Tangled headlines in Philly threaten over $ 1.1 billion in generational wealth
According to The Pew Charitable Trusts, Philadelphians stand at risk of losing more than $ 1.1 billion in family wealth because it is not legally clear who owns their home. And that’s a conservative estimate.
Over 10,400 properties in Philadelphia have uncertain ownership, which mostly happens when an owner dies and the deed is not transferred to a new owner. These tangled titles preventing people from qualifying for government help with home repairs, preventing them from selling homes and making them vulnerable to deed theft schemes. People also cannot take out home improvement loans or use their home equity to start a business. Sometimes property taxes go unpaid and houses end up during sheriff’s sales. Families can lose the wealth they have spent generations building.
Properties with unclear ownership are more likely to be abandoned and contribute to the plague and declining home values in neighborhoods.
READ MORE: Unclear property hinders maintenance and sale of homes in Philly. The city is working on a solution.
Areas with higher percentages of properties with entangled titles are more likely to have large populations of low-income people and black residents, a consequence of both discriminatory policies that limit black and low-income wealth creation. levels of estate planning among black households. Parts of North, North, West and Southwest Philadelphia have more than half of the city’s entangled titles, though they contain about a third of residential properties, according to Pew Charitable Trusts analysis published Wednesday.
“Households that need the extra wealth can’t take advantage of it,” said Octavia Howell, director of The Pew Charitable Trusts’ Philadelphia research and policy initiative.
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The more than 10,400 tangled titles the report found represent about 2% of residential properties in the city. The total estimated value of these properties exceeds $ 1.1 billion. Researchers and city officials agree that the findings of the report, which was initiated to understand the scale of the problem in Philadelphia, are being underestimated.
Tracey Gordon, the city’s register of wills, said she plans to use the findings to target her office’s estate planning education efforts on specific neighborhoods and to advocate for more funding. and legislation from city council and state to eliminate the tangled title problem.
The cost and complexity of resolving tangled headlines along with a lack of awareness of the issue kept the Philadelphians from taking action. In decades past, some did not think their property was worth it either. But home values in Philadelphia have gone up.
“A lot of people don’t know they’re in a tangled headline. … They think they own the property, ”Gordon said. “People are sitting in properties that have the potential to be lost, whether it’s sheriff sales, run-down, abandonment.”
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Resolving a tangled title can be time consuming and usually requires the help of a lawyer. With an attorney, taxes and fees, the process can cost $ 9,200 for a home valued at the median value of $ 88,800, according to The Pew Charitable Trusts. This is for a simple case.
The longer the problem persists, the more difficult it can be to resolve, as heirs multiply and claim pieces of the property, especially if the owner has died without a will.
The city’s register of wills office has attempted to educate the public on what tangled titles are and how to avoid them in order to prevent the problem from escalating. It’s easier to prevent tangled headlines than to solve them.
Last year, the office partnered with the city’s archives department to create a program that waives or defers certain fees to straighten out a tangled title and connects low- and moderate-income Philadelphians to free legal aid from volunteer lawyers. Legal fees are half the median cost of unraveling a title.
To apply for the city’s Probate Deferment Initiative pilot program, residents can email [email protected]
Sharon Wilson, a lawyer in the Registry of Wills office, said the Pew Charitable Trusts report confirms what the office already knew, but it is “the kind of documentation we need to come up with even more aggressive policies.”
»READ MORE: A real estate fortune built on a base of falsified deeds and tangled titles
Since the Register of Wills program was launched about six months ago, a handful of families have completed it and a handful more are in the works. The program can help those who are not eligible for assistance through the city-funded program Entangled Securities Fund, which has more than $ 210,000 this fiscal year to help low-income Philadelphians with wills validation and title transfer fees. Gordon said more Philadelphians are calling his office for help when they hear about the program.
Dana Goldberg, legal director of the SeniorLAW Center in Philadelphia, said that among the agency’s clients – Pennsylvanians aged 60 and over – tangled titles are a growing problem. Many Philadelphia seniors own homes despite their poverty, she said, as property has been passed down from generation to generation.
“Usually we are contacted due to some sort of precipitous crisis that has occurred,” she said. “There’s a hole in the roof and it’s raining or in the winter it snows in the house, and they need to repair their roof and they have to request it. [assistance] programs. And they were turned down because they can’t prove they are the record holder. “
In an interview with The Pew Charitable Trusts, David Perri, former commissioner of the city’s licensing and inspections department, said lack of maintenance caused almost all building collapses unrelated to construction. during the last years.
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Before The Pew Charitable Trusts’ new report, a 2007 analysis by the nonprofit legal services agency Philadelphia VIP found that about 14,000 properties had tangled titles. This analysis used different methods than in Wednesday’s report, so the numbers cannot be compared.
Gordon, the city’s register of wills, said that while the latest report underestimated the tangled titles in Philadelphia, it clearly shows the problem runs deep.
“This,” she said, “is a crisis. “