HEIR PROPERTY

The term “heir property” is not a legal term of art.  It is a phrase commonly used to describe the situation where, through inheritance, two or more people own a tract of land as tenants in common.  The doctrine of tenancy in common can be conceptually difficult.  Suppose a father has fifty acres and dies with five children,  leaving no will and no surviving spouse.  The five children are tenants in common with respect to the fifty acres.  They each own an undivided one-fifth interest.  They do not own ten acres each.  They own an undivided interest in the entire fifty acres as tenants in common.

The fifty acres in the above example is what is commonly known as heir property.  This can present both a legal problem and a practical problem.   Using the same example, suppose the five children die, each leaving three children of their own.  Now the grandchildren each own an undivided one-fifteenth undivided interest.  These fifteen co-owners may be spread out all over the country.  They may not have contact with each other.  If the land is not sold or otherwise disposed of, with each successive generation the problem multiplies.  I have seen situations where there are hundreds of co-owners of a piece of land, and they don’t even know the identities of all of their co-owners.

At this stage the land essentially becomes worthless, because, technically, all of the co-owners have the right to possession, but that is impractical.  This is not an unusual situation.  In the decades that I have practiced law I have counseled with over a hundred families who faced this situation.

Ideally, the family will come together early on and agree about a plan to dispose of the land or convey it to one of the heirs.  One or two could buy the others out or they could all agree to sell it and split up the money.  However, to achieve an agreed upon solution, it requires one hundred percent agreement.  This is not a situation where the majority rules.  Every single heir, or co-owner, has to agree.

In my experience, when heir property continues to exist for several generations, it becomes impossible, as a practical matter, to achieve one hundred percent approval of a plan to dispose of the land.  The heirs may not get along with each other.  They may have competing interests.  They may not even know of the identities or whereabouts of all of their co-owners.

In this situation the law does provide a remedy.  However, it is a solution that many people find distasteful.  A court of law can order a partition in kind or by sale.  Such a legal proceeding may result in the ownership of the land going outside of the family.  Many families don’t want their grandparents’ land or their great-grandparents’ land going outside of the family.

In a situation, however, where a court ordered partition becomes the only practical solution, this is how the law works.  Any one of the co-owners has a right, under the law, to petition the court to either divide up the land according to their respective interests, or to sell the land and divide up the money.  In order to divide up the land there has to be proof that the land can be equitably divided among all of the owners in kind.  This is very difficult to prove and in my experience, very rare.  The more heirs there are, the more difficult it is to prove that there can be an equitable division.  Any tract of land has different features that make it unfair to give one heir a parcel in the swamp and another one a parcel on the top of the hill.  Therefore, such a legal action usually results in a sale.

Conversely, in order for the court to sell the property, there must be proof that the land cannot be equitably, or fairly, divided in kind.  Once that is proved, then the court can order the sale of the property and divide the proceeds of the sale among the co-owners, according to their respective interests.  This is what is called a “sale for division.”  In these legal actions, the court has broad equitable powers.  It can order a public or private sale.  It can order the clerk of the court to auction off the property on the courthouse steps.  It can adjust the equities between the co-tenants within reason.  It can approve the payment of attorney’s fees as a common charge against all of the interests of the co-owners.

The law also provides a mechanism where a co-owner can give notice of his or her intention to buy out the others.  Once this notice is given (it must be given at least ten days before the trial) the court will order the property appraised and give that co-owner a chance to purchase the interests of the others based on the appraised value.

The laws relating to partition and sale of lands are designed to treat all of the co-owners equally and fairly.  The lawyers at Jinks, Crow and Dickson have extensive experience in handling these cases.  We continue to seek to give our clients the most thoughtful and excellent representation in these difficult matters.

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