What happens when an owner dies intestate with no known heirs?

When an owner dies intestate, meaning without a valid will, and has no known heirs, the principle of escheat applies. Escheat is a legal process by which the state assumes ownership of the property. This occurs because the law specifies that when a person dies without a will and without identifiable heirs, there is no rightful individual to inherit the deceased's assets. As a result, the state steps in to claim the property, ensuring that it does not remain unclaimed and can be repurposed for public use or added to the state's resources.

In this situation, the other choices do not align with the legal process in cases of intestacy without heirs. Friends cannot automatically receive the property unless a legal claim is established, which is not the case under intestacy laws. Auctioning the property is also not a standard procedure; properties that escheat typically become state property rather than being sold off. Lastly, while the government may maintain certain properties, in cases of escheat, the focus is on the transfer of ownership to the state rather than ongoing maintenance without a transferred title.