Heir’s property (or “heir property”) is a unique concept that can create unique challenges for property owners and prospective buyers. As explained by the U.S. Department of Agriculture (USDA):
“Heir property refers to land that has been passed down informally from generation-to-generation. In most cases, it involves landowners who died without a will. Heirs’ property is land owned ‘in common’ by all of the heirs, regardless of whether they live on the land, pay the taxes, or have ever set foot on the land. . . . When a landowner dies without a will, the state decides who inherits the land. Over time, when land is passed down through several generations without a will, distant relatives who do not know each other could be co-owners of the same property.”
This co-ownership by distant relatives can create a number of issues. For the owners, this includes issues such as:
- Disagreements over responsibility for payment of taxes and other property-related costs
- Disagreements over who has the right to occupy the property
- Disagreements over how to use the property (i.e. whether to build a house or farm the land)
- Disagreements over when, whether, and for how much to sell the property
- Difficulty obtaining mortgages, home equity loans, and government assistance
- Difficulty selling due to lack of clear title
For prospective buyers, the lack of clear title presents issues as well:If you are not certain who owns the property, buying it can create a host of potential problems – and your buyer’s title insurance policy may not provide a source of relief. As a result, when a sale of heir’s property is proposed, it is generally in everyone’s best interests to clear the title to the land. So, what is the process for doing so?
Clearing Title to Heir’s Property in South Carolina
Today, a piece of land that is heir’s property could easily have dozens of owners. Since one owner’s interest in the property is divided equally among his or her descendants at the time of death, ownership interests can be held by family members across multiple generations, and these family members may or may not (most likely not) have equal ownership shares. Some of them may even be completely unaware that they own an interest in the property.
So, while dealing with multiple property owners is a challenge, in many cases, the first challenge is to simply identify all of the owners of the property. Keeping in mind that a transfer of ownership occurs any time one owner dies – and that some owners may have transferred their ownership interests by sale, will, or trust – piecing together the subject property’s ownership could present an enormous, and potentially insurmountable, burden. Of course, some situations are more complex than others.
In some circumstances, standard procedures for quieting title can be used to resolve issues related to the heir’s property. However, due to the complexity of the issues involved with heir’s property, special rules and procedures have been developed in South Carolina to help heirs and prospective buyers conduct transfers and make beneficial use of heir’s property. Depending on the circumstances involved, some of the potential options for resolving ownership issues and quieting title to heir’s property in South Carolina include:
1. Quitclaim Deed
A quitclaim deed transfers an owner’s interest in real property – whatever that interest may be – to the buyer. Unlike a warranty deed, which (as its name suggests) warrants that the seller has absolute right to transfer the property, a quitclaim deed does not come with any guarantees as to ownership. While this is not the ideal option for buyers under most circumstances, in situations involving the heir’s property executing a quitclaim deed may be sufficient to achieve the parties’ desired result.
2. Forced Sale
In some situations, it will be possible for a single heir or a group of heirs to obtain a court order forcing the sale of heir’s property. With this type of forced sale, the buyer obtains clear title to the property, and all of the heirs (not just those involved in the sale) are entitled to a portion of the purchase price based upon their respective ownership percentages.
3. Tax Sale
A tax sale is another potential option for clearing title to heir’s property. If the heirs do not pay taxes on the property as required, then the county may sell the property at auction. The Beaufort County Treasurer’s website provides a good explanation of this process.
4. Suit to Quiet Title
A suit to quiet title is a formal legal proceeding that is used to establish legal ownership of a piece of real estate when there are ambiguities, inconsistencies, or other issues in the chain of title. A suit to quiet title may be filed by an heir, multiple heirs, or a buyer seeking to confirm his or her acquired ownership interest in the subject property.
5. Transfer by Agreement
If all of the heirs can be identified, then the best option may be to negotiate an outcome that is agreeable to all parties. While heir’s property transfers to the owners’ beneficiaries at the time of death by default, this cycle only continues until an intervening transaction takes place. If all parties are in agreement as to how to use or dispose of heir’s property, then entering into an agreement can facilitate the establishment of clear title.
In any case, once the best path forward has been determined, the final step is to record the property’s transfer and ownership with the appropriate county records office. Not only is this necessary to formally establish legal ownership, but it will help prevent many types of issues in the future as well.
Questions about the Heir’s Property? Schedule a Confidential Initial Consultation
Patrick R. Watts is a Summersville real estate attorney who has more than 40 years of experience dealing with heir’s property and related title issues in South Carolina. If you have questions and would like to speak with an attorney, you can call 843-851-7050 or contact us online to schedule a confidential initial consultation.