Heirs' Property
Actions for Heirs' Property Owners
There are many actions that Heirs' Property Owners can take to mitigate the challenges that come along with owning heirs' property, each with varying resource and time demands. This page includes options for clearing a title and alternatives.
Heirs' Property - Clearing a title
Clearing a Title
Conducting a Title Search
A Title Search is when someone (ex. title company, attorney, or mortgage lender) investigates the history of ownership of a parcel of land. It usually includes an investigation and confirmation that the land is free from “defects” such as liens, easements, etc.
Title Review
A Title Review is when a real estate agent reviews and inspects a property's title history to authenticate ownership rights and any potential issues that the property title may have.
Securing Title Insurance
Title insurance is a form of insurance that covers and accounts for any issues with the title or potential claims (rights, damages, compensation, etc.) that the title search missed. There are two main forms of title insurance: Owner's title policy and lender's title policy.
- Owner’s title policy insures and secures the title owner against another party making ownership claims.
- Lenders title policy insures and covers a lender who has taken out a mortgage to pay for the property and has an existing mortgage lien.
Deed of Reconveyance
A Deed of Reconveyance is the document a mortgage borrower receives from the mortgage lender after the loan has been repaid completely. This can be used by identified successors of interest (legally confirmed heirs) if they've taken over an existing mortgage from the deceased, obtained a mortgage loan modification that put the mortgage in their name, and then paid off the existing mortgage of a property.
Quitclaim Deed
Quitclaim Deed is a type of deed that transfers property ownership without investigating the property's title or accounting for any issues with the title to that property. This means that the property could potentially have liens, ownership disputes, boundary disputes, etc.
Quiet Title Action
Quiet title action is a legal tool used to resolve any disputes over property ownership. It works to secure and administer the rights of a property owner with a clear title, which is a title to a property that doesn't have any disputes about the legal ownership of the property. There are two types of Quiet Title Actions: uncontested quiet title action and contested quiet title action.
- Uncontested quiet title action is a quiet title action that doesn't have any ownership disputes.
- Contested quiet title action is a quiet title action that has ownership disputes.
- How can I initiate a quiet title action to clear title on the land? North Carolina guidance for probate-related title issues
Heirs' Property - alternatives
Alternatives
Affidavit of Heirship or Heirship Affidavit
An Affidavit of Heirship or Heirship Affidavit is a sworn statement identifying the heirs who inherited a piece of real property. It is often used to document new owners of property when the decedent died without a will (also known as intestate).
- Pros
- Good way to avoid having to go through probate
- Acts as a supporting document for streamlining title transfers
- Cons
- Not truly recognized in NC by buyers and title insurers
Clarifying a Title
Clarifying a Title includes clarifying the named owners of a property and the percentage of ownership over the property they have.
- Pros
- Can prevent future ownership disputes
- Makes title clearance easier
- Less costly
- Cons
- Doesn’t clear the title, just clarifies who is on the title and how much they own.
Adverse Possession Claims by Co-Owners
Adverse Possession Claims by Co-Owners is a way to legally acquire ownership of a property without compensation by occupying property for a duration of time. There are two main types.
- Actual Ouster “occurs when a co-tenant claiming sole ownership takes some action that shows clearly and openly that they will not honor their co-tenants’ rights. This can include changing locks, denying entry, or similar actions that prevent their co-tenants from using the property” (Miller, 2024)
- Constructive Ouster "does not require taking a real action to exclude others from the property; instead, it allows an adverse possession claim to succeed if in addition to proving all the elements of an adverse possession claim the co-owner can prove that no other co-tenants have made any demands for “rents, profits or possession” for at least 20 years.” (Miller, 2024)
Partitioning or Partitioning Action
Partitioning or a Partitioning Action is when two or more people own the same property and one of the owners chooses to force the sale of the property through a court decision. Any owner (even a minority owner) may force the sale. This can cause the loss of generational wealth and property, financial instability, and incur high legal costs associated with attorneys and court proceedings. It is highly recommended that heir property owners work to resolve any disputes outside of partitioning and only use the partitioning action as a last resort. Often, the threat of legal action may push co-owners to sell or donate their portion of a property to avoid lengthy court hearings and costs. There are three main kinds: Partition by Kind, Partition by Sale, and Partition by Appraisal.
- Partition by Kind: The singular property is divided into separate parcels according to each co-owner's ownership share. It is primarily used for large amounts of land without development due to practicality and feasibility.
- Partition by Sale: If a property can't be divided, such as developed or residential property, it is sold and the proceeds are distributed between co-owners according to their ownership share. The sale typically happens through a public auction or court-supervised sale.
- Partition by Appraisal: When co-owner seeks to buy out all of the other co-owners' ownership shares, the property is appraised and then sold to the singular co-owner at the appraised value. It requires mutual collaboration and is preferred because it avoids the costs associated with public auctions, which can diminish the overall gains of a property sale.
