Posted by Bill Gatten on February 14, 2000 at 20:37:38:
The Contract of Sale:
Due-on-Sale violation in underlying financing (but who cares, if your payments are always exactly on time, and the lender never finds out…or cares one way or the other?)
Seller’s liens, suits, judgments, tax problems, marital problems and creditor problems can (and will) cloud the title to “your” property (and even cost you the property and all you have in it if it gets foreclosed upon by the seller’s judgment creditors, the IRS or a bankruptcy or divorce court: and they jist ain’t nothin’ you can do about it).
Your property could be tied up for years in the seller’s Probate proceedings, should he die of anything serious.
If you’re making payments to the seller…he could default in your payments for a period sufficient to cause you significant financial harm (to cure a prolonged default)…
If you’re making payments to the bank, you could default in “his” payments long enough to create a stiff financial imposition for the seller.
The PACTrust™ Ahhhhh.
A better (scratch that…) A 'nother way: Use a PACTrust conveyance instead. Same advantages and benefits without the negatives. Put the property in a land trust and set up exactly the same contingencies and parameters you would have under the contract of sale. Avoids DOS enablement; avoids title conflict; avoids the potential for judgement attachment by credit and tax liens, BKs, marital disputes, and the like. Doing it this way also effectively shields the property from the prying eyes of judgement creditors, the IRS, your neighbors, etc. while avoiding the potential for probate DEFUGALTIES (ie., should you have fewer fugalties than one might choose, the PACTrust will effectively serve to refugalitate them with reasonable ease).