Equity Erased Pt. 2 - Imperfectly Legal: Forced sales hurt heirs, poor homeowners
Five hundred dollars was all it took for Robert Perry Tucker II to gain an interest in an Asheville home that had been owned by a Black family since 1918.
Two elderly heirs signed deeds selling their shares of the home to a Tucker company for $250 apiece. With their ownership in hand, Tucker’s company used a Reconstruction-era law to force a sale of the entire property, and another Tucker company bought it at auction for $3,750.
The eight heirs whose family had owned the property for a century received $445 each, the auction commissioner reported. The Tucker company that bought the property sold it in three months for $55,000.
The law enabling the sale, known as partition and sometimes called “forced sale,” allows any co-owner in a jointly owned property to cash out their share by requesting local courts to physically divide the property or sell it and split the proceeds. Partitions are meant to resolve disputes among family members or business partners, but the law has been exploited by investors who acquire one or more relatives’ interest — however small — force a sale, and buy the entire property, an Asheville Watchdog investigation found. When sold by public auction, partition sales typically bring prices substantially below market value.
Low-income owners and minorities are especially vulnerable to exploitation when they inherit property from a family member who died, usually without a will in what is known as heirs’ property. Partition sales have become a major source of land and wealth loss, particularly in the South among Black families, where such property is a common form of ownership that in some cases traces to Emancipation.
Read Part One of Asheville Watchdog’s investigation: Asheville area homeowners, many elderly and/or Black, have been left embittered and poorer by their encounters with a local real estate investor and his associates.
Tucker’s companies have filed at least a dozen partition actions in Buncombe County since 2015, Asheville Watchdog found in a year-long investigation that involved reviewing scores of real estate transactions and court filings, and more than 100 interviews.
Tucker’s attorney, Peter R. Henry of Arden, points out that partition actions are “completely legal.” Lawyer groups, including the real estate section of the American Bar Association, call partitions potentially exploitative and have endorsed a uniform law that helps preserve families’ property wealth. Nineteen states have passed it. North Carolina is not one of them.
Investor buys half of West Asheville house
For $3,000, a Tucker company bought a half-interest in Kathy Waites’s West Asheville home, assessed at $303,800, and is now seeking to force a partition sale of the house where Waites has lived for 10 years and had hoped to spend her retirement.
“I don't know where I'm going to go or what I'm going to do,” said Waites, 62.
Waites filed a lawsuit in October 2020 accusing Tucker and his company of fraud by acquiring her nephew’s share in the property through “false representations,” including that he could go to jail for unpaid property taxes. In answer to the suit, Tucker and his company denied wrongdoing.
Asheville Watchdog previously reported how Tucker’s companies have acquired properties, often in foreclosure and estate cases, at far below market value. Of more than four dozen transactions reviewed, nearly half the sellers were Black, even though Blacks make up just 3.9 percent of Buncombe County homeowners.
Lisa K. Roberts, a Black woman who calls herself a housing advocate, negotiated some of the deals and has notarized documents in at least 20 transactions to Tucker’s companies since 2013, the majority from Black sellers.
Roberts, who also goes by Roberts-Allen, declined to speak with Asheville Watchdog, despite repeated requests. Tucker referred questions to his lawyer, Henry, who described all of the transactions as voluntary and legal.
“Terrifying and heartbreaking”
Waites’s house has been in her family since 1935. She owns half, and after her brother’s death, the other half passed to her now estranged nephew, Linsey Waites of Georgia.
Kathy Waites paid all the expenses on the property but missed two years of property tax payments after her income declined due to a health issue.
In 2019, Buncombe County began tax foreclosure proceedings. Linsey, 28, didn’t like being served with a court summons at his job at a food processing plant, he said, and sold his half interest to a Tucker company for $3,000. A “memorandum of conveyance” recorded with the deed is notarized by Lisa Roberts.
The property had a tax value of $229,600 and a Zillow estimate of $308,000, making Linsey Waites’s interest worth at least $114,800.
The sale price is “so disproportionate to the value … it would shock the conscience of a reasonable person,” said Kathy Waites’s lawsuit, filed by attorney Martha Bradley.
In an interview with Asheville Watchdog, Linsey Waites said Tucker told him that he “was going to have to pay” his aunt’s taxes, but if he signed over ownership, he’d “be clear.”
