Have you ever noticed abandoned or severely dilapidated houses that stand apart from their communities? I’m talking about the homes you see where someone clearly spent significant money to purchase them or to pay off a mortgage over a number of years. How do these homes come to a point of such severe neglect that they lose so much of their value and ultimately become unlivable? My theory is that many of our abandoned and severely neglected homes are the result of people inheriting undivided interests in the home. An undivided interest is defined as a “…claim of ownership of commonly-owned assets or property where each co-owner has unrestricted claim to all the assets or the entire property but no co-owner has exclusive claim to any single asset or part of the property.” It is definitely something we see here in Midland, Texas and in West Texas in general.
Inheriting an undivided interest in a home has become extremely common. There are two ways this typically happens here in Texas. One common occurrence is for someone to draft a will that leaves their children or their children and their spouse an equal share in their property. An even more common occurrence is for someone to pass away without a will, leaving an undivided ownership in their estate to their heirs. If everyone gets along and agrees to sell the house or share expenses in maintaining the house this can work out for the families. Unfortunately, things can and often do, become much messier.
Here are a few examples I see often:
(1) Stepmom has a homestead right to live in the house for the rest of her life can not afford or chooses not to maintain the home. Children do not want to go to the significant expense of maintaining the home for the rest of Stepmom’s life and the home falls into disrepair.
(2) Children inherit undivided interest in a home together. Only one child wants to live in the home. Child promises to pay rent to siblings but never does or doesn’t for long. Child can’t afford to maintain the home and siblings who get no benefit from the home have no reason to maintain it. Once again the home falls into severe disrepair.
(3) Children inherit an undivided interest in a home and no one lives close enough to maintain it. One child prevents the sale of the home for sentimental reasons. Other children do not want to pay for an expensive partition lawsuit to force a sale and the home falls into disrepair.
More often than not, heirs who do not or are unable to come up with a plan to sell or maintain a property will find that the property will succumb to neglect and lose more and more value each year. I believe that many of the abandoned homes you see are the result of families unwilling to take action to salvage the value of a property. It isn’t surprising why many people never see any benefit of their inheritance of an undivided interest in a home. They go to a realtor and are told they can’t sell without the other heirs agreeing to the sell. They go to the other owners and are rebuffed. They go to a lawyer and are asked to put down a large retainer for an expensive lawsuit in which they must sue their relative. In the past they may have even looked for someone willing to by their undivided interest and found no one.
Part of why we started this business was that we could not find anyone willing to buy undivided interests in homes or other real property online or otherwise. We bought the domain name undividedinterests.com (as well as hardtosellassets.com) and decided we wanted to be part of the solution to helping people move towards financial freedom by letting them know that we willing to make offers on undivided interests in homes and other real property that others might snub their nose at. Sometimes we make cash offers and sometimes we offer to pay for an option to purchase the property while we investigate ownership and options. In most cases it is best to sell as soon as possible before the property falls into severe neglect. Even undivided interests in property which has fallen into severe neglect may have value, but it is almost always easier to help save a property than to bring it back.