!  

Increasingly, cities are imposing vacant property registration requirements too, which means that a family is incurring even more legal liability if the required registration isn't completed and the sometimes sizable registration fees aren't paid.  This means that a family intending to do the right thing might have to pay both property taxes and vacant property fees if they allow the house to sit empty while trying to figure out what to do.


Why Heir Property Is a Community Issue

If there is a geographic concentration of heir property, you can see that after several generations, home maintenance problems become more and more likely. Eventually the family actually will give up, because the housing decline has become so severe. This is a truly unfortunate loss of a previous generation's investment in real estate. 



After Hurricane Katrina caused levee failure in New Orleans, the heir property issue became a strong focus in Louisiana because families couldn't sell, collect insurance, or rebuild. The legislature passed what is known as Act 81 in 2009 and Act 323 in 2011 to make it less expensive and time-consuming to clear title to lower-value properties. This might become a model for other states that could stand to simplify their procedures.

If you live and work in other states, please ask your legislators to consider addressing this problem by simplifying the probate process as much as possible. If you work with low-income individuals, encourage them to make wills that will be considered valid in their state, even if they have to use a legal clinic, online kit, or some such. Even if that individual makes a will, it's important to keep an updated list of the names, relationships, and contact information of all the heirs.

So communities, scale up to address your heir property issue, because you can't afford to allow the legal complexities to multiply for people who are not wealthy in the first place. 

The heir property question also figures into trying to clear up foreclosures. Sometimes a mortgage slipped through with title problems undetected until the real estate landed in the hands of a bank.

Like many issues impacting low-income households, this is a potential downward spiral in which community poverty may truly lead to the severe issues of losing the use of a home that becomes too dilapidated, and then not even being able to sell the land. Abandoned homes are bad news for every community.


How to Help Elderly Individuals Avoid This Situation

This is why people who are part owner of heir property should consult an attorney and attempt to make the situation right, before there are even more heirs in successive generations, who may or may not even know each other. As this situation is allowed to continue for years and years, the family gathering required to resolve the situation is likely to become larger and larger. Or worse, you might have to hire a mediator.

If the folks involved are afraid of attorneys or the legal and governmental system in general, social service agencies need to refer such clients to legal services or perhaps one trusted attorney from the community can be found.

Unfortunately families often don't seek appropriate help on their own, especially when none of the heirs live in the neighborhood or even the same city.  

Neighborhood associations where heir property is fairly common should work diligently at setting up legal clinics where volunteer lawyers help prepare wills for older residents.  You can sponsor events where attorneys who are willing to help low-income families free (pro bono) come to explain what is involved in avoiding a situation where grandma's house falls down because no one is able to take responsibility. Work with your local bar association to plan this event.

Larger cities have legal services offices where lower-income older adults can get help.  (You can search for your local Legal Services Corporation office, if any, at this link.) Even then, the legal services office may need to recommend private attorneys who will work on a volunteer basis.  The neighborhood association has a vested interest in making sure that no homeowner dies intestate, so it's worth some time to try to arrange for a few Saturdays of free legal help.  

Then while the low-cost or free attorneys are helping out with preparation of wills, the neighborhood association can and should talk with them about how to set up clinics or workshops for the current heir property owners or representatives.  That situation is more work for an attorney usually, so the neighborhood shouldn't expect that to be quite such an easy sell.  However, it's worth the work when homes are saved from being empty until they are sold at a tax sale.

Pages Related to Generational Properties



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