Filling vacant properties might seem at first to be an easy, obvious way to put more people into houses. But while there are times when vacant properties are owned by investors who could readily fix them up and make them habitable again, there are others when properties are vacant because they don't have "clear title" — that is, their complicated ownership situation is taking a lot of time and effort to resolve.
Attorney Mike Forster explains three situations that he has seen be the reason multiple properties have remained vacant:
First is the common practice of adding multiple family members on the deed of a home. That’s a problem because if some of those people die or are unavailable, selling a property becomes complicated and costly. And if the owners do not agree on selling the property, a costly "partition" lawsuit must be filed.
Second, sometimes one or more joint property owners die without a will. Since there is not a clear line of succession of inheritance, the process of selling the property may become too expensive or onerous for the heir trying to sell it.
Finally, heirs inheriting property often lack the money, time, or connections to find an attorney, and so may not know what is required to sell a house, what the steps are to do so, and who has a right to the proceeds. That’s a problem because the legal process of selling a house with deceased owners can be too complicated for someone who is not an attorney.
As a result, the name on a vacant house's deed may be a deceased person who passed away decades ago. In order for an heir to sell or refinance the property, they must open a probate estate for every owner who has passed away. The probate process is the formal process required to go through the District of Columbia Probate Court, in which a personal representative must gather all the deceased's assets and use them to pay off debts and distribute the remainder to the deceased's heirs.
This is not only a complicated, labor-intensive, and lengthy legal process. It is also an expensive one — for example, each probate requires money up front to pay for publication, bond and filing fees, and attorney’s fees. Each probate can take at least six months and up to multiple years, especially if some of the heirs are hard to locate. Meanwhile, the property is sitting vacant and accruing thousands of dollars of property taxes per year.
This gauntlet of legal fees and years of work is too daunting for some families. And the home loses equity each year it is vacant, making the prospect of going through this process less rewarding. In some cases, what would have been a valuable family property is lost because no family member is willing or able to clear the title up in time.
I (Payton) happened to purchase my co-op apartment from an estate that had been tied up in court for several years. In my case, the property was stuck in years of limbo between the probate court, a lender who was reluctant to accept a short sale, and the cooperative.
In these sorts of cases, it's not clear that penalizing vacant properties — as recent legislation has done — would change matters all that much.