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How Clouded Titles Affect Low-Income Victims Of Disasters


While renters might be worrying about making their September rent, owners of flood-damaged property may face a different dilemma - proving they actually own their homes. This is a problem when there is no clear paper trail documenting who owns the property. Lawyers call this a clouded title, which makes it very difficult to convince the government to give homeowners money that's been set aside to help them rebuild. After Hurricane Katrina, some 20,000 homeowners face this problem. It also affected thousands of Texans after Ike in 2008, Hurricane Rita in 2005 and Dolly in 2003. University of Texas professor Heather Way has written extensively about this issue, and we talked to her about what Houston residents may face as they rebuild after Harvey.

HEATHER WAY: A lot of low-income families don't have access to the legal help you need to be able to pass title to your home when you die, for example. Or when you're buying a home, they don't traditionally - they don't necessarily go through a bank, where you have documentation and oversight over the passage of title. So it's a big problem in low-income communities. We did a study where we went out and talked to over a thousand homeowners in low-income communities in Texas and found that 90 percent of them didn't have wills. And there were a number reasons for that. It's cultural barriers. It's lack of just information, understanding of the importance of having a will to make it easier to pass your ownership interest onto your children. There's a bunch of different issues tied together.

MARTIN: So walk me through what it might take for a person who lives in a home to prove that he or she owns the home, I mean, and to prove it to the satisfaction of a government agency who would want to know that for purposes of offering the kinds of assistance that people hope will be made available.

WAY: Yeah. It depends on the type of program the family's trying to get assistance for. So with FEMA, the barriers are not as high. And FEMA is that first level of assistance for families trying to get immediate assistance to repair their homes. And in that case, you just have to show some kind of proof of ownership, things like that - even that the family has a track record of paying taxes. And then the longer-term disaster recovery assistance that comes in to help families whose homes have been destroyed and can't be rebuilt or they need lots and lots of funding to rebuild them, in that case, the barriers are very large.

For example, one of the families that my colleagues at UT worked with, this is a woman who lived in her home her entire life. And then after Ike, her home was barely standing. And she was living in this home with standing water in it, even snakes in her home. She had inherited the house from her mother. Her mother had inherited the home from her parents. No one had wills. And so she actually - there were 12 other relatives, including distant cousins and great uncles she'd never even met who all actually had an ownership interest in this home. And in that case, it took one of my colleagues a year and a half of legal work and a lawsuit. And the client, in the meantime, is in and out of the hospital from - as a result of the hazards of living in this home. It's tragic.

MARTIN: And given your research in this area, how much of a problem do you think this is going to be with what we know now?

WAY: It's an enormous problem. I mean, we can expect up to 50 percent of low-income homeowners who've been impacted by Harvey to be facing these barriers. So tens of thousands of families are going to be facing long delays, or worse, just denial of assistance.

MARTIN: And is it though because you think people just don't know that it's as important as it is or it's just because you think that this causes - because you can get a will at LegalZoom, right? I mean, that's not hard these days.

WAY: Well, you have to probate the will, then. And to probate the will costs over a thousand dollars. Meaning after you die, you have a lawyer that goes to court. It's not as easy as getting a will, unfortunately.

MARTIN: Do you have any sense of why it costs so much to record these documents? Is there any sort of philosophy behind why it costs as much as it does? Property ownership is so fundamental to American identity. Is there some logic behind, like, why does it cost that much?

WAY: Well, there's been a lot of response to this in Texas. After Ike hit, we sat down and said, OK, what can we do to be proactive about this? So we adopted this - it's called a Transfer on Death Deed tool. It's been adopted, I think, in like 20 other states. And that's a tool where you can sign a document and go pay the $15 to record it. And then when you die, the title automatically passes to who you put in that document. So it's to get around this issue of the will and the probating of the will.

Most families, when we sit down with them and talk about the importance of this tool and what, you know, thinking long term what could happen if they don't plan ahead, most end up signing a transfer-on-death deed. They don't necessarily transfer it to one kid, but at least they - just the step of identifying, OK, here are my kids that are automatically going to get this title. It creates that paper trail. So it's a big step in the right direction.

MARTIN: That's Professor Heather Way of the University of Texas School of Law. We reached her at her office in Austin, Texas. Professor Way, we thank you so much for speaking with us.

WAY: Thank you, Michel. Transcript provided by NPR, Copyright NPR.