What To Do After Inheriting Land in Pennsylvania

Inheriting land in Pennsylvania can be both an exciting opportunity and a complex responsibility. As of 2021, Pennsylvania boasts 52,700 farms covering 7.3 million acres, with an average farm size of 139 acres, according to the USDA National Agricultural Statistics Service. The state's diverse landscape offers various possibilities for inherited land, from agricultural use to recreational purposes or potential development. However, new landowners often find themselves facing numerous decisions and legal considerations. 

Understanding your options and responsibilities is crucial to maximizing the value and potential of your inherited property while navigating Pennsylvania's specific land use regulations and tax implications.

Get Organized and Review the Will

When inheriting property, your first task is getting organized. Locate the will and study it closely. The will outlines the land’s description, location and any stipulations for its use. Verify the legal description matches the property deed. Review for outstanding debts like mortgages, taxes or liens you may now owe. Understanding these details early prevents surprises down the road.

Collect All Documentation

Like a detective, gather every document related to the land as you inherit it. This includes the deed, surveys, title insurance, leases, easements, tax records and more. Organize these properly in a safe place. Having all paperwork handy lets you make informed choices.

Get an Appraisal

Hiring an appraiser should be one of your first steps. A professional appraisal determines the property’s fair market value based on sales, zoning, improvements and other factors. Know your land’s true value before deciding whether to sell, lease or hold it.

Pay Off Loans and Debt

If the land has debts like a mortgage, pay them ASAP. Otherwise you risk foreclosure if payments lapse. Review who is responsible for debt - you or the estate. If estate debts exceed assets, creditors may claim the land.

Update Ownership Records

To make your inherited land legally yours, file an updated deed with the county. This transfers title from the previous owner to you. Also update tax records in your name to receive future bills. Take care of this paperwork early.

Consider Title Insurance

Title issues easily derail land sales. Purchasing title insurance can protect you financially if problems emerge. For inherited land, an insurer researches records to uncover liens, easements or other title defects before issuing a policy. Though optional, title insurance brings peace of mind.

Pay Property Taxes

Make sure to pay any outstanding property taxes, and continue paying them annually or as scheduled. In Pennsylvania, property taxes help fund public schools, county governments, and municipalities. If property taxes are unpaid for long enough, the property could be sold at a tax sale. Stay on top of taxes to avoid losing the land.

Inspect the Property

Visit the physical land and inspect it thoroughly. Look for any encroachments, easements, damage, hazardous waste, or other problems. Address any issues you find right away to limit liability. If the land has structures or buildings, inspect those for problems too. Consider hiring professionals to inspect for pests, mold, water damage, etc.

Decide Whether to Keep, Sell, or Donate the Land

Now comes the time to decide what to actually do with the inherited property. There are a few options:

Keep the Land

You may want to keep the land if it has sentimental family value, good recreational access like lakefront, has income potential, or you want to build on it someday. Make sure you can afford ongoing taxes, maintenance, and insurance costs if holding long-term. Also consider hiring a property manager if not local.

Sell the Land

Selling is ideal if you need money, don't plan to use the land, or it would be a financial burden. However, selling land, especially raw vacant land, can be difficult without the right strategy. More on how to sell inherited land later.

Donate the Land

You can donate or gift land to a charitable organization, land trust, municipality, or family member. This avoids having to sell it yourself while getting a tax deduction. The land can also potentially avoid probate this way. Consider deed restrictions on use.

Pay Maintenance & Insurance Costs

As the new land owner, you are responsible for ongoing maintenance and insurance costs. Make sure grass is mowed, weeds are managed, structures maintained, and hazards dealt with. Liability insurance like comprehensive general liability can protect you from risks.

Consider Joining a Landowner Association

In Pennsylvania, many private landowners benefit from joining associations. For example, the Pennsylvania Farm Bureau advocates for farmers and rural landowners on policy issues. A sportsman's club provides community and helps maintain wildlife habitat. Joining related groups can open up local knowledge and resources.

Decide on Living Trust or Will as New Owner

To avoid your heirs going through the same inheritance process someday, make sure your will or living trust is updated. Spell out exactly what should happen to the land if you pass away. Working with an estate planning lawyer can ensure it gets properly handled.

