Equity Erased Pt. 3: A box full of cash and an empty promise
Most homeowners could never fathom strangers acquiring a portion of their property, obtaining a court order to sell it without their consent and depriving them of the value they’d accrued over years or decades of ownership.
There are legal protections against that, Tasha D’Ascanio thought — until it happened to her.
D’Ascanio and her uncle, Derrell Ray Pettit Jr., had each inherited half of a one-acre tract just outside West Asheville, with a tax value of $123,600, that had been home to three generations of their family.
But investors including Robert Perry Tucker II acquired the land and through an exploitive but legal process cut the family out of its fortune, an Asheville Watchdog investigation found. In the end, D’Ascanio got nothing, and Pettit ended up homeless for five months.
“I don’t know what happened,” D’Ascanio, 41, said. “I just know it’s heartbreaking that someone could come in and take away something like that from you.”
Read Part One: Asheville area homeowners, many elderly or African American, have been left embittered and poorer by their encounters with a local real estate investor.
Read Part Two: Investors use — and abuse — a Civil War-era property law to wrest control of houses and land inherited from family members.
Tucker, an Asheville attorney, declined repeated requests for comment.
Rep. Brian Turner, a Buncombe County Democrat, said what happened to D’Ascanio, “I would liken it to a scam … If this is legal, it shouldn’t be.”
‘How’s that possible?’
The story of how the family lost its inheritance involves a box of cash, an empty promise and a flawed and easily exploited law that has stripped property and wealth from other mostly poor property owners across the country, as Asheville Watchdog previously reported. Attempts to reform the law, known as a partition or forced sale, with one less prone to abuse have stalled in North Carolina after passing in 19 other states.
Investors use partition actions to buy properties co-owned by multiple people, usually heirs in a family, at below market value. The law allows any owner to ask the courts to order a property divided or sold, including by public auction.
Partition actions are meant to resolve disputes when one owner of a property wants to sell and the others don’t or can’t agree on a price. Investors find heirs willing to sell, acquire their partial interest, and ask the courts to force a sale of the entire property.
In D’Ascanio’s case, her uncle said he agreed to sell his half of the property to an investor, believing he could buy it back. But the investor sold it to two others, who took D’Ascanio and her husband to court under the partition law, forced a sale by public auction, and bought the entire parcel for $2,000. After taxes and fees, D’Ascanio’s share came to $0.
“I don’t understand that … How’s that possible?” D’Ascanio said. “How is that legal?”
D’Ascanio’s property, originally owned by her grandparents and on land prime for development, had been in her family for more than 50 years.
“On Christmas and Thanksgiving day, grandma and mom always made duck, our favorite,” D’Ascanio said. “We ate sandwiches at the picnic tables, played in the creek, climbed trees and fed the pigs and chickens.”
Pettit, her uncle, grew up in one of four trailers on the property and never left.
“I could go and walk the woods in the middle of the night and take you all over the place,” said Pettit, 44. After two deaths in the family, Pettit’s father in 2017 and his sister, D’Ascanio’s mother, in 2018, the property passed to Pettit and his niece.
D’Ascanio, the part-time manager and cook at the Rise ‘n Shine Café in North Asheville, did her best to handle the expenses. Money she had saved to buy a car for her 16-year-old went toward her mother’s funeral. She couldn’t afford a tombstone.
D’Ascanio was tapped out, her uncle unemployed, and they owed $1,615 in overdue property taxes.
The county foreclosed on the property in 2018, putting the land up for auction. And that’s what brought the investors in. Bidders included an entity represented by Tucker; Michael Kutyana of Asheville; and a company registered to Linda and William Fred Alexander of Black Mountain. All had bought and sold real estate around Buncombe County.
D’Ascanio followed the auction, watching bids reach $61,000. She was entitled to half, which she said she planned to split with her siblings. But then the auction abruptly ended. “It was almost finished. I was just waiting for a phone call from the courthouse,” D’Ascanio said. “It all just disappeared.”
By law, anyone can pay the tax debt on a property, which stops the foreclosure proceedings. And that’s what happened. The auction commissioner, James Ellis, said a lawyer named Peter R. Henry of Arden paid the tax bill and costs.
D’Ascanio had never heard of Henry and had no idea that as a result of deeds recorded the day before, her uncle’s half of the property now belonged to investors. And her half was about to become worthless.
The investors, Tucker, Kutyana, and the Alexanders, did not respond to repeated requests for comment about their roles in the transactions. Henry, who is Tucker’s lawyer and had prepared deeds for the Alexanders in previous deals, said he would look into Asheville Watchdog’s questions and then declined to comment.
Dinner and dessert: a box of cash
Exploitation of the partition law often begins with an investor obtaining a partial interest in a property from an unsavvy or financially needy owner for less than market value. In D’Ascanio’s case, that person was her uncle.
While the tax foreclosure auction was still under way, William Alexander showed up at Pettit’s trailer, Pettit told Asheville Watchdog. Pettit said he had no money but desperately wanted to keep the family land, the only place he had ever lived.
