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Unfortunate Inherited Property Fates Are Often Avoidable

I want to write on a topic that can be divisive and emotional. Over years of experience in the real estate and rehabbing fields, I have seen this scenario play out more than a few times: when a property has fallen into disrepair and the owner dies, the home can end up becoming a burden on the heirs, and even on the community.

As a probate real estate specialist in the Nashua, New Hampshire area, I have seen a lot. I’ll reveal my opinion on what I feel is the best course of action for heirs inheriting a property later in the article, but first, I want to share a story or two that underscore the difficult reality of managing inherited real estate.

Ohio Home Receives “Death Sentence” under Nuisance Abatement Law

Several sad cases have come up in the news recently. The town of Hamilton, Ohio, recently delivered a “death sentence” in just ten minutes of deliberation, ruling to demolish a house, rather than to rehab it. The town has passed new legislation allowing a select committee to fast track the decision to rehab or demolish properties it considers nuisance properties. The recently created Hamilton Nuisance Appeals Board enjoys summary powers to declare any property a nuisance and decide whether it should be demolished or saved for rehabilitation.

According to a February 2016 article in the Journal News, “property owners will appear before the Nuisance Appeals Board, which will determine whether the situation should be declared a public nuisance, and whether the property should be cleared or rehabbed.” Once the Board has made its decision, the property’s owners must either comply with the decision or appeal to the courts for a reprieve.

“Heirs often have insufficient funds to care for and repair an inherited and wasting home. However, a lack of interest in a property can also lead to its demolition, even when there may be money to restore it.”

The house at 724 South 9th Street had been home to a beloved local citizen until his passing in October, 2014, yet his heirs showed little or no interest in the property.  Kenneth C. Johnson was a lifelong resident of the Hamilton area. His career followed the path of many other manufacturing workers of his era. When the plant closes, and you are of a certain age, you are forced with a difficult transition into new work requiring different skills.

The house at 724 South 9th Street in Hamilton, Ohio [courtesy of Google Street Maps]

The house at 724 South 9th Street in Hamilton, Ohio [courtesy of Google Street Maps]

Owner Forced into Career Change

Mr. Johnson worked for the Krauth and Benninghofen musical accessories manufacturing plant until its closure, and then made a career change into food and beverage. For years, Krauth and Benninghofen produced distinctive made-in-USA sheet music and instrument stands for decades at their Hamilton plant. Once the Hamilton plant closed, like so many others, Kenneth was forced to “re-tool” and apply his skills to different work in a different sector. Mr. Johnson ultimately found work in a pizzeria, and remained employed there until he retired. He lived out his remaining years at the home on 724 South  9th Street. Known as an unselfish and compassionate citizen, a devoted son and brother, he died without children to will his house to.

With no immediate family interested in caring for the home, it soon became an eyesore, prompting numerous complaints to the town. A June 10 article in the Journal News mentions that in total, there had been “29 complaints against the property, including tall grass, rubbish on the property, and the need to secure the building.” Hamilton, like other small towns, has had its fair share of home foreclosures and evictions. It is not uncommon for evictees to pile their trash onto the yard of an unoccupied property, rather than pay for removal.

Expanding Ambitions

The new Hamilton law that awarded decision-making power to the Nuisance Appeals Board attempts to protect the town’s appearance and preserve property values. But what constitutes a nuisance? Hamilton’s city manager Joshua Smith opines that complaints irrelevant to the condition of the property such as repeat police calls for domestic disputes should qualify as the kind of nuisance that can put a property at risk of being demolished.

As far away from reason as that may seem, it points up the reality that so many attitudes, behaviors and circumstances completely beyond the control of the heirs – let alone the forces of nature and time – combine to put an inherited house at risk.

It is unfortunate that a home such as Kenneth Johnson’s, which had been habitable and serviceable for many years, could swiftly be condemned as a result of disinterest. However, the heirs’ lack of interest was not random: the house was clad with asbestos tile, making it difficult to market for resale. Perhaps a competent rehabber or a savvy investor could have found value in the property, even as a tear-down, but any value remaining in the property has now been appropriated by the government.