Linsey Waites said he didn’t want the house anyway, had never lived in it and didn’t even know he owned half until he began receiving notices for overdue taxes. He said his mother, Mary, of Asheville, who had been married to Kathy Waites’s brother, worked out details of the sale.
Mary Waites told Asheville Watchdog a woman called her several times and came to her house, presenting herself as an “advocate” and telling her that Linsey could be responsible not just for his aunt’s property taxes but her other bills, too. Mary Waites could not recall the woman’s name or provide a description.
The woman showed her paperwork of Kathy Waites’s credit card debt from Bank of America — a collection action against Waites for $13,562 had recently been filed in court — and said “there’s more to be coming out,” Mary Waites said.
The woman said “they’d chase” Linsey and that “it would all be his responsibility to pay back,” Mary Waites said. “He didn’t have no money to pay it ... Linsey ain’t got two cents.”
The woman said he could be tied up in court or worse, an implication Mary Waites said she took to mean that her son, who had an arrest record, could go to jail.
“He could be liable,” Mary Waites said. “He could go to court, all drawn out, whatever, you know, left that up to your mind, you know what I’m saying?”
Asked if she feared her son could be locked up over his aunt’s debts, she said, “Hell, yes, I was worried about it because if he didn’t have no money to pay nothing, what was left to happen?”
Property owners cannot be jailed for failing to pay property taxes in North Carolina, and Linsey Waites would not have been responsible for his aunt’s debts. Had the house been sold in a tax foreclosure, the proceeds after taxes and fees would have been split between Kathy and Linsey Waites.
“If we had known that, we wouldn’t have done that,” Mary Waites said. “It was just about getting Linsey out of trouble.”
No money was mentioned until right before the deed signing, she said. The initial discussions were “just to help us get out of the situation.”
Mary Waites said she insisted on being present when her son signed the sale documents, and a man Linsey identified as Tucker drove her to Georgia. Linsey received $3,000 and Mary, $1,000, both in cash, Mary Waites said.
She said she now realizes Tucker’s company got Linsey’s interest for “goddamn nothing” but that she’s relieved her son is “out of it.”
In a response to the lawsuit, Henry said that “no fraud or misrepresentation took place” and asked the judge for a partition order forcing the sale of the property.
Courts often order partition sales by public auction, and owners who want to keep their property must bid against the investor.
Kathy Waites filed for bankruptcy last year and said she has no money to outbid Tucker if her property goes to a partition auction, a prospect she finds frightening.
“I’ve been very independent all of my life, and this has been humbling and terrifying and heartbreaking,” she said.
Law easily exploited
North Carolina’s partition law dates to the period following the Civil War. Emancipated Blacks in the South acquired millions of acres of farmland as well as residential properties that have since passed to heirs and become prime opportunities for investors.
Land most susceptible to abuses is heirs’ property that is passed from one generation to the next, usually intestate, without a will. Many Americans, including an estimated three out of four Blacks, lack a will, in which case ownership goes to descendants and their descendants when they die. As a result, it’s not uncommon for some properties to be owned by dozens of relatives.
Most co-owners of a property, legally referred to as cotenants, assume it can only be sold if everyone agrees. But North Carolina’s partition law allows any owner – whether it’s through a 50 percent interest or 1/50th – to force a sale, and an investor need only buy one relative’s share.
About 500 partition cases are filed each year in North Carolina, according to state court statistics. No breakdown is available for how many involve heirs’ property.
Partition sales have become one of the greatest sources of land loss in the South. In Hilton Head, South Carolina, for example, speculators have used the law to pry valuable land from Black families for development.
Nineteen states have passed it, including five in the South. Rep. Brian Turner, a Buncombe County Democrat, co-sponsored a bill to adopt the Uniform Act this year in the North Carolina General Assembly. It passed the House in May but is still pending in the Senate.
“You've got developers who are looking to secure land below potentially market cost,” said Turner, a commercial real estate agent. They buy an interest in a property “and all of a sudden the [other owners] are put in a position where they're forced to sell it, really without a lot of recourse.”
The law has been used to buy farmland in eastern North Carolina but also residential properties in Buncombe and other western counties at below market prices.
