Legal, financial and familial risks
As heirs’ property is passed down and as each inheritor has a family of their own, the number of inheritors increases with each successive generation, causing several legal, financial and familial problems, including:
Heirs face an increased risk of forced sale and eviction, as any co-tenant can petition for partition and force a buyout or sale, which can result in families becoming alienated from one another. For example, a family member with little or no connection to the land and may have hopes for a big “payday” from land speculators or others who wish to purchase the property forces a sale.
Heirs cannot sell, mortgage or lease the heirs’ property without the agreement of all heirs; they can only sell or mortgage their tenant-in-common interest in the property, usually at a huge discount. They may not be able to apply for loans using the land as collateral or to qualify for loan modifications and other loss mitigation programs when facing foreclosure.
Heirs may not be able to qualify for most government programs or secure financing for needed repairs for their heirs’ property, making it more difficult to maintain or improve the property. They also may not be able to participate in government programs, including loans and disaster relief programs offered by USDA, HUD, FEMA and other federal and state agencies.
Heirs may sell or gift their interest during their lifetime without the consent of their fellow co-tenants, making it easy for non-family members — including real estate speculators — to acquire interests in a family’s property.
Heirs may not be able to qualify for conservation-use tax reductions, homestead exemptions or other property tax exemptions.
Heirs cannot protect the property through a conservation easement without the agreement of all heirs.