We regularly explore racial fairness issues in real estate. So it’s gratifying to find the topic noted in the international press.
In addition to what this story tells us about Detroit home buyers’ struggles, it also points out why your name on a deed is not the same as your name on a title.
In most cases, the conveyance of a deed does represent a valid transfer of title. But not always. Let’s take a look at the story.
Title, She Wrote
In 2016, a struggling writer named Anne received a house deed from a Detroit nonprofit called Write a House. The group was buying land bank houses and giving them to writers, to support the arts in Detroit.
Anne moved into the home. It needed a new roof. Overwhelmed, Anne decided to put the house on the market two years later. But there was a very big glitch. Another Detroiter, named Tomeka, was on the house’s title. That’s right. The deed was transferred to Anne – but the title had remained in Tomeka’s name.
Legally, Anne had no right to sell the house. The nonprofit, well-meaning as it was, had evidently lacked the expertise to clear the title. By the time Anne was trying to sell, the nonprofit had disbanded.
What a mess! And the problem actually began before the nonprofit got involved — back when the county foreclosed on the home and deeded it to the land bank without resolving the title.
So, before we continue reading this story, let’s break down the difference between a deed and a title.
Deed, Title: What’s the Difference?
A deed is a document that represents the transfer of title, and title is ownership. A homeowner needs the title as well as the deed.
Here’s how each one works:
- Deed: A deed is a legal, written document. It represents a specific activity: the passing of a title from one owner to the next. The person who wants to transfer the property rights, called the grantor, signs this document over to the recipient, called the grantee.
- Title: Taking title to a property means taking ownership and responsibility for the property. Titles can belong to individuals, couples, or groups, or by LLCs, corporations, partnerships, or other organizations.
In short, while the deed is the official document representing a transfer, the title is ownership itself. This is why the standard closing process depends on a title search. The search explores the title’s history, and the claims and burdens affecting it.
A title abstract, informed by the title search, demonstrates whether the property has a clear title. When this work is done, a person receiving the home knows it comes from someone who really holds the right to transfer the property, regardless of what the current deed says.
The Ghost of Taxes Past
Tomeka, a Black woman and second-generation Detroiter, once bought the very same home out of foreclosure for $700. She was a renter who wanted to become a homeowner. Her new home had property taxes due, left unpaid in 2009. The foreclosure process didn’t wipe out that debt.
Her seller was open about the unpaid taxes. The seller had bought the house from a bank in 2009 for $1,000. The home’s earlier owner, a Detroiter of Bangladeshi ancestry, was washed out by the finanical crisis.
Tomeka set up a payment plan with the treasurer of Wayne County, which includes Detroit. What fell through the cracks? The old tax bill for 2009-2010: about $4,300. A very high number considering that the county assessment for the house was less than $18K.
The office didn’t flag that bill when Tomeka dropped off her own property tax payment.
Throughout 2010 and 2011, Tomeka kept renting, while making trips to repair the house. She refinished the floors, but there were many repairs still left to handle in 2012, when Wayne County foreclosed on the home. Tomeka says she never received the official notices. In any case, she’d only had the title for two years. The county deadline to avert foreclosure is three years. What was Wayne County doing?
The Pain of a Quieted Title
The county seized the home and deeded it to the land bank. And five years after Tomeka bought her home for $700, it was sold for $5,000 to Write A House — though she still owned it.
In 2016, Write A House gave the home to Anne, who ultimately needed to give it up.
But how? What does a person do when it’s time to sell, but there’s a title issue?
Sometimes, they track down whoever has the prior claim on the title. They ask the party to sign a quitclaim. But Anne didn’t know how to find or negotiate with Tomeka.
☛ If past mortgage payoff or tax payment records cannot be found, a resident might need to bring a quiet title action to clear a home’s title. This often occurs with properties bought from foreclosure or estate sales.
Anne proceeded to use a service called QuietTitle.com. She explains for The Guardian readership how the service works:
For a set price ($1,200 back in 2018) and in lightning speed (90 to 180 days), clients are guaranteed a squeaky-clean title and uncontestable ownership of a property.
Anne writes of the quiet title action as “inherently violent.” Tomeka resisted it at first, Anne would learn later. But she finally caved to the pressure and signed her title away.
What Are “Dignity Takings”?
Thousands of people in Detroit live in inexpensive housing with illegally high property taxes, Anne reports. When they default, the houses often get snapped up by investors who later evict their renters. Black women are, statistically, the most frequently evicted.
Early on in the pandemic, the federal government assisted both homeowners and renters. Now, both foreclosures and evictions are rising again.
The Coalition for Property Tax Justice aims to stop unlawful property tax assessments, suspend wrongful foreclosures, and compensate already-foreclosed homeowners. The Coalition is working with the Detroit City Council on a compensation plan. The draft plan accuses the city and county of dignity takings. That means governments are taking homes, destroying intergenerational wealth, dehumanizing residents, and breaking up communities.
Will the Story of Anne and Tomeka Be a Catalyst for Change?
The Coalition for Property Tax Justice is working on making compensation available from Detroit, for people whose homes were foreclosed at any time since the financial crisis. This compensation may include jobs, assistance for small businesses, and offers of land bank property or rental vouchers. Whatever results from this work could inform other cities across the country.
The story is also a warning for anyone who accepts real estate apart from the standard mode of buyer-seller transactions. Please have your title checked. If you have case-specific questions about your legal ownership status, don’t wait to call a real estate attorney near you and set up a consultation.
Supporting References
Anne Elizabeth Moore for The Guardian: I Was Given a House for Free – But It Already Belonged to Someone Else (Oct. 18, 2022; published in partnership with Bridge Detroit as well as the Economic Hardship Reporting Project).
And as linked.
Photo credits: Suzy Hazelwood and Andrea Piacquadio, via Pexels.