In the early 90s, renovators working on an interior wall of a home in South Deerfield, Massachusetts—an area of the country with deep colonial roots—discovered the skull of a horse
wedged between the walls. Examining the find, homeowner Rocky Foley extracted a strip of rolled paper, on which was written the names of a militia colonel, his wife, and six children who had lived in the house in the 1840s, but not the name of the horse. This item, unsurprisingly, was not mentioned on the title deed.
When you’re buying a house to renovate and sell for a return, you’re also buying everything inside and underneath that house, including any undiscovered artifacts or archaeological remains. Odds are good you won’t discover Catherine de Medici’s hairpin in your septic tank or the bones of the usurper King Richard II in your crawlspace, but many artifacts from the rich history of the United States and thousands of years of Native American civilization may lie hidden in the walls or buried just underneath homes across the country.
Fascinating as they may be, such discoveries can delay the renovation process, increasing the price of repairs and prolonging exposure to carrying costs. While the museums might be thrilled by the find, a real estate investor focused on the bottom line may be forced to write off this “luck” as a loss. The good news is that canny investors may actually be able to use a discovery to increase the value of the home. The first question, of course, must be: “If I find something, what do I do with it?”
Archaeological Discoveries on Private Property are Protected by Federal Law
The National Historic Preservation Act of 1966, which governs such discoveries in the United States, is lenient, especially in comparison to the protections in place in many other countries. In deference to the strong American tradition of private property rights, artifacts discovered on private property belong to the owner of the property. No archaeological review is federally mandated.
However, the federal law provides for the creation of state offices, and at the state, local, and tribal levels, the laws can be more strict. For one, if the project is funded with any state, local, or tribal money, or is under the jurisdiction of any easements or land conservation regulations, archaeological discoveries can trigger a review. Also, certain states and localities and most tribes are simply stricter than federal law requires, and may require reviews for discoveries. Consulting with an archaeologist can help you learn if your property is under any such restrictions.
On the Unfortunate Discovery of Human Remains
Pottery isn’t the only thing that comes to us out of the past. If you encounter human remains—no matter how old they are—you are legally required to contact the police or coroner’s office. The coroner and representatives of law enforcement will investigate and determine if the remains constitute a criminal investigation or referral to the state archaeologist’s’ office. Unfortunately, either result will halt construction pending review, and, depending on the nature of the find, could possibly delay the project indefinitely. Archaeologists may designate avoidance, minimization, or mitigation procedures to protect the resource, and may even begin a controlled dig. While projects funded by universities or societies will not bill you for the service, the costs of holding the property while the work is underway can very quickly consume your return. You should consult with your accountant throughout the process to help determine the best strategy to minimize taxes and other costs.
If work must be halted, an investor’s options are limited:
- Sell: You can attempt to sell the home as is, perhaps to a buyer with a historical interest such as a preservation society.
- Rent: If you are able, taking in renters can help generate revenue from the property until work can be completed and it can be sold for better market value. If you do choose to undertake the renovation after the review is complete, be sure not to hire an uninsured contractor.
Perhaps the best remedy is prevention. Consulting with the state historic preservation office before renovating old homes or in areas with rich archaeological histories can inform you of the likelihood of discoveries, such as proximity to an old Native American burial ground. This risk can be accounted for before purchasing the investment.
Questions of Ownership
While the finders of the horse skull in South Deerfield may not have squabbled over possession, some discoveries—like diamonds under a floorboard or $500,000 stuffed into ammo cans in the walls—will raise the question of finders keepers. Laws differ between states, and preparation is key to reducing risk. No matter who walks with the jewels in your jurisdiction, a legal squabble over possession can be long and costly, cutting into your ROI. Knowing the law in your state can head off any conflicts before they arise.
Investors can exercise significant discretion in handling less monetarily valuable artifacts that are not protected by law. Artifacts can be left where they are, kept in storage, sold, donated to a museum, university, or society, repatriated to the original owner’s heirs, or destroyed. An ethical review of the cultural value of the objects in question will determine the correct course of action.
If the right steps are taken, discoveries can increase the home’s value by providing evidence that the home deserves designation on the National Register of Historic Places. Homes that earn this designation increase in value due to the increase in prestige. Tax breaks may also be available at all levels of government for designated properties. At the state and federal levels, tax abatement is entirely voluntary, and the property may be renovated or sold at the will of the owner.
The rich history of the United States surrounds us, even as real estate investors, interacting with our modern lives in unexpected ways. Knowing what to expect when faced with unexpected intrusions from bygone years can ensure that your work doesn’t get disrupted in a way that will negatively impact your ROI. Since 1996, HomeVestors® independently owned and operated franchises have purchased over 140,000 houses. As a result, HomeVestors® has the knowledge base and resources to help you navigate unexpected discoveries. To learn more, contact us today or request franchise consideration.
Each franchise office is independently owned and operated.
Image Source: Wikimedia Commons