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Named a successor in interest? Heres what it means for your property rights
HomeLight
Real Estate
2 months ago
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You’ve been named as a “successor in interest” for an inherited house or other property with a mortgage. But how does this label affect your property rights and responsibilities? Can you sell the home?

In this post, we explain this legal term often found in inheritance and divorce settlement documents. We’ll also provide expert insights from a top real estate attorney along with tips on how to sell your inherited property.

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What is a successor in interest in real estate?

A successor in interest is someone who has legally inherited or is recognized as having ownership interest in a property, often following the death of the previous owner or through a legal transfer.

“A successor in interest is anybody who takes over the property from the prior owner,” explains Justin Meyer, an attorney/partner with Rosenthal Meyer, PLLC, a multi-state law group based in Orlando, Florida. “If somebody buys the property, they are a successor in interest. If somebody inherits the property, they are the successor in interest.”

Common ways someone becomes a successor in interest include:

Being named a successor in interest does not necessarily mean that a property is free and clear. If the home has an existing mortgage, you’ll need to take additional steps before selling or refinancing.

Your rights and responsibilities as a successor in interest

As a successor in interest, you gain certain rights to the property, but you also take on potential responsibilities. Here’s what you should be aware of:

  • Mortgage obligations: If the inherited home has an active mortgage, the lender must allow you options to assume ownership under the Garn-St. Germain Act, which protects against “due-on-sale” clauses in mortgages. These clauses would typically require the entire loan balance to be paid off if the property is transferred to a new owner. However, this does not eliminate the need to make mortgage payments. Mortgage obligations can also vary depending on how you obtained the property.
  • Property expenses: You are responsible for property taxes, homeowners insurance, and maintenance. If these aren’t paid, the home could be at risk of liens or foreclosure.
  • Title and ownership confirmation: Before selling or refinancing, you may need to complete legal steps such as probate (if the home was inherited through a will) or updating the deed.
  • Right to live in the home: If you decide not to sell and want to live in the home, you may have to buy out other successors in interest or heirs — or set up an agreement with them.

As noted above, more than one person can be a successor in interest of a property. For example, if your parents pass away and leave a home to you and your brother or sister, each of you can become a successor in interest with an ownership interest in the family home.

As a successor in interest, you are not automatically liable for any loans attached to the home and are not required to make payments, but many successors in interest choose to continue making payments.

“The [successors in interest] own the property with any limitations that were in place prior to them taking the property unless those limitations have been cleared,” Meyer says. “So if there’s an existing mortgage on the property, then they can take that mortgage.”


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