Posted by Bud Branstetter on January 14, 2000 at 10:33:37:
I’ve seen it say they will insure against anything recorded. So that means if it isn’t recorded they wouldn’t defend/insure against it. I’ve heard as many horror stories abount them declining to pay as I have about title companies paying. I’m sure the ratio is much more that they do pay but they may claim their not liable until their sued also. It’s a cruel world at times.
Tenant has L/O for my house – help! - Posted by Bill
Posted by Bill on January 14, 2000 at 24:53:00:
About six weeks ago I purchased a SFH for 64K (FMV 95K). Today a woman shows up who claimed to be a daughter of the seller and she had a L/O her mother signed about 8 years ago. The contract runs for about 2 more years. The contract is short. $70.00 a month for rent and $10.00 a month for option consideration. And a purchase price of 40K. The L/O was not recorded or the title company would have caught it and it was not notarized. She wouldn?t let me take it to make a copy and she held it while I read it. She said she wants to buy the house in 2 years.
Now here is the problem, I bought from another daughter who had power of attorney. The mother is old and has lost her memory. I called the Daughter (POA) and she didn?t have a clue what I was talking about, but she did say that she hasn?t talked to her sister in about 12 years.
I can?t talk to my lawyer until Tuesday.so I hope someone can tell me what kind of mess I have on my hands. BTW, the sellers have probably already spent the money. I am sure they are broke or close to it. Could the title company be on the hook for this or am I jumping too far ahead?
Thanks – Bill
Re: Tenant has L/O for my house – help! - Posted by JPiper
Posted by JPiper on January 15, 2000 at 03:32:49:
I agree with a statement below by Joe?.in my state leases in excess of one year have to be recorded. Further since this is an unrecorded contract, the issue I would be concerned about vis a vis the title insurance and the validity of your deed is whether there was ?constructive notice? regarding this lease option. Constructive notice basically means that the information was available and that you could have reasonable known it. For example, let?s assume that the sister/optionee executed the lease/option, and then took possession of the property. Let?s further assume that that she was in possession and living in the property at the time you viewed the property. I think it?s possible if these were the facts that it could be construed that an unrecorded contract has precedence over your deed. And it?s also possible that the title insurance might be ineffective in this particular type of case.
However in your case, it doesn?t sound as if there was constructive notice. It sounds as if this woman came out of the blue. This is exactly what title insurance is for. I wouldn?t be too concerned about this?.except to say that I would definitely notify the title company. Who occupied the house at the time of sale? If it wasn?t the so-called optionee, who was it? Did a lease exist? These may be important facts.
Incidentally, a warranty deed contains certain warranties. One of those is the ?covenant of seisin??through which the grantor warrants that he is the owner and has the right to convey title to the property. If this warranty is broken, the grantee can recover damages up to the full purchase price. Further, a warranty deed also guarantees that the grantee may recover damages if the title fails at any point in the future. There is also a warranty against encumbrances other than those specifically stated in the deed. A breach of this warranty would entitle the grantee to sue for expenses to remove the encumbrance. The point is that the title insurance is one level of guarantee?.but another level is the warranties associated with the deed itself.
It might be interesting to speak with your attorney?.see if there is some type of quick action that either you or the title company could file that would tie up any funds or other assets of the mother AND the attorney-in-fact pending a resolution of this situation. And by the way, one of the damages I would be claiming IF it ever came to this would be the built in equity that existed at the time of purchase.
Understand that you currently possess the property?.this woman will have to press her claim. Whether she?s willing to do that remains to be seen. My guess is she won?t.
Re: Tenant has L/O for my house – help! - Posted by Laure
Posted by Laure on January 15, 2000 at 24:27:05:
What I would do??? On Tuesday, I WOULD notify the title insurance company IN WRITING, CERTIFIED MAIL, RETURN RECEIPT REQUESTED. Second, I would “put the lady off” by telling her that her claim, if any, is with her family and not you. That her contract was with them and not with you. CONFIDENCE (not arrogance) in your handling of her could just put an end to this mess. She may just be calling your bluff.