“The problem,” said Rep. John Ager, a Buncombe Democrat who signed onto the bill, “is that property is inherited down the line through relatives. Those relatives move away, have no particular interest in the property or connection to it.”
Developers research the properties and “pick off a relative for some minimal amount of money,” Ager said, “and then ask the court for a partition.”
Cash deal in a Kmart parking lot
Robert Tucker used the partition law to buy Mary Hobart’s East Asheville house in 2016. Hobart, who had paid the mortgage and taxes for nine years, came away with $2,500, and a Tucker company got the property.
It began with a mortgage foreclosure. Hobart said she came home to find a business card from Lisa Roberts as “senior housing coordinator” of Home Advocates and Limitless Outreach, her business. “Please call me as soon as possible,” Roberts wrote on the back.
Hobart had recently discovered a major problem with her ownership. Another person had inherited 25 percent from a previous owner years earlier, court records show.
Hobart’s predicament became Tucker’s opportunity. His company bought the other owner’s interest for $10,000, according to the deed, and then filed a partition action against Hobart and her mortgage holder. Hobart said Tucker came to her house, and to her job at a lemonade stand at the Asheville Outlets.
“Every time it was like, ‘You’re a squatter here,’ ” she said. “He said I was in trouble because I was living in a foreclosed home.”
Hobart’s home hadn’t been foreclosed on, but she said she came to believe from Tucker that her ownership “was a mess” and that “there would be a lot more owed on it than what I already paid.” She sold her 75 percent to his company for $2,500, signing the deed, she said, on the hood of a car in a Kmart parking lot. Henry notarized it, and Tucker paid her in cash, counting out 25 hundred-dollar bills, she said.
Henry said he did not recall the specific signing or location but has notarized deeds in parking lots. “I've met people in all kinds of odd places to do closings,” he said.
Asked why Hobart received so little for her interest, especially compared to the other owner, Henry said, “I can't tell you that.”
Henry said he would ask Tucker about Hobart’s claim that Tucker called her a squatter and in trouble but then declined further comment.
“I am not involved in negotiating any of these deals,” Henry said, describing his role as “clerical.”
Tucker let Hobart and her children remain in the house while they looked for a place to rent. Henry filed a second partition action naming the mortgage holder. At a partition sale, another Tucker company bought the property for $40,000 and sold it two months later for $89,000.
Frances Roland Conley-Green had been living in her deceased mother’s house near downtown Asheville, and a property tax bill was overdue. Green said she took out a loan and paid it. End of story, so she thought.
Three days earlier, her siblings signed over their ownership interests to a Tucker company. Green said Roberts came to the house and said “that the property had been sold and I needed to sign the paper work [sic] because my siblings had already signed to sell due to unpaid taxes.” Green refused, and Tucker’s company filed a partition action against her and her husband.
In response, Green alleged that Roberts had told her siblings “the house would be auctioned on the court house [sic] steps, with no pay out to family. Due to taxes not being paid.”
Once Green paid the tax bill, there was no longer a threat of foreclosure, but even if there had been, the family would have received the equity after the taxes and costs were paid.
Green and her husband went to court, but a judge ruled Tucker’s company was entitled to a partition sale. An auction sign went up in the yard. With an attorney, the Greens negotiated a settlement. All told, Tucker’s company paid the family $150,000 for the house and sold it a year later for $277,000, property records show.
“We'd been there since ‘71,” Green said. “I had to pack up everything from the top to the bottom, clean it … I get anxiety attacks thinking about it.”
Asked if he knew that Green and others felt victimized by Tucker’s partition actions, Henry said, “Absolutely not.”
“I’m sorry to hear it,” he said.
Coming Friday, Part Three: An Asheville family loses its land and inheritance, and efforts to reform the law that allowed it are stalled in the North Carolina Senate.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Sally Kestin is a Pulitzer Prize-winning investigative reporter. Email firstname.lastname@example.org.
Asheville Watchdog gratefully acknowledges the assistance of Lawyers for Reporters, a joint project of the Cyrus R. Vance Center for International Justice and the Press Freedom Defense Fund, and the Duke University School of Law’s First Amendment Clinic, with special assistance from Jonathan Ellison, Danielle Siegel, and Zane Martin.
AVL Watchdog publisher Bob Gremillion is a member of the search committee that will choose Blue Ridge Public Radio's next General Manager and CEO.