Tangled titles which are sometimes referred to elsewhere as “heirs’ property” can come about in several ways. In the most common scenario, the owner of record dies and a relative inherits the property but fails to record a new deed. The existence of a will, although helpful in obtaining a title, is not enough in itself; a tangled title can still result unless the will goes through the legal process known as probate and a new deed is filed with the city records department.
Residents of a home with a tangled title may go for years without knowing they have a legal problem. They often learn of it when they encounter financial trouble and find themselves shut out of resources that could help them.
How a title gets tangled?
A title can get tangled in one of five ways:
The necessary steps are not taken after the owner of record dies. This is by far the most common scenario by which ownership becomes tangled. When a record owner dies, the deed at the Department of Records continues to bear the name of the deceased unless the heirs take action. Establishing who has the right to the title is determined through a process called probate, which is guided either by a will declaring the deceased’s intentions or, in the absence of a will, by state inheritance laws. Depending on the circumstances, probate can be costly and potentially complicated especially when no will exists which is why some people, especially those with low incomes, don’t engage in the process. Costs include a probate fee, a deed recording fee, and inheritance taxes, with an attorney needed in most cases. And decisions must be made when a family is grieving and perhaps overwhelmed by all that must be done when a loved one dies. But until probate is completed and a new deed is recorded, the title remains tangled.
A rent-to-own agreement goes wrong. The title to a property can become tangled through a failed rent-to-own agreement, a method of home purchase sometimes used by people who are unable to secure a mortgage. The buyer agrees to make installment payments over a period of time while living in and caring for the house. The seller agrees to transfer the title to the buyer when the payments are completed. Entering the agreement gives the buyer a legal claim to the property, although the seller remains the record owner for the duration. If the seller fails to transfer a clean title to the buyer after the agreed-upon payments are made, the title becomes tangled.
The owner abandons the property. Sometimes, a landlord stops collecting rent or attending to a property, leaving the tenant to continue living in the home undisturbed, effectively assuming the role of property owner. If this condition persists for more than 10 years without challenge or permission from the record owner, the long-term occupant can make a claim to ownership under Pennsylvania law. This is known as “adverse possession.”
The transaction is not properly recorded. A tangle also can result from a deed transfer not being properly documented with the Department of Records. In some cases, the seller, after having taken responsibility for recording the deed transfer, fails to do so. By the time the buyer realizes what has happened, the seller could be unreachable or uncooperative resulting in a tangled title.
The deed is stolen. Titles can become tangled through deed theft also known as fraudulent conveyance, when a property is unlawfully transferred to a new owner. The perpetrator of the fraud either forges the record owner’s signature or coerces or deceives the owner into signing it away. This type of fraud often occurs when a property has been left vacant. By the time the rightful owner realizes that the property has been stolen, there could be new occupants who believe that they rightfully purchased the home, adding an additional layer of complication.