I was threatened a lawsuit in my retail business last month. It had to do with copywrite law. He had a national organization that would hire an attorney to press charges, and he could have won over 100,000.
I have to admit, is sounded like the guy had me. After about an hour of conversation, he said he’d just drop it all because I didn’t sound like I was intentionally trying to do harm. Case ended
Good luck, Stay confident. After all, YOU didn’t do anything wrong. And if she can’t afford an attorney, she probably is just yelling and screaming because it’s all she can do.
Re: Tenant has L/O for my house – help! - Posted by Bassman
Posted by Bassman on January 14, 2000 at 14:10:24:
Last time I heard, " He who gets to the courthouse first, wins". If the l/o sister would have recorded her option 8 YEARS ago, she would have a valid claim.
Since she did not, her loss. Thats the reason they came up with the “recording” idea, To put a stop to claims like this.
But then again, the way the courts have been lately, you never know.By the way, why aren’t you able to talk to your Lawyer till tues? Isnt there anyone else in his office that can help? Or maybe someone he can refer you to in an emergency like this?
Hang in hter.
More info Re: Tenant has L/O for my house – help! - Posted by Bill
Posted by Bill on January 14, 2000 at 13:32:17:
The ?other? sister had a stack of cancelled checks and 3 or 4 envelopes that looked like they were stamped ?return to sender.? I also got title insurance not just a title check. I?m beginning to feel a little queasy about this.
Re: Tenant has L/O for my house – help! - Posted by Troy M
Posted by Troy M on January 14, 2000 at 08:43:10:
Just a word of precaution; while others more experienced than me are most likely right in that you have nothing to worry about with this person, don’t be too cavalier with the title policy (i.e. “I have a title policy and therefore nothing to fear!”) Don’t give the title co. any reason to think they may weasle out of the policy should this person put up a fight. For instance, my title policy reads:
“You Must Give Us Notice Of Your Claim”
“If anyone claims a right against your insured title, you must notify us promptly”
“Our obligation to you is reduced or ended if:
(1) you fail to give prompt notice, and
(2) your failure affects our ability to dispose of or to defend you against the claim.”
Does any of that apply to you?
I sure wouldn’t think so, but one thing I’ve found, title co’s can be your very good best friend UNTIL you make a claim on one of their title policies.
Again, probably doesn’t apply or won’t make a bit of difference, just a sidenote from someone who is there and doing that. No doubt your attorney (which I am definitely not) can give advise you better.
Re: Tenant has L/O for my house – help! - Posted by Glenn OH
Posted by Glenn OH on January 14, 2000 at 08:35:56:
Let’s step back. You said “title company”. Does that mean title search, or did you buy the insurance also. If you bought the insurance you should be fine. Go on about it and don’t worry, be happy.
Re: Tenant has L/O for my house – help! - Posted by steph in tex
Posted by steph in tex on January 14, 2000 at 07:59:22:
without her “contract” being notarized - how can she prove it? she wasn’t in posession…where did she come from?
nothing recorded… sister w/POA knows nothing about it…payment / option fee documentation?..nah… i bet not…
i wouldn’t sweat it- the burden of proof will be on her, and if she can afford an atty who will take this case, i’m betting the title co will take the hit–IF there is any. continue on business as usual, and she what happens. you’ve got a title policy.
keep us posted
steph in tex
returned to sender - Posted by steph in tex
Posted by steph in tex on January 14, 2000 at 14:26:44:
sounds like to me
that if they were returned to sender, that
means they were never received, or at a minimum, never cashed or deposited or receipted. nobody i’ve ever
known has gotten credit for something they sent
that was not cashed or deposited.
take a deep breath, buddy, and hang in there until
tuesday if you have to. the lady’s gonna have to sue you for this one. do you really think that’s likely? has she even threatened?
she can’t afford to buy the thing now, so do you think she can afford to get get a good atty? would it make sense? what’s in it for him?
you might think about how you can turn this pain in the but* lady into your future buyer. seems to me like the family has shunned her, and YOU may be the only way
she could ever get back at them, or into this house. that’s just a thought for fun… but hey–in this game–stranger things have happened!
steph in tex