Sunday, October 4, 2009

Heirs Property

"Heirs property" is a special type of property found primarily in the coastal zone from Eastern North Carolina to Jacksonville, Florida.  In South Carolina, this area is called the Lowcountry, which includes Beaufort, Berkeley, Charleston, Colleton, Dorchester, and Georgetown counties.  The counties face intensive development pressures, as the demand for coastal property grows in tandem with rising real prices.  Heirs property is a problem today because the owners of this property have inherited it by intestate succession, instead of by devise under a will.  (Historical note:  The root of the title usually traces back to a single owner in the Reconstruction Era, when freed slaves were allowed to purchase property from the federal government.  At that time, this usually meant the least desirable property near saltwater rivers or marshes, areas most pre-Cival War landowners then avoided because of malaria fears and flooding.  Today, this land is incredibly valuable, due to the intense demand for waterfront property and high real estate prices.)

The practical problem with intestate succession is that in regards to heirs property, this usually means hundreds of co-owners or tenants in common--a pie sliced into hundreds of thin slices owned by hundreds of different co-owners.  Only some of these owners, however, actually possess the property, even though any one of them (and regardless of the amount of his or her interest or degree of attachment) can bring a partition action to force its sale.  (Usually, one of the co-owners transfers his interest to a developer by a quitclaim deed; the develper then seeks to partition.)  This often results with a family who has lived on the land for decades facing eviction.  Families in possession are often unable to afford the fair market value of the property to buy out fellow heirs, and face steep transaction costs in trying to find and negotiate with them--the assembly problem.  This is a problem that the Center for Heirs Property Preservation tries to solve. 

Although adverse posession might seem like a natural theory to help establish title in the families who have occupied and treated the property as its true owners, South Carolina appears to be in a super-minority of jurisdictions for two reasons:  First, South Carolina law precludes one family member from using adverse possession against another unless the one asserting the theory has attempted to oust other co-heirs.  As a practical matter, this won't work because the owners in possession believe they own the property, and usually don't know about the existence of other co-owners.  Second, for this same reason, hostility can't be proven, either.  South Carolina's appellate courts appear to recognize this problem, but so far have not squarely adopted an objective view of adverse possession that would make intent or ouster of unknown heirs irrelevant.  Until that occurs, the state of the title of heirs property will remain unclear.

Will Cook, Charleston School of Law

http://lawprofessors.typepad.com/land_use/2009/10/heirs-property.html

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Heirs Property: The True African-American Wealth
In recent years heir’s property has made front page news for primarily negative reasons. When land is sold many times, an adversarial situation is caused between family members because some in the family want to sell while others want to preserve the land for future generations. Still others just want a place to live. This sort of personal conflict in this day and age of reality TV makes for good drama. One thing that is not widely known with respect to inheritance is that in the Caucasian community, on average, each inherits $28,000 but in the African-American community the numbers are only $4,000 each. Why is that the case? Well one reason could lie with our heir’s property problem, which is unique to the African-American community. There are about 68,000 tracks of land in the United States; that is heir’s property equaling 8 million acres of land. Although it’s hard to place a value on it, I estimate it being worth about $150,000,000,000. That increases the average inheritance of each African-American by about $12,000. More can be found on this at www.heirsproperty.com

Posted by: Vanessa Brown | Sep 28, 2012 5:41:56 PM