Posted by Nike on May 17, 2004 at 15:31:48:
I appreciate the response. That the tax lien investor has standing suggests at NJ is concerned with this potential problem–interesting.
Thanks. Good luck to you.
Question re: best way to get the deed - Posted by Jim (NJ)
Posted by Jim (NJ) on May 16, 2004 at 16:19:03:
I would appreciate some advice on this deal. House is deeded in the name of a corporation which is in probate. The house is in the process of being foreclosed brought on by a tax lien foreclosure (judicial proceeding). There are 5 heirs two of whom are executors of the estate, the other 3 renounced any administrative role in the estate. The redemption amount is $78k. House needs $60-$75k in repairs after which it would be worth $350k. The final judgement for the foreclosure is scheduled for June 2nd. Each of the heirs is to receive an equal distribution from the liquidiation of assets within the estate. The house is in NJ.
I am not sure of the status of the corporation as it was owned by the deceased. The heirs cannot collectively come up with the funds to redeem. They are willing to sell the house to me for a very good price. Should I get the 2 parties who are executors to sign a warranty deed over to me in the name of the corporate entity, or would I be safer to get all five heirs to sign a quit claim deed over to me?
I am prepared to redeem the tax lien but want to make sure I do this in the best possible way. Your ideas are most welcome and this board is the greatest.
Jim (NJ)
Easiest way… - Posted by Ben (NJ)
Posted by Ben (NJ) on May 17, 2004 at 12:24:16:
contact the tax lien holder, ask them if they would be willing to assign you their lien (for a substantial premium over redemptive value of course)and then you finish the foreclosure. This will be cut and dry and give you a nice clear title at the end of the process. Of course some lienholders are looking for the property and may tell you to go jump in the lake but many are only too happy to get redeemed and make a nice premium to boot. I know many of the tax lien investors in NJ so if you want to email me privately, I may have a contact there. You also need to be careful you don’t run afoul of the “heir-hunting” statutes in NJ (NJSA 54:89.1). In a nutshell, the courts are cracking down on people who comb through the tax foreclosure files, glean info on the parties whereabouts from the plaintiff’s efforts and wait until the last minute and then procure a quit-claim deed from an heir for nominal consideration. Many redemptions have been judicially barred due to these
heir-hunting, land-pirating tactics.
From a fellow armpit investor… - Posted by IB (NJ)
Posted by IB (NJ) on May 17, 2004 at 24:13:48:
I just found out that (Dirty) Jersey is considered the “armpit of the world” from a friend in Philly 
Anyway, it seems like there are a couple of issues so I’m going to try and address them from my experience. I regularly work pre (tax) foreclosures and a few probates here and there so I have some experience with what you?re going through.
ISSUE #1: "House is deeded in the name of a corporation which is in probate. " - Is the estate of the (deceased) owner in probate or is the corporation in probate. I’m asking because you later stated that you weren’t sure of the status of the corp. I don’t think a corp. can actually die and have it’s estate probated. But I’m not an attorney so I don’t know. If you mean that the estate of the owner is in probate, then why are there 2 executors? I’ve never heard of that. I’ve heard of a will listing an executor and a co-executor in case the executor is somehow considered unfit or unwilling to serve. You also stated that the other 3 renounced which I thought only occurred when the owner died without a will (I?ve heard of the ?Executor? of a will renouncing but not 3 people in a will), and thus someone wishing to become the administrator of the estate filed a letter of administration. In such a case, the other rightful heirs would all have to renounce in order for the applicant to become the Administrator of the estate. If that’s the case, then your use of the terms ‘executor’, ‘administration’, and ‘renounce’ are quite confusing.
This is important because you typically only have to have the Executor or Administrator of the estate deed the property. The Executor or Administrator is then responsible for distributing the excess proceeds from the sale to the remaining heirs.
ISSUE #2: “I am not sure of the status of the corporation as it was owned by the deceased.” - This is a tricky one. The corporate entity is totally separate from the actual owner so I’m not sure what happens when, not only the corp. becomes inactive with the state, but the officer of the corp. dies. You really should speak with a lawyer on this. I DO know, however, that the corp. will have to be reactivated with the state in order to convey property owned by the corp… In order to do this, tax returns that haven’t been filed (if there are any) will need to be and a CPA usually has to get involved. I believe there are companies out there that reactivate ‘inactive’ corporations for a fee. But first you should call the NJ Division of Revenue at (609) 292-9292 and get the official status of the corp. You may also want to contact your title company to see what it is they will need to insure title. They may want proof of an active status of the corp. along with probate information. In the end, how you proceed will depend on the advice you receive from your attorney and your title company.
Hope this helps,
IB
Re: Easiest way… - Posted by Jim (NJ)
Posted by Jim (NJ) on May 18, 2004 at 11:03:13:
Ben,
Thanks for the advice. I did make the contact that you provided me with. Unfortunately in this case, the lienholders have decided to complete the foreclosure and put the property on the market. I asked if they were aware of the extensive rehab needed for this property and they admitted that all they were basing their valuation on was a drive by. I told her the current occupant, a son of a builder, believes the best course of action is to tear it down (true story) but she said that her boss had made the decision to market it.
