What occurs when a property owner dies without heirs or a valid will?

When a property owner dies without heirs or a valid will, the legal principle that applies in such a situation is called escheat. This process ensures that the property goes to the state rather than remaining unclaimed or effectively abandoned. Escheat serves several purposes, including maintaining the integrity of land ownership and ensuring that properties do not become derelict.

Upon the death of the property owner, if there are no identifiable heirs, the state takes possession of the property following the escheat doctrine. This means that the government may ultimately use the property for public purposes or sell it. It is an essential legal concept in property law, designed to provide a mechanism for the disposition of property when ownership cannot be assigned.

In contrast, the other options would not accurately represent the outcomes in such scenarios. An inheritance being automatically transferred does not apply when there are no heirs; property cannot be bought by the government in the absence of an established process, and while auctioning the estate might seem plausible, it is not the standard process in cases of escheat. Therefore, recognizing escheat as the correct answer highlights the state's role in property management when ownership is unresolved due to death without heirs or a valid will.