LEGALITY OF A 'WICKED' TITLE ISSUE - Posted by Devaki

Real Estate Investing Real Estate Law
1

Posted by JT-IN on December 18, 2002 at 23:21:30:

Hi Andy:

The Tenants in Common is how this property is being held, and upon any owner becomiong deceased, then it is a probate situation, instead of a survivorship matter. The fact that it is not a survivorship matter will cause Dev more problems here, no doubt.

While from a purely simplistic viewpoint, a JTWROS, or Joint Tenatns, with Right of Survivorshiop would be simpler, it may not serve the needs of he property owners. In the case of siblings owning a property, they would most likely not want their remainder interest in the property to be deeded over to their siblings, they will probably want their interest to go to their children. This is why a Survivorship deed would not work here. Kind of like sometimes a mechanic uses a hammer and the next time he uses a screwdriver; different tools for different tasks. Deeds are no different.

Good that you are reading up on those deeds… keep reading and keep learning.

Not sure wheather you meant to insult me or not… asking if I was a Realtor or an Attorney… Just kidding, I am neither. I am a full-time Real Estate Investor. It is a noble profession, as is that of a Realtor and an Attorney…

Nice to hear from you Andy, stick around and learn lots here on creonline.

JT-IN

2

LEGALITY OF A ‘WICKED’ TITLE ISSUE - Posted by Devaki

Posted by Devaki on December 18, 2002 at 19:00:03:

Wondering if you could help me with my new ‘wicked’ problem -

I have a contract on a property - turns out it is owned by 6 people - 3 sisters and 3 step brothers. Some of them are dead and some of them are missing. I approached my attorney and according to him it involves a 2 step process:

a) I must first accquire interest in the property - so buy over the share of each of the living and available parties.

b) Initiate court proceedings by which - a partition suit to be filed in the VA courts so the title can be cleared and I can take over the property.

I received a lengthy contract from my attorney this evening $200/hour to handle the case. What I don’t like about it is there is no ceiling to the cost. I am prepared to absorb approx $3500 if it comes to it but how do I know what this could possibly cost me.

He has indicated that it could take a few months to clear up.

Your advice would be appreciated.

Thanks

3

Attorney gets an “A+”… in addition to - Posted by JT-IN

Posted by JT-IN on December 18, 2002 at 19:41:13:

his $ 200.00 per hour.

Your Atty has given you excellent advice here. You have also assimilated this advice well… It is best to take great notes when paying that kind of money for advice, so you never have to ask the same question twice… LOL

You mentioned the $ 3500.00 being the ceiling. Hopefully this is allocated for legal advice and not the cost of he property. What will happen is this… the property will go up for auction, as Sheriff Sale, and sell to the highest bidder. If that is you , so be it, if not, you lose the property but get whatever pro-rated share of the price as it equates to your ownership percentage.

e.g. You are successful at buying out half of the siblings, and it sells for 20K, you get 10K, less fees. Of course you will be responsible for the cost of the fees to bring the Partition action, so this will be costly… guessing about 2K.

What value do you place on the property…?
How many of the siblings can you communicate with…? (No sayonces (sp) allowed).
Of those, how many are willing to sell you their interest in the property…?
Are any of the living siblings interested in owning the property…?

Based upon the answers to the above info, maybe we could provide more answers later… Wishing you all the best in the Partition action.

JT-IN

BTW: Some crazy things can happen in a pratition sale…

4

Seances(nt) - Posted by Sean

Posted by Sean on December 19, 2002 at 09:39:27:

(nt)

5

LEGALITY OF TITLE ISSUE - Posted by Devaki

Posted by Devaki on December 18, 2002 at 20:05:51:

Hi! In reply to JT-IN’s response - I already have a contract with this woman to buy her property for $ 31,500 so if I have already paid the share to the living heirs, how come the court can decide to auction the property?

I am not so clear about this step of the process. Could you please explain.

Thanks

6

Title Issue & Partition Sales - Posted by JT-IN

Posted by JT-IN on December 18, 2002 at 20:49:19:

Devaki:

Your statement: “I already have a contract with this woman to buy her property for $ 31,500”

How can this gal sell you what she doesn’t own…? She/they hold title in Tenants in Common. She is a part owner, and can only speak for her share she owns. Everyone that has a share of the ownership, including that bil who is MIA, should have signed the contract to purchase. Lacking all parties signature, the document you have has no value. Again, the only thing that the Lady you are dealing with can sell you is her interest.

Admitedly, I do not have all the details here, and am going on some assumptions here, so thismay not be exactly right-on.

Your statement: “if I have already paid the share to the living heirs”.

Don’t tell here that you have already signed sealed and delivered on the property… You have paid her at closing…? the $ 31,500…? I, yi, yi. This would not be good, because if you did, you have a clouded title, and really do need help.

You may also ask the Atty about a “quiet title” action, in order to clear the title. This probably will not work but it is worth a try, especially if you have already paid the 31.5K. Let me also ask you, assuming you did close on and pay for the property already… Did you have an Atty represent you in this transaction…? Did you attempt to get title insurance…?

Now, on to the Partition Sale… How can the court auction my property…? What a partition sale is, when there are numerous owners, that usually do not agree upon the disposition of the property, it will be ordered sold, in order to settle the dispute. This is one of the problems with RE, you can’t tear it in half and give part to each, so you financially dispose of it, and then divide the proceeds. So in a partition sale, the property usually must sell at public auction; Sheriff Sale, as it is a court ordered sale. It must be advertised and sell to the highest bidder. That could be you, me or the gatekeeper. When it is over, the proceeds will be divided between the property owners…on title. In this case, if you have acquired 2/3rds of the property, and lets say you were the highest bidder and it sold for 33K, you could simply pay 11K to the bil, and be done with it, getting clear title. Or lets say I bought it for 33K, then you would receive 22K, and the bil would get 11K, and I get the clear deed. Hopefully, this makes some sense.

Post any question you have concerning what part you may not understand. OK, feel free to post your displeasure with the parts you do not like as well. Unfortunately, the parts you do not like are not subject to change… Sorry.

Just the way that I view things…

JT-IN

7

Re: Title Issue & Partition Sales - Posted by Andy L (MI)

Posted by Andy L (MI) on December 18, 2002 at 23:04:31:

Wow!

That was a good answer. Just to clarify a few things. (This is coming right form my realtor book. Tenants in common allows different interests between the owners. Upon the death of an owner their ownership goes to their heirs in the will, not to the other owners. That could be a problem if in the deceased wills their ownership in the property didn’t go to the other owners. You get all that. Ok

Now there is a thing called Joint Tenancy. That is where every owner owns the exact same share in the property. So if there are 4 owners and one dies the other 3 own 33.3% of the property. If another dies then the other 2 own 50%. In a Joint Tenancy it automatically gets passed down to the other owners, no matter what is in the will.

The way you can find out is go to the Register of Deeds and have them pull the most recent deed and see who has ownership and what amount. Ideally you want a joint tenancy because every time a person died thats one less owner in the property.

What JT said about the partition sales is perfect.

I hope that helps, and by the way JT are you a realtor or lawyer. That was a REAL good answer. If not you really know your stuff.

Andy Light