According to a joint investigative report by ProPublica and The New Yorker, approximately 3.5 million acres of land (about one-third) owned by African-Americans is heirs' property.
What is heirs' property? Basically heirs' property is the result of land owners dying intestate - without a will - and the land passed on to next of kin. Through the generations, all of the descendants own the land jointly (tenants in common) and have a fractional, or undivided, interest. As the years pass, the fractional interest grows smaller and smaller as a new generation is added to the list of heirs.
Because there is no clear title, the land cannot be collateralized for bank loans. Owners are also prevented from receiving federal disaster relief and cannot participate in government programs such as the Farm Loan Program. Consequently, many owners found that others in the group could not or would not pay for taxes and/or upkeep.
Though most people believe that all of the heirs have to agree in order to sell the land, actually the opposite is true. One person in the group can force a sale or sell his/her interest to a speculator who can force a sale. Whether a judge forces a sale for taxes or a lone owner forces a sale, the sale is done quickly. Speculators take advantage of extremely low prices because the land is not sold on an open and competitive market.
After many years of this disenfranchisement flying under the radar, many recognized that this is a serious civil-rights issue that has lead to massive wealth loss for black families.
Thomas W. Mitchell, a professor at Texas A & M School of Law and the 2020 winner of the MacArthur Foundation Genius Award, is the author of the The Uniform Partition of Heir Property Law. The law passed in 2010 addresses some of the complexities created by heirs' property. Judges are now required to address additional problems besides economics, such as history and cultural identity. The goal is to keep the property together or partition the property to individuals; either solution culminating with full fee simple titles.
Under the new law, one person can no longer force a sale. If for some reason the property must be sold, the owners must employ a Realtor, have the property appraised, and place the property on the open market.
If you find yourself with a fractional interest in heirs' property, there a few things to keep in mind.
*Try to communicate with all of the people who have a fractional interest in the real estate.
*If you want to keep the land, be sure that taxes are paid and other financial obligations and regulations are met so that ownership is not put in jeopardy.
*If you want to sell the land, be sure to find a Realtor who will market your land and find a buyer who will pay the highest price for the highest and best use of the land.
*Most importantly, if you own real estate, be sure to write a will! Consult an attorney if you have any questions.
Land ownership has been proven to be the best way to create generational wealth. This is one of the reasons that the wealth of African-Americans is one tenth of the wealth of white families in this country.
"Under all is the land."
