Stephanie: Welcome to Housing Unlocked, the NC Housing Coalition’s new limited series where we break down complex housing topics and explore advocacy work happening across the state to make housing more affordable and equitable.I’m your host Stephanie Watkins-Cruz, Director of Housing Policy, and today is Part 2 of our discussion about heirs property.
In Part 1 of our discussion, we explored what heirs property is and spoke with Legal Aid of North Carolina about increasing access to disaster recovery resources for owners of heirs property.
Today, we speak to Annette Hiatt, Senior Staff Attorney at the Land Loss Prevention Project, about working with clients who own heirs property to preserve and maintain their family land, and about what owners of heirs property can do to prevent future land loss.
Stephanie: Hi Annette, thank you so much for joining us today and agreeing to have this conversation. I wanted to get started and ask you to tell us a little bit about the Land Loss Prevention Project.
Annette: Good morning and thank you so much for letting us join today. The Land Loss Prevention Project (LLPP) is a nonprofit law firm that was founded more than 40 years ago by the North Carolina Association of Black Lawyers out of their concern and desire to provide direct legal assistance to landowners that were faced with the loss of their property and unable to afford private counsel.
We provide direct legal interventions with low-income landowners on mortgage and tax foreclosures, partition defense, general property issues like easements and boundaries, and we work to provide estate and succession planning services. We also work with small farmers on matters like credit access, the development of farm leases, and to establish food and farm business entities and nonprofits. We also spend time working directly with community-based groups to provide workshops on estate planning, foreclosure prevention and heir property, and we also do collaborative policy work on the federal, state, and local level,
Stephanie: Wow. So, a little bit of everything. And very, very important work. You mentioned a few times estate planning, and you mentioned heirs property. Could you talk a bit about in your work, how heirs property shows up?
Annette: Yeah, thank you. LLPP works across the entire state of North Carolina, and we’ve worked on hundreds of matters involving heir property over the last few years, even. It’s integral to our mission of stabilizing land tenure across the state. We often see our property matters across our practice areas, whether they’re related to active efforts to protect and retain land from the threat of sale, or in our work to enable full use of the property for farming or other community development purposes. For example, if we’re working with a homeowner to prevent a foreclosure, there are special federal laws that protect the rights of successors and interests, or those folks that own the home after the original borrower passes away when they’re trying to take over the payments on a loan. So, we cover everything,
Stephanie: And what would be the most common cases or issues that you see?
Annette: I break down our work into two main categories. The first is efforts to respond to an imminent threat of loss, and the second [is] a more proactive approach. As it relates to the more emergent and time-sensitive issues, we see heir property commonly with partition defenses and then those mortgage and tax foreclosures. For the second group of matters, we work to support the efforts of co-owners to determine ownership of land and to create a strategy for managing it going forward. This includes exploring access to credit, entity formation, and, again, estate planning.
Stephanie: In the first category you mentioned “partition defense.” Can you break that down for our non-lawyer listeners?
Annette: Sure. Partitions are a legal action that any co-owner can bring with a Clerk of Superior Court in their county. So when they own an interest in property, they can go to the court and say that they cannot manage the property together with the other co-owners, and they will ask the court to either physically divide the property or hold a sale of the property. And so each co-owner has an opportunity to kind of be a part of that process, and often we involve and engage with the owners that want to protect the property, but also just to make sure that they have a voice in the process and kind of understand what’s happening.
Stephanie: And another follow-up, in a partition case, if there’s a co-owner involved that isn’t willing to go through with the partition, what happens? Could you give a few examples of what you see in those cases?
Annette: That’s actually a really hard question. So, the underlying thing that has to happen in a partition is to ensure that all the co-owners have been named. So, the very first part has to do with identifying the full scope of ownership, and then the law says that you cannot have a sale of the property unless it is inequitable to divide it. So, what we use as an example sometimes is, if there are 10 acres and 50 people that own the property, it’s not feasible or equitable to divide the land in-kind, which is a physical division of the property. And so then the court would likely order a sale.
And so, if a person says they’ve gotten a partition document in the mail from the court saying, you know, “there’s someone bringing a partition action for this property,” and they don’t agree, the best thing to do is to work with an attorney to submit an answer so they can be part of the process, to understand the process. There may be room to purchase the interests of the folks who are trying to sell the property if it’s a partition by sale. But no matter what, being engaged with the process is important so they understand fully what’s going on.
Stephanie: Absolutely. And so it sounds like this gets complicated really quickly. We want to look at heirs property matters from a generational wealth-building perspective. How would you say this matters when it comes to generational wealth-building?
