Kovats Real Estate School Practice Test

What happens to property when the owner dies intestate and without legally qualified heirs?

1. It becomes state property through escheat

2. It is sold at public auction

3. It is distributed among relatives

4. It is inherited by distant relatives

The correct answer is: It becomes state property through escheat

When a property owner dies intestate, meaning they have passed away without a valid will, and without legally qualified heirs, the law generally dictates that the property will escheat to the state. Escheat is a legal doctrine that ensures that property does not remain ownerless. Instead, the state takes over ownership of the property to maintain it within the public domain. This process ensures that there is a clear title to the property, which becomes important for administrative, legal, and tax purposes. The state will often assess the property and may eventually sell it or utilize it for public benefit, depending on the circumstances and laws of the jurisdiction. The other scenarios do not reflect the legal principles surrounding escheat. For instance, selling the property at public auction would not occur unless specified by law or a court decision in a different context, and distribution among relatives or inheritance by distant relatives would only be applicable if there were eligible heirs, which is not the case here. Thus, the correct answer reflects a process intended to manage unclaimed property appropriately.