DEED - Posted by jason hardy

Posted by Nate on March 23, 2001 at 17:57:02:


Sorry about the subject. I couldn’t resist doing something funny with “DEED” in big letters.

I don’t know if this is going to work for you the way your partner hopes it will.

Based on the information you have provided, your partner has bought this duplex on a land contract (contract for deed). Without getting into legalese, basically this means that they entered into an agreement to pay the seller a certain amount every month, probably with a balloon several years out, and they will only get the deed when the payments are DONE.

The problem is that the seller is not going to give them a deed until the land contract is paid off. That is sort of the point of a contract for deed. I am sure it says as much in the contract. Furthermore, depending on the language in the contract, it may or may not be assignable to you.

While they may have beneficial ownership (meaning they can occupy or use the property, collect rents, take the tax deduction, and the like), they do not have equitable ownership and cannot freely transfer the property to you.

What I would suggest is this: check the land contract to see if it is assignable or assumable. My guess is it’s not, but you never know. If it’s not, then the only way for them to get a deed from the seller is to pay off the seller. They can do this either by making the payments stated in the land contract (and waiting however long that takes) or by refinancing.

If I am correct that they are broke, they will probably have trouble refinancing unless they have a lot of equity in this duplex. But I don’t know; maybe they should see a mortgage broker and see if they can refinance. Then they could sign the property over to you via warranty deed, subject-to the new mortgage.

Sorry to say, Jason, but what it sounds like to me is that this person is broke and is trying to get out of paying you what they owe by giving you something they don’t own.

Good luck.

DEED - Posted by jason hardy

Posted by jason hardy on March 23, 2001 at 08:41:43:

I have a partner that owes me. For this IOU they are going to give ownership to me of a duplex that they own. They are owner financing the property from the original seller, but have yet to get the deed. The original seller owns the property outright. Whats the correct process that my partner should go through for the easiest way to get the deed recorded to them, and then from their name to my name? They only have a purchase contract that is signed by both parties stating the owner financing and the price. What else do they have to do document wise, or anything wise for that matter? Have the original seller sign a general warranty deed, have it notarized and recorded? And then when this process is done, quit claim or sign another general warranty deed to myself, and record this after? Thank you very much!