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.