Question about a mobile home note assumption - Posted by Karl (Oh)
Posted by Karl (Oh) on March 22, 2009 at 14:02:13:
I have an explosive situation right now with two customers of mine in the same home, and am looking for some legal info.
I sold a mobile home in a park on a note to buyer1 two years ago. Last summer he invited a couple, buyer2, to move in to help pay the bills. Last Fall they all approached me asking if buyer2 could assume buyer1â??s loan.
I had buyer1 sign a release and surrender of the home and loan over to buyer2, had buyer2 sign a new promissory note and security agreement with me, and had both parties sign an assumption agreement stating that buyer1 would pay 2008 taxes through the year (so I could transfer the title), and a $150 assumption fee to pay for me re-doing the title work. I put an expiration date on the assumption agreement of Dec 31, 2008. I did this because if I didn’t transfer the title before the end of the year, 2009 taxes would also have to paid to transfer the title. I also added a line item in buyer1â??s surrender and release agreement that it wasnâ??t valid without the accompanying assumption agreement. I didnâ??t want to release buyer1 from the loan without putting buyer2 on the hook at the same time.
Well, buyer1 never paid the taxes or the assumption fee. So I never put the title into buyer2â??s name. I told both parties that I was just waiting on the funds to complete the paperwork, but buyer1 just couldnâ??t pony up the money.
Now, three months later, Buyer1 has accused buyer2 of stealing his pain meds, and heâ??s trying to kick them out of â??hisâ?? home. Buyer2 thinks that because he signed all the documents and has been paying the lot rent and mortgage payments for almost a year that the home belongs to him.
Buyer1 stated to me that because he never paid the taxes or the assumption fee before the deadline, the agreements he signed have expired. And Buyer2 now wants to pay both 2008 and 2009 taxes and the assumption fee so I will go finish changing over the title into his name.
Can buyer1 cause the entire agreement to nullify by not performing as agreed? And can buyer2 cure it all by just paying buyer1’s expenses now?
If these two show up in court, who do you think would win? My preference is to keep buyer2, but really I just want my payments from somebody. But I donâ??t want to end up losing both buyers. If one party legally has a case over the other, Iâ??m interested in knowing which horse to root for if they have it out in court.
Any thoughts?
Karl Kleiner