How “Tangled Titles” Affect Illinois Residents

It is never easy when a loved one needs daily personal assistance at home. When this happens, families must decide who will take care of this family member. This scenario is especially common in families who cannot afford the high cost of nursing homes or elder living facilities.

Once a family designates an individual to care for their older loved one, that person uproots their own life to care for their family member day in and day out. In these cases, the family member assisting the elder may take residence in this home for extended periods, which can go on for years—essentially taking this home on as their own. They pay bills, make improvements, and fix things around the house. In essence, it is now their home as well.

Now, can you imagine, after spending years caring for your elderly loved one and living in the same home as them, that home would not legally belong to you? Unfortunately, this situation is the case in many circumstances. If the homeowner never puts the caretaker on the deed, the home becomes what’s known as a “tangled title.”

Tangled titles refer to the real estate law term where the property ownership is divided throughout a family when no one person is declared owner through a will or having their name on the deed of the home. This designation can pose a significant legal issue for the family members as conflict can arise around who will take ownership of the property. When this occurs, the process to disentangle the title requires professional legal counsel that can become timely and expensive.

Who This Impacts the Most

Tangled titles are generally the result of generations of a family who live in deep poverty. Because the older generation did not have the financial means to draw up a will that establishes ownership of the property, when the final family member passes, the ensuing dispute becomes the tangled title mentioned above.

What complicates this further is the estate laws that govern tangled titles. When a family resides in a home with no designated name on the deed, they cannot acquire home maintenance services for general upkeep. This happens due to their inability to apply for home repair assistance grants and loans, non-profit repair services, or free weatherization programs.

These facts mean that these families live in undesirable conditions on the property, including leaky ceilings, inoperable heating and cooling systems, busted pipes, outdated and dangerous electrical wiring, and molded wood. These conditions pose significant health issues to the home’s inhabitants and risk violating environmental laws. However, real estate law prevents access to programs that can improve the property.

In addition to the inability for low-income families involved in tangled titles to qualify for assistance programs, they are also disqualified for the following:

• Acceptable home insurance
• The ability to negotiate with banks or lending companies regarding the property, including the home
• Transferring or encumbering the title to an individual or entity in the future
• Entering into payment plans for utilities or real estate taxes to avoid a Sheriff’s sale on the home

Not allowing these possibilities to the families living in the home’s difficult conditions only decreases their standard of living and puts those who live on the property at greater risk. Further, because they cannot pay off debt due to real estate taxes, the home will most likely go to a Sheriff’s sale, which can send these families into homelessness.

Illinois Joint Real Property Ownership

When a property enters into a tangled title status within the state of Illinois, there are three ways that multiple people can hold a title. These are a tenancy in common, joint tenancy with the right of survivorship, and tenancy by entirety (TBE). In most cases of tangled titles, the multiple owners of the property can decide what form of co-ownership they would like to have.

The participants of the co-ownership can change the formation of their arrangement at any time. However, each configuration has different results for transfer upon death. While the most common occurrence of multiple persons on a deed is the result of real estate investments, tangled titles do fall under these categories.

Tenancy in Common (TIC)

For residents in Illinois, when the individuals do not assign a title to the property, the default becomes the tenancy in common. This most basic form of the title refers to multiple persons holding ownership of the property having an undivided fractional interest. Despite this mandate, each member of the title has access to the entire property. That means that regardless of the percentage of ownership, authorities cannot divide the physical property.

The members of the tenancy can sell, transfer, or convey their portion of ownership without a unilateral decision including other members. Further, when one of the tenants dies, their percentage of ownership will pass according to the owner’s will. If the owner’s will does not indicate an individual to assume ownership, this will go to the owner’s closest heir.

Joint Tenancy

A joint tenancy, also known as “joint tenants with right of survivorship,” refers to another form of property ownership with multiple members. While similar to TIC, a salient difference is that their portion of the property does not go to the heir when one member dies. Thus, even if their ownership section is willed to an heir, the remaining members do not have to abide by that request.

This structure of ownership must satisfy the contract law requirements known as the “four unities.” These units refer to time, title, interest, and possession.

Tenancy by the Entirety

The TBE structure for holding titles in the State of Illinois takes elements from the TIC and joint tenancy to create a hybrid. This form of holding title benefits married couples most, as it prevents creditors from seizing the property if one of the couples passes and there is no joint debt between them. In addition, when there is no mutual debt, creditors cannot partition, sell, or encumber the property.

To receive these protections, the TBE requires the deed to state this form of ownership for the property. The TBE will terminate if the couple acquires mutual debt, there is a divorce of the co-owners, or an agreement of co-owners.

For more information on real estate law in Illinois, contact Grcic Law at 847-696-6196 today!