Annette: Yeah, I think that’s a really important question, and a consideration. I think it’s important to first examine some of the underlying disparity in homeownership that already exists. According to the US Census, there was a 30% gap in homeownership between white and Black households in North Carolina. As it relates to the amount of land owned as heir property, it’s sometimes hard to identify because of the various ways that it’s listed in individual counties. But Fannie Mae released a study last December, prepared with the Housing Assistance Council, and it showed that North Carolina has more than 72,000 parcels that are likely heir property with a value of more than $5 billion. So it’s important to understand kind of the extent of what heir property … how much there is. Co-owned land has an almost automatic barrier when it comes to wealth-building, because when there’s property that’s owned by a single owner, whether that’s an individual, a couple, or even an entity, there’s a difference in its treatment to co-owned property. It’s difficult for our owners to access credit or utilize the property as security for other kinds of credit when there are multiple owners, let alone generations of owners. So heir owners face a hurdle in simple matters related to home improvement, or [for example] the sale of timber on a larger parcel if all the owners aren’t identified on a single deed document. Not being able to make use of the property is a barrier to building wealth, clearly. But there’s also a risk of predatory actions causing a complete loss of ownership in the partition that we just discussed in that any single owner can sell or give away their individual interest. And the risk here to the remaining family owners is that an outside owner acquires that interest, maybe even at less than market value, and then attempts to force a sale through a court process that we just discussed.
Stephanie: Wow. Can you restate that number again? You said the Fannie Mae report with the Housing Assistance Council [found that there are] 72,000 parcels [of heirs property in North Carolina] with how high of a value?
Annette: So they break it down into “likely heir property,” which is the highest number. $5 billion. It’s $5 billion.
Stephanie: It’s $5 billion?
Annette: Yeah
Stephanie: Wow
Annette: Yeah, it’s a lot.
Stephanie: And what does this work around heirs property look like when you’re working directly with clients? Could you talk about some of the goals and misconceptions that you discuss when you’re working with clients?
Annette: Yeah. Um, so our work with heir owners takes a lot of forms, some that I highlighted already. But in general, our direct client work is to assist landowners to protect their property, whether that be related to access like easements, understanding boundaries, developing farm lease agreements, or even affirmatively challenging a potential loss through a tax or mortgage foreclosure. In each of these kind of things, we work directly with our heir owners. It just becomes a little more challenging, because there are multiple owners that really need to agree on the process and desired outcome.
Sometimes you have family members that want to go in different directions with the property, they have different connections with the property. And it takes a little time and a lot of good communication among the family. It’s really even…it’s totally separate from our work. It’s a family relationship, so that those folks can determine what they want to do with the property.
Stephanie: Yeah, that, I could imagine that could get even more complicated for the more people that are involved. What are some of the misconceptions that people have around heirs property?
Annette: I think one common misconception around heir property is that if you pay all the taxes, you will own the property. Unfortunately, because of the number of owners, sometimes, some individuals who have an interest in the property don’t live near the property. And so, the burden of paying the taxes sometimes falls on one family line that may be local, and, you know, they may have done a lot of work trying to organize and pay the taxes and to keep up the property. And because of the way co-ownership works, they have some right to get those proceeds, you know, what they’ve paid … more than their share. They have a right to collect that back from the other co-owners. But sometimes it is kind of an unresolved thing because they work for many years, someone steps into a role that their parents held, and it becomes kind of, they feel more deeply connected to the property. And so then coming back, maybe a generation later, and saying, “Well, actually, there’s all these folks that own the property together,” can be challenging to recognize the work that people have done to protect the property, but then to make a plan going forward, to manage the land together. So, it takes a little time.
Stephanie: Right, so even if there’s ownership activity or roles being taken on in real-time, that doesn’t translate to legal ownership as a status?
Annette: Correct. That’s a great summary.
Stephanie: Have you seen any families, or worked with any families, who had interesting tactics to talk to each other as heirs? Or do you have any examples?
Annette: Yeah, we’ve seen families use a variety of means to gather together, to develop a common understanding around the land. Family reunions, local meetings with food, regular Zoom calls to gather everyone despite, you know, locations. Where people live in different places. I have seen that more recently being really effective. It’s a powerful opportunity to recognize family legacy related to the original purchase of the property, you know, sometimes dating back to the late 1800s, the early 1900s. It’s a tremendous legacy, but as well as a time to create a structure to make decisions. Some families even create a process before they get to us even, to have a representative from each family line that will engage in decision-making and information sharing, kind of like a board. So, I think families know how to do this, and they’re doing it already. It’s just that when we get involved, we kind of create and help direct the structure a little bit.
Stephanie: I want to move into talking a little bit about how individuals, families, but also organizations and advocates could act in these cases. And we want to provide resources for our listeners. And it doesn’t necessarily have to be, you know, direct advice. But if someone is seeking more information or advice about heirs property, where should they go and what might be some things that you would say to them, or where would you point them?
Annette: Sure. There’s some really strong resources in North Carolina related to the management of heir property. Of course, we host outreach and education sessions across the state, in addition to our direct client work. And most of the nonprofit legal services providers in North Carolina also work directly on these issues. In addition, Wake Forest University now has a law school clinic focused on heir property, and there are lawyers–private attorneys–across the state that are participating in a network called the Heir Property Practitioners Network, where they kind of gather and discuss how heir property management, partitions, and all of those kinds of mechanisms work, maybe even in different states.
