Posted by John Merchant on March 27, 2003 at 10:32:04:
Yes, why wouldn’t the Seller have a right to come after you? Unless you didn’t agree to make the payments. Did you?
But if YOUR buyer agreed to pay, then when you’re sued, you can cross-action against your buyer and he’ll have to answer for his inaction and default.
Good object lesson here: Just as in mortgage or D/T secured loan which you have assumed when you sell, the lender isn’t stuck with what you do. Why should it be? You made a written promise to pay that lender, now you’ve got to stand behind it or pay the consequences.
Same with your sale. If your buyer agreed to pay, then he’s got to do it.
And remember: Just because you assign something to Assignee, that doesn’t give him the automatic liability of DOING anything! Nope, that has to be written in and agreed by the buyer, very clearly and distinctly.
Odd, this seems to happen a lot: Seller, on mere assignment, figures the assignee has thereby taken on some responsibilities…and he’s dead wrong! Unless that buyer/assignee specifically contracts to make payments, etc. he, the assignee, has NO liability!
assigning sub to contract - Posted by Steve (LVNV)
Posted by Steve (LVNV) on March 27, 2003 at 01:22:45:
I recently located a property and wrote the contract subject to the existing 1st, 2nd and 3rd trust deeds. No money down, it was mortgaged to the max. I assigned the contract to another investor, who has yet to make a single mortgage payment(2 months arrears). Now the seller is threatening to sue me. Question: Does the seller have any recourse against me or should he be pursuing the new buyer (assignee)? And if so, what recourse does he have against the new buyer?
Correction - Posted by John Merchant
Posted by John Merchant on April 01, 2003 at 15:24:40:
Oops…I don’t know why I didn’t see the “subject to” language, and if you truly did buy subject to, and didn’t specifically agree, in writing, with the lender, to make those payments, then the lender wouldn’t have any recourse against you.
Now, the seller sure might, if you made any kind of agreement to make those payments, and haven’t done so.
In fact, seller might even be claiming fraud if you’re not paying, and there’s been enough of this around the country to maybe get an Attorney General’s, or District Attorney’s interest in prosecuting the non-payer. There have been some folks get big sentences for equity skimming just this way, so it’s not something I think you want to tangle with.
Re: assigning sub to contract - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on March 27, 2003 at 20:31:10:
It depends on what the contract that you assigned, says,
If it says subject to; and makes no referenct to payment, you then have acknowledged that you know the mortgages are there. If you did not agree to pay them then you can not be made to pay the payments. You may be named in the foreclosure action as a person who “has an interest” in the property (so what?).
If you “assume and agree to pay”, you have then signed as personally liable, and all of your assets are at risk. If this is the case you need another course.