Deeds in Disarray: Untangling Titles Passed Down Informally

When homes are passed down without a will, legal ownership can become questionable. Claims to the title can tangle. This happens most often in households of modest income (many who couldn’t afford probate). Loss of the home title, of course, pushes families into still harder situations.

Indeed, a number of factors could keep households from preserving a chain of title through the generations. Here are some frequently asked questions about homes kept in families without the benefit of paperwork.

What Happens if No One Formally Transferred the Home?

Tracing a chain of title becomes chaotic. Without clear ownership, a resident can run into trouble when trying to apply for secured loans or available tax breaks.

Then there are the disaster funds that people can’t get, as they live in informally passed “heirship” homes. Fannie Mae has reported on the way the insurance industry, FEMA, and various disaster assistance programs are off-limits to them.

Homeowners dealing with damage to their homes could be completely sidelined by tangled titles. See our exploration of this problem in Not Entitled? Owners of “Heirship Properties” Locked Out of Disaster Relief.

In any case, without the deed, no one has a clear right to sell the home. Heirship titles occupy a kind of legal limbo. Without clear ownership, heirship properties can lose value due to lack of necessary upkeep and insurance. Some wind up in property tax foreclosures. Others get lost to companies that exploit disoriented families. Some are lost forever from the family that grew up in them.

Is This Hard to Clear Up After the Fact?

Once the tangled claims exist, fixes are very expensive. To untangle a title takes a legal action in probate court. This could involve a legal services team diving into the probate process, with a folder of land records that point the way to clearing up the deed and saving the family home.

Meanwhile, there’s the task of figuring out how the property should be divided or shared.

Often, potential heirs don’t agree on a clear way forward that suits all interested family members This needs a resolution — just as the legal work does.

Isn’t Someone’s Name on the Deed, Though?

Yes. But that someone could be a deceased elder who never legally transferred it to the next generation of occupants. In a few cases, there is an obvious heir but that person is still a child.

If the deceased had more than one child, but never planned for the legal deed transfer, all the kids are heirs. None are on the deed, so it’s unclear who has the right to occupy or sell the home. When those children have their own kids, a tangled web has formed. Who owns what portion of the value? How can they prove it?

Estate planning is for everyone! Schedule some time to name the next legal deed holder. Clearly name the person who will receive your home. Or maybe you want your representative to sell your home and divide the proceeds. Either way… Say it in your will.  

How Common Is This Problem?

Half of us haven’t written our wills. So, quite a few deeds are at risk! Some cities, including Detroit, have thousands of heirship properties. In Wilmington, Delaware and in Philadelphia too, homes have often passed informally among relatives. According to the Pew Charitable Trust, Black families have the most trouble with tangled titles — for a clear reason. Over generations, the probate courts were off-limits to racial minorities.

Financially struggling people are also commonly impacted. More than 1% of deeds in counties with persistent poverty will not have been legally transferred. More than 4% of properties in Alabama and over 10% in West Virginia, mostly in rural areas, could also be heirship properties.

In all of these cases, someone has to pay the property taxes and take care of the home — but without legal control of the real estate.

You’re named in the deceased deed holder’s will as the next homeowner. Does this mean everything’s done? Heads up! You have to go through the proper steps.

Is Anybody Working on This?

A group doing hands-on work in this area is the Delaware Community Reinvestment Action Council. This nonprofit based in Wilmington has been helping heirs since the 2008 foreclosure crisis. At that time, many people lost their homes on account of a lack of legal documents.

And a new initiative to fix and prevent the problem exists in Detroit, Michigan. The Federal Home Loan Bank of Indianapolis is stepping up for its Michigan neighbors. The bank funds a grant to help 25 households with clouded titles. This same initiative is supporting hundreds more with access to free estate planning help. (There’s no income cap.)

In Maryland, there is the Maryland Volunteer Lawyers Service. The group’s tangled title initiative currently assists mainly Black and working-class seniors. With legal assistance, it can be possible to transfer a tangled title to one or more of the relative’s names. But as readers now know, this will often require courtroom appearances.

Finally, Can Governments Do Anything to Help?

Yes. And there are some very simple ways. Governments can make processes and records available free of charge. Access to paperwork that demonstrates ownership makes it easier for people to keep their homes.

This is why the Maryland Volunteer Lawyers Service has asked the Maryland State Archives and Gov. Wes Moore’s administration not to take away free online access, as the state is ready to do. A lack of free document access will make it even harder for struggling families to hold onto their homes.

Margaret Henn, deputy director of the Maryland Volunteer Lawyers Service, suggests:

One simple fix could be allowing free access to land records for people who only need to look up a few documents each month. These users would more likely be everyday individuals, not big businesses.

Philadelphia’s government has shown one more way to assist the cause. Funeral homes in Philadelphia must, by law, give surviving relatives a clear, step-by-step guide for transferring the deed to a home through the local probate process.

Many hands on deck can strengthen communities. All governments need to have this issue on their radar.