Related to technical assistance, I think the Black Family Land Trust, the Sustainable Forestry and Land Retention Projectthrough Roanoke Electric Cooperative, Resourceful Communities, and Cooperative Extension have all increased their capacity to work directly with individuals trying to determine what to do with heir property and how to manage it.
There’s also the North Carolina Agricultural Mediation Program, which is a program that provides free mediation services. It’s based at Western Carolina [University], but it works across the state on agricultural farm issues, but also on the management of heir property.
Stephanie: Wow, that definitely sounds like a very robust ecosystem.
What can some organizations in the housing ecosystem do to contribute to being a part of mitigating impacts of heir property issues in their own communities?
Annette: I would say, to empower and encourage owners of heir property to keep working to protect the land. Also to advocate for policy change. But ultimately, knowing that there are resources out there that can help owners know what their options are and to develop next steps.
I would love to see us all change our messaging about heir property. Heir property is not, ultimately, a problem. Despite risks and barriers, heir property isn’t a bad thing. It represents generations of landowners that have preserved the land. It tells a story. I don’t think it represents a failure. It’s an opportunity to bring people back together.
As it relates to policy, I think having policy that recognizes heir property as a valid form of ownership, and its owners being recognized as they move to improve, protect, or utilize their land. Expanding recognition to include heir ownership for programs that are vital assets, like grants, home repair, loan modifications, and tax reduction programs.
Stephanie: I love that reframe. I think it’s often really easy to talk a lot about the consequences of, you know, the worst-case scenario when it comes to heirs property, but that’s really beautiful. It does tell a story, and it does talk about the way generations are connected, and how we’re connected to lands in general. And even though it may come from a sad reason, right, like the loss of a loved one or the loss of a relative, definitely there’s a big opportunity to recognize legacy, and I think that has a lot of value in and of itself.
Annette: Yeah
Stephanie: My last question to you: Is there anything else you would like our listeners to know, or things that you think are important for us to be aware of as we move forward with now a better understanding of this topic? Not this issue, right? It’s not an issue, but this topic.
Annette: Yeah. I think knowing that there are options would be my biggest message. Even if you don’t know where to start, even just putting together a family tree is a great place to start with the folks who know that information the best. Get them together, have a family meeting, try and see what you can do to make sure that that piece that is held by the family is kind of written down on paper so that you know what, when you go to an attorney, if you go to an attorney, you know who should be at the table. Start gathering those ownership documents.
I think the second, or maybe the first, depending, is to make sure that the property taxes are up to date. There are certain things that are within our control. You know, there are programs to reduce taxes, whether, depending on the use of the property. There’s present use value programs for farmland, forest land, horticultural land, and then there [are] some [programs] if there’s a primary resident that is living in a home that’s elderly or disabled, that people might still be eligible for, even if it’s heir-own. That can be a little complicated. But you know, I think there are things that can be done even immediately, to protect and preserve the property from imminent risk, while the family is moving forward, determining the long-term strategy.
Stephanie: Before we close, I have a little bit of a surprise. I have three really simple rapid-fire questions that are not heirs property-related. Are you open to answering these rapid-fire questions?
Annette: I’ll do my best [laughs]
Stephanie: Okay, first one, what is your favorite color?
Annette: Blue
Stephanie: What is the best meal that you have had this year?
Annette: Oh! It would be a toss-up between going to the family of my sons and having food with them, because it’s all cooked together in a big, big environment. And then between that and our vacation a couple of weeks ago, we spent some time planning to go on a trip to Alaska. So having salmon from Alaska.
Stephanie: That’s really cool. I’ve always wanted to go to Alaska.
Last rapid-fire question: Who is your favorite superhero? Or what superpower would you love to be able to have?
Annette: Oh, that’s tough [laughs]. I think I’ll have to stick with superpower. I would love to be invisible for short periods of time.
Stephanie: That would be very convenient. I totally understand.
I think I would love to read people’s minds, because these days, you just never know.
Annette: You never know!
Stephanie: I would want to be able to turn that off, though, because, you know, [I] don’t need to know everything.
Annette: [laughs] Agreed
Stephanie: Annette, thank you so much for joining us today. I really appreciate your time, and having this conversation has been really wonderful and eye-opening for me. So, thank you.
Annette: We appreciate you all’s work and for letting us come today. Thank you so much.
Stephanie: And that was Part 2 of Heirs Property Unlocked. Thank you again, Annette, for sharing with us. You can learn more about the Land Loss Prevention Project at landloss.org.
Stay tuned in October for Part 1 of Property Taxes Unlocked, where we talk to longtime community advocates about grassroots organizing to make property taxes more equitable in North Carolina.
In the meantime, you can view the transcript for this episode at nchousing.org, or listen wherever you get your podcasts.