Explore Options for Generating Income

Owning rural land gives you opportunities to generate income through:

• Hunting or recreational leases - Allow hunters, ATV users, etc. to access the land for a fee.
• Farming leases - Lease acreage to local farmers to plant crops and share profits.
• Timber harvesting - Carefully manage timber and sell mature trees to local mills.
• Mineral/natural gas rights leasing - Lease rights to gas companies for exploration and drilling.
• Outdoor advertising leases - Allow billboards, cell towers, pipelines, managed timber harvesting, etc. for substantial income.
• Campground or RV park - Develop a portion of the land into a campground or RV park and collect fees.

Weigh Development Potential

If the land has good access, utilities, zoning, etc. you may want to explore development opportunities. This could mean residential housing, commercial sites, industrial uses, mixed development, etc. Working with land developers is an option if you don't want to develop it yourself.

If Selling, Understand the Challenges

Selling raw, vacant land can be very difficult without the right system. Here are some of the challenges you’ll face:

• Limited demand - A smaller pool of buyers is interested in vacant land.
• No immediate use - Land doesn't provide income or have existing structures like houses. Most buyers want to build on it over time.
• Minimal market exposure - Land is rarely advertised on MLS or Zillow, so it gets little exposure.
• Difficult valuations - Appraisals help but many factors make the true value hard to determine.
• Complex sales process - Title work, surveys, legal contracts, deeds, access issues, and liens all complicate sales.
• Unknown problems - Any undisclosed easements, encroachments, zoning issues, etc. can kill a sale.
• Lengthy timeframe - It can take 1-2 years or longer for the right buyer to come along.

Partner with a Land Company for a Quick, No-Hassle Sale

To avoid the major headaches and time involved with selling vacant land on your own, partnering with a land buying company is an excellent option.

A reputable company like Land Boss has an established process for buying land at fair cash offers and closing quickly. They handle all the title work, legalities, appraisals, access issues, and liens so you don't have to. There are no fees or commissions charged to the seller.

The benefits of selling to a land buying company include:

• Fair, no-haggle offers based on appraisals and data
• Flexible closing dates aligned with your needs
• All cash offers - no financing complexities
• Quick closing - can close in as little as 7 days
• Professional handling of all legal documentation and title work
• No commissions or extra fees ever charged to sellers

Consider requesting a cash offer from Land Boss to see if selling makes sense for your situation. The offer and consultation are completely free.

While a land buying company won't pay full retail price, they make the sales process easy and convenient. If you need to sell quickly with no hassles, it's an excellent option.

Consult with Tax and Legal Professionals

Managing everything related to inheriting land can get complicated. Speaking with qualified tax professionals and real estate attorneys is highly recommended. They can help you make informed, smart decisions while avoiding costly mistakes. Take advantage of their expertise.

Final Words

Inheriting land can be a once in a lifetime event, but also involves many responsibilities. By following this guide, you can evaluate your options, address any issues, generate income if desired, and ultimately handle the inheritance wisely. If selling the land makes sense for your situation, partnering with a reputable land buying company like Land Boss simplifies the entire process. With the right strategy, you can make the most of this acquired property and enjoy your new status as a Pennsylvania landowner.

Frequently Asked Questions (FAQs)

What taxes will I need to pay on inherited land in Pennsylvania?

You will need to pay the ongoing property taxes on any inherited land in order to avoid tax foreclosure. The exact amount depends on the county and municipality where the land is located. You may also need to pay state and local transfer taxes when inheriting property. An accountant familiar with Pennsylvania real estate can help you navigate which taxes apply.

How long does the probate process usually take for an inherited property?

In Pennsylvania, probating a will and sorting out the inheritance process for real estate can take 6-12 months or longer. If the estate is complicated with multiple properties or heirs, it can potentially take a few years. The executor has up to three years to complete probate in PA. However, most standard cases wrap up in under a year.

Should I use a lawyer when inheriting land in Pennsylvania?

Yes, consulting with a real estate attorney is highly recommended when inherited property in PA. They can help you review the will, pay off debts legally, file new deeds, navigate probate court if needed, and transfer titles properly. The legal specifics of inheriting land can be complex, so legal expertise pays off.

What happens if property taxes on inherited land are not paid in Pennsylvania?

If property taxes are delinquent for a few years, the county can seize and sell the land at a tax sale in Pennsylvania. To avoid this, stay on top of paying the property taxes annually or as billed. If managing taxes would be burdensome, consider selling to a land buying company.

What expenses come with owning vacant inherited land in Pennsylvania?

Aside from property taxes, you’ll also need to budget for maintenance costs like brush clearing, grading, mowing, snow removal, etc. Liability insurance is also important. And if selling, you may opt for professional appraisal, survey, title work and legal fees. Estimating all these costs will help guide your decisions.

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