Article on Receivership: Another Option for Partition of Heirs Property

Jesse J. Richardson, Jr. published an Article entitled, Receivership: Another Option for Partition of Heirs Property, 120 W. Va. L. Rev. 917-942 (2018). Provided below is the introduction of the Article.

The Appalachian landscape contains an inordinate amount of land owned as “heirs property.” Heirs property is highly correlated with poverty. This correlation results, at least in part, from the high incidence of neglect and abandonment of heirs property. This Article discusses the nature of heirs property and the negative consequences that arise in communities in Appalachia with significant amounts of land held as heirs property, including the significant role that this form of ownership plays in Appalachian poverty. A modified form of receivership is introduced as a possible solution of some of these properties.

The terms “heirs property,” “heir property,” and “property in heirs” describe a form of ownership where at least some of the owners have acquired the property through inheritance, usually without probate and with clouds on title from unknown heirs. Heirs most often hold property as tenants in common, given the acquisition by inheritance. Heirs property exists across the United States but pervades as a form of ownership in poor African American, Native American and Appalachian communities.

Heirs property raises two primary concerns: the vulnerability (or displacement) concern and the wealth (or efficiency) concern. The vulnerability concern involves the risk of being involuntarily stripped of property rights through a partition suit filed by another cotenant. The wealth concern refers to the fact that cotenants find it difficult, if not impossible, to access or utilize their share of the value of the property – by building a home, borrowing money against the property, or even by monetizing their interest.

Policy responses to heirs property have arguably focused on the vulnerability concern and the threat of partition suits. In particular, the Uniform Partition of Heirs Property Act (“UPHPA”), approved by the National Conference of Commissioners on Uniform State Laws in 2010, creates a separate partition process for heirs property. The UPHPA, however, has been criticized for creating barriers to the filing of partition suits and the subsequent consolidation of the interests in the property.
Finding adequate solutions for the problems presented by heirs property provides benefits for the owners of the property and for communities. Due to the issues presented by the nature of heirs property (the wealth concern), heirs property is likely to become abandoned and/or neglected. Abandoned and neglected properties present a myriad of concerns for communities in the United States.

Dissatisfied with common responses to abandoned and neglected properties, mainly code enforcement and eminent domain, several communities have turned to an old tool with some new twists: receivership. In receivership, a disinterested third party takes control of the management of the property and, in the case of vacant properties, either rehabilitates the property or conveys title to the property to an individual or entity with the means and desire to rehabilitate the property.

In addition to increased use of receivership, some states have developed other innovations to address heirs property and the issues arising from heirs property. Namely, some states have adopted adverse possession and forced sale provisions.

However, most of these efforts, and particularly receivership, focus on urban communities. Different solutions may be needed for rural Appalachia. Low population densities and “limited local economies” combine to “make it more difficult to put problem property to productive reuse.” In addition, “(1) limited resources and economic activity in rural areas, (2) rural cultural tendencies, (3) limited planning and legal frameworks, and (4) the variability of rural issues” suggest that rural solutions may differ greatly from urban solutions.

This Article briefly describes heirs property and the issues that arise with heirs property. The Article then describes the link between abandoned properties and heirs property. Receivership in the abandoned property context is described, using examples from a few sample jurisdictions. Finally, related innovations to address heirs property are discussed. The discussion focuses on whether particular urban tools are appropriate for Appalachia. The Author concludes with recommendations for state and local government action in Appalachia to allow easier rehabilitation of heirs property so that the properties can contribute to the economies of their communities and to Appalachia as a whole.

Although some suggest that receivership may not be appropriate for rural areas, a close examination reveals that receivership seems particularly well-suited to resolve heirs property barriers to economic development. Given the prevalence of heirs property in Appalachia, receivership, while not a panacea, may be an important part of an Appalachian revitalization strategy.