Posted by djswett on November 04, 2000 at 17:44:22:
Both of your questions are mired in the potential of a lawsuit and it will involve your money. If the deal can’t be straightened up, a lawsuit is not worth it. The cost for an attorney will be so high, that you would be smarter to just walk away from either the deal or any money you have in it.
Having a broker act as the middle person is not going to protect you for doing your own due diligence. Many states do not have the protection of title insurance and the escrow closing is very casual and will put your money at risk with this kind of tax lien problem.
You said you had a land-MH deal; yet the tax lien was only against the MH. That does not compute. The local tax authorities attach whatever equity that they can to enforce their tax liens. If they went after only the MH, I suspect that the land is owned by some other entity. You better find out who.
Also, you mentioned that the end of the redemption period just ended. That is good because that means that the finance company can now sell the MH without any claims from the prior owner of the MH. This does not mean that they are selling the land. Quoting your words “only the MH is in discussion”.
Also, if you are obtaining title to either the MH only or the MH and land together thru the tax lien title, maybe legal counsel will advise you that you need to also sue the previous owner to make sure that there will be no residual claims by that previous owner. It could have been a divorce (H/W) and yet only the hubby signed on the MH loan, thus the ex-wife would have potential community property rights that need to be quit claimed.
With real property, the best deed of title transfer is “warranty”, which gives you recourse against the seller for putting you into a bum deal, but usually these outfits give you a “quit claim with no covenants”. Thus, they give you only the same title that they have and it can be screwed up. Thus, they take your money and you get a screwed up title.
One solution is to go to the tax assessor and ask to see the file folder for that property (MH and land). They have quite excellent records. This will give you a bit of guidance as to the names of all the past owners and exactly what the legal documents on file for your current tax lien owner.
You have an agent/broker to share your concerns, perhaps someone in their organization has enuf experience to guide you with some of the hooks in this deal.
Remember a screwed up deal is a potentially rich deal to you. Someone has to solve the problems and you can be that person. By high lighting the bad aspects of the deal, you can hammer a better price and gain some indemnification to protect your bucks–this is where some good money is made in real estate.
DJ