Over dinner at the Bonfire Barbecue in Asheville, Pettit said Alexander presented a cardboard box full of cash — $4,400 in mostly small bills — for Pettit’s interest in the property.
The amount was significantly less than market value or what Pettit would have received from the tax auction. But, according to Pettit, Alexander told him he could buy the property back in a year. Pettit said he recalled thinking, “This man’s going to help me … from losing my land.”
The day after the dinner, Pettit said, Alexander and his wife picked him up to sign and notarize documents. But there was a problem: Pettit said he couldn’t find his driver’s license, which any notary would require. The Alexanders, Pettit said, drove him to a Division of Motor Vehicles office, where he obtained a duplicate copy, and then to a UPS Store where he signed a deed to Alexander’s company.
“I said, OK, where’s the [document] that says I’m allowed to get it back?” Pettit said. Linda Alexander used a computer at the UPS Store to “type it up,” Pettit said.
A notarized “Option to Purchase,” signed by William Alexander, gave Pettit a year to buy back his share for $4,400 “plus any and all costs” Alexander incurred. Pettit said he received only the $4,400 in cash; the deed indicates a sale price of $11,000.
Pettit said he never had a chance to buy his land back. The same day the deed was recorded, Alexander’s company sold the interest it just bought from Pettit to a Tucker company and Kutyana for $55,000, records indicate. And the next day, Tucker’s company and Kutyana filed a partition action against D’Ascanio and her husband, the owners of the other half, asking the court to order the entire property to be sold.
Four months later, through what University of North Carolina law professor Rick Su called exploitation of the partition law, Tucker’s company and Kutyana owned the whole parcel, and D’Ascanio came away with nothing for her family land.
A rigged system
Courts often order partition sales by public auction, and the way they’re advertised and conducted virtually guarantees a below-market price, according to research by Thomas Mitchell, a law professor at Texas A&M University and principal author of the Uniform Partition of Heirs Property Act, a proposed law for states to help prevent abuses.
Family members who want to keep a property have limited options. Banks typically decline to accept fractional interests in properties as collateral for loans. Many heirs are cash poor, and as Mitchell puts it, unable “to outbid even a low-ball bidder.”
Advertising of the auctions typically consists of a legal description of the property in a newspaper — the weekly Weaverville Tribune for D’Ascanio’s land. Many potential bidders do not participate in partition auctions, Mitchell found, because they “never find out about such sales in the first place.”
Some states set a minimum price that must be met. Not North Carolina.
How Partitions Work
Partition cases are generally handled by the clerks of court. Once an owner files a partition request, the other owners are notified through a summons and informed that they may seek legal help. A court clerk holds a hearing to determine whether to divide or sell the property.
The law gives preference to division. Mitchell found in his review of partition cases nationwide that a forced sale of the entire property is considered extreme, but courts routinely order such sales, accepting the investor’s argument that physical division would result in a lower return for the owners than selling the property as a whole.
D’Ascanio said she couldn’t afford a lawyer and didn’t attend the hearing. The court clerk assigned to her case, Johanna Finkelstein, heard only from Tucker’s company and Kutyana, who persuaded Finkelstein that dividing the land was “not practical without destroying the value,” a court order states.
Once a partition request is approved, the clerk appoints commissioners — three if the property is to be physically divided, or typically one if a sale is ordered. In a partition sale, the role of a commissioner — often a local Realtor, property appraiser or attorney — is “to get the highest and fairest value for the property,” Finkelstein said in an interview.
The procedural rules for North Carolina clerks handling partition cases say that commissioners appointed to divide a property must be “disinterested” and have “no conflict of interest, either personal or financial, or no relationship with any party, potential witness, or person who stands to benefit from the proposed transactions.” But there are no rules on conflicts of interest for commissioners in partition sales.
Finkelstein appointed Asheville attorney Ile Adaramola to conduct the sale in D’Ascanio’s case. At the time, Finkelstein said, she typically chose a commissioner based on recommendations from the parties involved, a permissible practice under court clerk procedures.
Adaramola already had been the sale commissioner in three other partition actions by Tucker entities, all resulting in his companies buying the properties as the high bidder, records show. In two of those, Henry had requested Adaramola when another commissioner withdrew.
Finkelstein said she did not know when she appointed Adaramola in D’Ascanio’s case that Adaramola was at the same time acting as Henry’s monitor in a 2016 North Carolina State Bar disciplinary action against him.
Adaramola was meeting with Henry monthly and overseeing his communication with clients as part of a three-year monitoring agreement the Bar required for Henry to avoid a suspension of his license to practice law.
“One thing that I do now,” Finkelstein said, “is I pick the commissioner and other people who get appointed in these matters to try and avoid any real or appearance of a conflict of interest.”
Going, going, gone
On March 25, 2019, Adaramola held an auction on the steps of the Buncombe County Courthouse and sold D’Ascanio’s family land, valued by the county at $123,600, for $2,000.
The high bidder: Tucker’s company and Kutyana.
Adaramola told Asheville Watchdog her ties to Tucker and Henry had no bearing on the outcome. “A commissioner’s role is simply to sell the real property,” she said.