Because of IB’s contribution regarding the issues surrounding conveyance and some advice from my lawyer, I think the best course of action at this point would be to get back in touch with them after they take possession and get a better handle on the actual as-is value and the extent of needed repairs.
Anyway, many thanks for your able assistance.
Re: Easiest - Posted by Nike
Posted by Nike on May 17, 2004 at 14:40:11:
The approach you question is a good way to buy lower-middle to lower-income homes. If an investor steps-in and gives an owner/or other party of interest some cash in return for a quit-claim deed, he must then redeem the delinquent taxes, including interest, expenses etc. that the tax investor is entitled to. I can understand why the tax lien investor might resent that another investor has stepped-in, but the owner/party of interest will have their interest foreclosed if nothing is done. How often is this litigated in New Jersey? Who challenges the transaction-- Does the court give standing to the tax lien investor to challenge?
Correction NJSA 54:5-89.1 - Posted by Ben (NJ)
Posted by Ben (NJ) on May 17, 2004 at 13:03:39:
for you legal eagles!
Re: From a fellow armpit investor… - Posted by js-Indianapolis
Posted by js-Indianapolis on May 17, 2004 at 16:28:09:
No, Cleveland is the armpit. I think Jersey is more of the ass.
Don’t feel bad though. Yakov Smirnoff said it best. he said, “Every country has a city the people make fun of. For instance, back in Russia, we make fun of Cleveland.”
hehehe
Re: From a fellow armpit investor… - Posted by Jim (NJ)
Posted by Jim (NJ) on May 17, 2004 at 09:24:03:
IB
And here I thought that just Newark was the armpit of the world but now it’s the whole state? Do we have McGreevey to thank for this?
Okay, you’re right. I confused the issue using the terms executor when I meant administrator because the owner died without a will. Therefore, there are 2 administrators and 3 who renounced administrative duties. The corp is in the estate of the deceased owner that is in probate.
“The corp will have to be reactivated with the state in order to convey property owned by the corp.” IB, I don’t believe that there is sufficient time left for this to occur. Would you be happy with a quit claim deed from the 5 heirs absent the resuscitation of the corp? I have called my title company and am waiting for one of the seniors to get back to me on this. I have also put a call into my RE attorney and am waiting for him to phone back.
Thank you for your response. I read many of your posts as they are both informative and entertaining.
Jim (NJ)
Re: Easiest - Posted by Ben (NJ)
Posted by Ben (NJ) on May 17, 2004 at 15:09:38:
This is litigated all the time in NJ. Yes, the tax lien investor has standing. Don’t get me wrong, the property owner has every right to sell his property prior to the forclosure and the buyer has every right to buy it. The heir hunting situation only applies under certain circumstances. The resentment comes in when the buyer piggybacks on the the plaintiffs efforts, finding the property through the lis pendens, tracking the foreclosure through the courthouse, using the plaintiff’s own information to locate heirs and then snatching the property at the eleventh hour right out from under him for nominal consideration. If the buyer even paid a reasonable amount the courts would allow it but usually the buyer has thrown an heir, who has little to no interest in it anyway, fifty or a hundred dollars. I have had people literally try to extort deals from me. They call me a few days before judgment and say “I’ve obtained an interest in the property, I can redeem you out right now, however I’d rather split the profits with you.” I have litigated and won a few of these cases. The reason this policy against heir-hunting exists is because tax lien investors are accorded a certain amount of respect by the NJ legislature. NJ property taxes are the highest in the nation, it is such a problem it is bordering on revolution. Anyone stepping in to fill the monetary gaps left by delinquent property owners are considered almost sacrosanct. Lien buyers not only buy the initial lien but continue to keep subsequent taxes current for years, they then foreclose and bring formerly delinquent properties back on the tax rolls. They fix up abandoned eyesores and restore them to the market. All without looking to the state for any assistance. To unfairly lose your deal at the last minute destroys the incentive of the lien buyer. The state is very dependent on lien buyers and wants to keep them happy therefore the courts have been very suportive of lienholders rights in these cases.
Re: Correction NJSA 54:5-89.1 - Posted by IB (NJ)
Posted by IB (NJ) on May 17, 2004 at 17:46:30:
Hey Ben. I was looking for that statute and couldn’t find it. I even did a search on our state’s website using the words “heir hunting”. Could you point a legal eagle in the right direction? Thanks.
Re: From a fellow armpit investor… - Posted by IB (NJ)
Posted by IB (NJ) on May 17, 2004 at 17:47:38:
Ouch that hurts! Well everyone in this state can kiss my New Jersey when I move to the Sunshine state in a few years - LOL
Have the heirs file an answer - Posted by IB (NJ)
Posted by IB (NJ) on May 17, 2004 at 12:07:38:
to the complaint with the courts. This may delay the process until you get the corp. reinstated. I’m almost sure your title co. will want the corp. in active status. I would have my attorney handle all the paperwork just to make sure I keep total control over the deal and get it done on time.
Thx for the compliment. I’m glad you enjoy the posts.