U.S. Property Records: Sometimes a Disaster
October 5, 2021
By Brent Jones and David Rooney
A recent Washington Post article, The real damage, highlighted a problem in the US land records system: if you can’t prove ownership of your property, you may not have access to certain services. The framers of the U.S. Constitution believed property ownership was a cornerstone of a free democracy. They were right, but not all property owners are treated equally. The U.S. land records system is quirky. It’s essentially an 1850s system with some automation built around it, but no real modernization like many other advanced countries. In most of this country, recording property transactions is not required. It is voluntary. Land can pass from generation to generation without any government assistance or intervention. This undocumented transfer is considered an informal land transfer, much the same way in which property is passed from owner to owner in many parts of the developing world.
Without formal documentation such as deeds recorded in a government registry, there is no publicly searchable record of ownership. Without recorded transactions, there’s no clear title. Without clear title, property may not qualify for a mortgage. According to the Washington Post, more than a third of Black-owned land in the South cannot be used as collateral to obtain a mortgage because ownership has been passed down in informal transfers. Utility bills and property taxes are paid; however, if ownership isn’t documented, these individuals may be denied access to services including federal aid from disasters.
The Federal Emergency Management Agency (FEMA), created during the Carter administration over 40 years ago, has responded to countless disasters from hurricanes to wildfires. During and after a disaster, FEMA is responsible for disseminating aid in many forms, including financial grants to those impacted by disasters. Those who hold their property informally and have damaged homes were previously denied aid, but FEMA’s policies are changing to allow for other proofs of ownership. According to U.S. Department of Agriculture (USDA), 20,000 property owners were denied federal aid after Hurricane Katrina. In Puerto Rico following Hurricane Maria in 2017, 80,000 applications were denied aid because of lack of documentation of ownership. As a result, a process was created to self-certify ownership to receive aid.
This problem of documenting ownership isn’t going away soon and it’s not just a FEMA issue. It’s an issue with a homeowner’s ability to use their property as collateral for home improvement loans, mortgages and to have a clear title when selling property. Lack of clear title has negative impacts on property value. It takes legal assistance to formally transfer land and there’s a cost for that. There are fees to record documents including deeds at the county recorder’s office. To make matters worse, multiple heirs may own a share of a particular property. It is a costly process to track down all heirs and get them to sign off on any rights they may hold.
A similar problem also existed with Native American-owned land on many reservations. The federal government implemented the Land Buy-Back Program for Tribal Nations to help eliminate fractional ownership so landowners could realize the benefits of clear title, including the ability to obtain a mortgage.
The Property Records Industry Association (PRIA) is a not-for-profit trade association for recorders, those responsible for managing and preserving land records, and their business partners. PRIA develops and promotes national standards and best practices for the property records industry. One current initiative is developing best practices and a tool kit for integrating the recorder’s office with the assessor’s office. The recorder is responsible for permanently maintaining property records using a Land Records Management System (LRMS). The assessor (property appraiser or auditor) maintains current owner information and property characteristics, as well as assessing property value using several systems including Computer Assisted Mass Appraisal (CAMA) and Geographic Information Systems (GIS).
In land administration, GIS is used for mapping parcels, understanding how location affects value, offering detailed analysis, and sharing location information with the public. It integrates data layers such as soils, flood hazard areas, hydrology, zoning, addresses and utilities, among many other items. Overlaying this data gives the assessor and government officials a complete view of properties. Nearly every department in government uses GIS. It not surprising that parcels are the most requested data layer. Typically, this parcel layer includes owner, current use and information on improvements, creating extremely useful data that is easy to use and understand.
Integrating the recorder’s deeds and documents with parcels is paramount in modern land records systems. This integration helps clarify whether there is current recorded property ownership. It helps us understand the history of ownership transfers, while providing public notification, an ability to search property information, implement fraud detection and many more capabilities. With the 2020 Census data, this integration helps us understand the demographics of impacted communities.
Many parts of the South are exposed to increased disasters because of climate change—floods, storms, tornados, hurricanes and heat waves. The changing climate will not have equal impact on everyone. There are tools to help us understand who will be impacted, where are the areas of greatest risk, who doesn’t have documented property rights and who doesn’t have equitable access to services. GIS provides better understanding, planning and response capabilities. Integration with GIS helps modernize the property records systems across the country.
Brent Jones PE, PLS oversees Esri’s strategic planning, business development and marketing activities for land records, cadastre, surveying and land administration. David Rooney is assistant comptroller for Orange County, Fla. Jones and Rooney serve on the Property Records Industry Association (PRIA) GIS Work Group.
Contact ALTA at 202-296-3671 or [email protected].