Other buyers likely stayed away, Finkelstein said, because Tucker’s company, Kutyana and Kutyana’s company had taken out deeds of trust between each other, encumbering their interest in the property with $78,000 in debt. While commercial lenders typically wouldn’t make such loans, private parties are free to lend and borrow money on their own terms.
The deeds of trust, similar to mortgages, were due by December 2019. There is no default or satisfaction recorded, which is generally filed upon repayment. The property was sold subject to those deeds of trust, meaning the loans would remain in place after the sale.
Asked if Tucker and Kutyana recorded the loans simply to dissuade rival bidders, Finkelstein said, “You can draw your own conclusions.”
Adaramola said she did not recall details of the case and was sympathetic to concerns about exploitation of the law. “As an African-American, my community has had land stolen from us,” she said.
But partition actions are legal, Adaramola said, and “if you’re doing what you’re supposed to be doing in accordance with the law, you’re doing what’s legally permissible.”
D’Ascanio was entitled to half of the $2,000 the property generated at auction, but as the law provides, she had to help pay the cost of the partition. After taxes and costs, including her share of $686 to Henry and $500 for Adaramola’s fee, she received nothing.
D’Ascanio could have requested a resale, available to owners when a partition sale generates a low price, but said she didn’t know she could. That recourse is rarely used in Buncombe or elsewhere, Mitchell found.
“We’re very limited to only being able to obey what the statute tells us to do,” Finkelstein said.
Finkelstein said Tucker’s company and Kutyana had “a right to a partition.”
“Did it come out to the disadvantage of the D’Ascanios?” she said. “It does appear that way, yes.”
Rick Su, a professor at the University of North Carolina School of Law, agreed.
“As for the overall scheme,” Su said, it appears “the intent was to exploit the partition system and the owners.”
The pain ‘will never go away’
D’Ascanio said she still cries over how her family’s wealth was taken. “It has emotionally hurt my soul,” she said.
It took her months to pay off her mother’s funeral and buy a tombstone for her grave.
“The pain will never go away from this for my family,” D’Ascanio said. “It is in my thoughts daily, all this time later, and always will be.”
Her uncle, Pettit, said he feels hoodwinked. He held onto that agreement giving him the option to buy back his interest, hoping William Alexander would make good on it.
“I tried to call him and his wife, and neither one of them would answer,” Pettit said.
Pettit remained on the property after his lease expired. Tucker and Kutyana went to court and obtained an eviction order. For five months, Pettit said, he was homeless, living in a tent.
Pettit sometimes goes by the property. The trailers are gone, and the land has been subdivided for development. There are different owners.
In November 2020, Tucker’s company and Kutyana sold the property for $137,000.
What can be done
The model reform law, the Uniform Partition of Heirs Property Act, would help prevent abuses in partition sales. Co-owners would have a right of first refusal and 45 days to buy out the interests of those requesting the partition and another 60 days to arrange for financing.
Courts would have to determine fair market value of the property based on an independent appraisal and could only force a sale with evidence that physical division would result in “substantial injury” to all owners. Consideration would be given to noneconomic factors such as whether the property has sentimental, cultural or historic value, or whether one or more owners could be rendered homeless. When a sale is the only option, a real estate broker would be appointed to list the property commercially.
In North Carolina, the Uniform Act has the support of a coalition of organizations that includes the Conservation Trust for North Carolina, the Black Family Land Trust and the Land Loss Prevention Project. But an influential group, the Conference of Clerks of Superior Court, has raised concerns, including who would pay for the appraisals and other logistics that they say would make partitions more complex and expensive. The clerks contend that the existing system, by allowing for upset bids after an auction, can actually lead to a higher sales price.
Co-sponsored by Rep. Turner of Buncombe, the Uniform Act passed the House with bipartisan support in May. A comparable bill sponsored by two Republicans and a Democrat was filed in the Senate.
As of early November, the bill was stuck in committee and is not expected to pass this year, despite support from key members of the Republican leadership. “It is essentially dead this year,” said Sen. Julie Mayfield, a Democrat from Asheville. “At this point in the year, we are basically done with bills … Committees aren’t meeting anymore.”
Zach Wallace of Audubon North Carolina, part of the coalition supporting the bill, said legislators had been working to address concerns raised by the court clerks but are now focused on redistricting and the budget.
“This affects folks all across the state, no matter income level, race, geography,” Wallace said. But “things move slow,” he said. “I’ve seen other bills that take multiple sessions to pass.”
In a Facebook post Wednesday urging people to read Asheville Watchdog’s “Equity Erased” series, Rep. Turner said he is working to pass the bill in next year’s legislative session.
“For far too long unscrupulous people have been using the partition sales process to cheat people out of the full value of their property,” Turner said. “This has had devastating consequences for too many families in WNC who have seen multi-generational properties, homes, and farms sold for pennies on the dollar.”
Becky Tin contributed to this report.
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. Becky Tin is a retired district court judge and lawyer. Email email@example.com.
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 thanks to Jonathan Ellison, Danielle Siegel, and Zane Martin.
Asheville Watchdog publisher Bob Gremillion is a member of the search committee that will choose Blue Ridge Public Radio's next General Manager and CEO.