Heirs' property refers to a type of tenancy in common in which multiple owners obtain undivided, fractional interests in real property. It often occurs through intestate succession and can leave heirs with clouded titles and unstable property ownership. Tenancies in common have no rights of survivorship; when a cotenant dies, their interest passes directly to their heir(s). All cotenants enjoy the same rights to enjoy and possess the property, but do not share any equal obligations for property maintenance. The lack of clear title and fractioned ownership limits the ability of an individual cotenant to sell, improve, renovate, and repair the property or use it as collateral. (1) Studies have shown that heirs' property issues disproportionately affect African-American households, particularly in low-income communities. (2) Much of the research has focused on rural landowners and the risk of land loss, and it is noted that this problem is especially prevalent in the southeastern United States. (3) There has been less discussion on the issue in nonrural settings, where it can be especially problematic, as many land parcels are small and, thus, difficult to meaningfully divide. (4)
This article describes the status of heirs' property in Florida and its disproportionate impact on low-income communities of color, illustrated by an example from one county in North Central Florida. It details the problems that can arise for homeowners as a result of heirs' property. Finally, it outlines preventive, corrective, and legislative measures to address the issue.
Heirs' Property in Florida
In the U.S., each state determines its own probate and intestacy rules. Invalid wills can be particularly problematic in a strict compliance state such as Florida, which requires witnesses and attestation clauses while disallowing oral and holographic wills. (5) With an intestate estate in Florida, when there is no surviving spouse of a decedent, real property is distributed per stirpes to heirs as tenants in common--the default form of co-owned property. (6) If there is no immediate heir, a share follows equal interest in patriarchal and matriarchal lineal descent. (7) Unless the court partitions the property, or the heirs come to an agreement to divide the property, each heir has a right to use the entire property. The problem becomes increasingly complex as more generations pass and heirs beget heirs, which further divides the property.
Many protections are available to heirs who inherit property through a will, but not to those who inherit property through intestacy or invalid means such as informal gifts, oral or holographic wills, or wills that do not comply with state law. Yet creating a will can be a complex endeavor requiring legal knowledge or the means to afford legal assistance. (8) Because of this cost, intestacy is often associated with poverty and, according to one finding, "where pockets of poverty and low education persist, the economic and social effects of the laws of intestacy are likely to be relatively widespread and intense." (9) With all the restrictions on heirs' property, it is no surprise that absentee ownership, low land value, lack of recent sale information, and lack of current improvement information tend to signal a property is owned by heirs. (10)
The effects of intestacy on low-income communities of color can be illustrated by the case of Alachua County, in North Central Florida. According to the U.S. Census, Alachua County had 115,541 households as of July 1, 2016, and 53.7 percent of these are owner-occupied. (11) A search at the Alachua County Property Appraiser's office indicated there are 1,610 heirs' properties (2.62 percent) in the county. (12) A map of southeastern counties compiled by the Federal Reserve Bank of Atlanta designates those with rates of heirs' property of more than 2.41 percent as those at the highest risk. (13)
A preliminary search of the Alachua County heirs' property revealed that 833 are in Gainesville (population 131,591); 156 in High Springs (population 5,941); 140 in Hawthorne (population 1,525); 113 in Alachua (population 9,893); and 275 are in other areas of the county. Further examination of the 833 heirs' properties in Gainesville revealed that the areas with the highest impact are several historical working-class, predominately African-American neighborhoods located east or near the east side of town, close to the downtown area. A neighborhood was found to have been highly impacted if the heirs' properties in that neighborhood exceeded 2 percent of the total heirs' property in Gainesville. (14)
Potential Consequences of Heirs' Property
Problems can arise with heirs' property when there are familial disputes over what to do with the property. If one heir wishes to mortgage, sell, or rent out the entire property, they must obtain consent from all of the other heirs, yet an heir can sell their individual interest, even to an outsider, without the consent of other heirs. (15) Even if there are no disputes over the property, some heirs may be unaware of their ownership interest or be difficult to locate, placing restraints on the property rights of all other heirs. Banks and lenders will not accept fractional interests of tenancies in common as collateral to secure a loan or mortgage. (16) Title insurance companies also require clear title for insurance purposes prior to a sale and heirs' property is not considered clear until all heirs consent to the sale. (17) This also becomes problematic if one heir wants to buy out the other heirs but cannot secure the funds because mortgage companies often will not accept a fractional interest as collateral even in a partition sale. (18) The Uniform Law Commission (ULC) has recognized that this problem may lead to heirs becoming homeless if they are forced to sell the property and are unable to secure the funds for a buyout of the other heirs' interests. (19)
Other common problems are dividing the responsibility for property taxes and maintenance and obtaining financing for renovations and repair. Low-income heirs may have difficulty paying taxes and maintaining a property. (20) Under Florida law, heirs pay their share...