My Guidance for Heirs to Probate and Inheritance Property

Here are my personal and professional views on inherited property, formed by personal experience in the probate and inheritance real estate market in New Hampshire and Massachusetts:

  • When a house is willed or disposed of through the probate process, I believe that the best plan for heirs is to pursue a quick sale of the inherited property.
  • Every month that an inherited property sits uncared for depletes its value and increases risks of natural or bureaucratic calamities.
  • Letting the unoccupied home and yard sit on the market for months while waiting for the best offer brings additional risks and maintenance costs which may become burdensome to the estate.
  • Heirs should put their differences aside and come together for their own common good.
  • The contents should be divided and removed swiftly, so the home can be cleaned up and prepared for a quick sale.

“Attitudes, behaviors and circumstances completely beyond the control of the heirs – let alone the forces of nature and time – combine to put an inherited house at risk.”

Municipalities are seeking ways to accelerate property demolition programs. In the case of Hamilton, Ohio, the City Manager clarified that Hamilton is planning new “chronic nuisance” legislation “to focus on properties where it’s really eating into taxpayer resources.”

NC City Sets More Aggressive Demolition Goals

The Albemarle, NC city council has lamented lack of funds to destroy more than four houses per year, and has discussed ways to process demolitions more aggressively. Since it can cost less to use the condemned home as a fire department burn exercise, they have discussed lengthening the list by classifying more properties as burn exercises.

One of the homes targeted for demolition in Albemarle is inhabited by an heir to the estate of Nancy Lee Tyson. Waddell Wylie has lived at 141 Arey Avenue for some time, despite dire conditions at the property. When he appeared before the City Council in May 2016, the council passed a special ordinance requiring him to vacate the house by July 19 if he cannot produce sufficient evidence of plans and funds to rehab the property in the July 18 council meeting.

The home at 141 Arey Avenue in Albemarle, North Carolina [courtesy of Google Street Maps]

The home at 141 Arey Avenue in Albemarle, North Carolina [courtesy of Google Street Maps]

In 2006, an F2 tornado tore through Springfield, Illinois, dropping a tree on a house that had been passed down as an inheritance. The home’s owners had moved out of state before the storm, and they reportedly had insufficient funds to repair the home. Consequently, it became a public nuisance – a target for trash dumping by unscrupulous neighbors.

These stories share a common theme: heirs often have insufficient funds to care for and repair an inherited and wasting home. However, a lack of interest in a property can also lead to its demolition, even when there may be money to restore it.

Too-Grand Plan Fails to Save Humble First Home of Motown Legend

406 Lucy Avenue in Memphis Tennessee is the birthplace of the Queen of Soul. While her father served as a Baptist minister in Memphis, Aretha Franklin spent her first two years in this shotgun-style house before the family moved to Detroit. The last time Aretha visited her birthplace was 1995, and since then, the property has been slated for demolition under local nuisance abatement laws. Ambitious plans for a $2.5 MM restoration project announced in 2011 never materialized, perhaps due to the magnitude of the budget proposed by the R.E.S.P.E.C.T. Foundation to restore this humble house. The more modest figure of $15,000, very recently pledged by Memphis businessman Lafayette Williams, may have swayed Judge Larry Potter to spare the home for another six weeks, in advance of new rescue plans.

The first home of the multi-platinum singer/songwriter, whose net worth is estimated at $60 MM, was very recently saved from the wrecking ball pending economic plans to restore the property. The historic home at 406 Lucy Avenue was placed into city receivership on June 7, according to this AP article.

Aretha Franklin’s first home at 406 Lucy Avenue in Memphis, Tennessee [courtesy of Wikimedia.org, Thomas R Machnitzki author]

Aretha Franklin’s first home at 406 Lucy Avenue in Memphis, Tennessee [courtesy of Wikimedia.org, Thomas R Machnitzki author]

Homes have a story to tell. When heirs cannot cooperate to liquidate an inherited property in a timely and rational manner, or they show little interest in the home, that story can be silenced by demolition. Heirs can avoid this graceless finish by acting smartly and early to market the property and divide the proceeds.

Have a question about selling your probate or inheritance property in Massachusetts or New Hampshire? Contact me today for a no-charge consultation.

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