Posted by Kristine-CA on August 02, 2007 at 09:17:03:
While heirs cannot adversely possess against the interest of a decedent,
who’s to say who is an heir and who is not when suing? If the possession
meets all the criteria and the taxes have been paid AND if the APers and/
or their counsel beilieve it will be a default case…you can see how being
an heir wouldn’t be a problem. Unless, perhaps, if you were named after
the decedent. Kristine
divorce and title… - Posted by lukeNC
Posted by lukeNC on July 28, 2007 at 08:37:44:
Wondering if I’m right on this one.
A guy wants to sell me a property which he currently owns free and clear at a spectacular discount. I had a gut feel that something was amiss and did a quick title peek to find out. Its a property which is currently leased to a reputable auto repair shop.
He purchased the property at a tax auction in 1996 in his own personal name.
He then deeded it to an LLC he owned in June of 1998.
He then divorced his wife in December 1998. They had married in 1978.
I’m assuming the deed from himself to the LLC is not valid because his wife at the time never signed that deed, even though they are now divorced. I’m not sure if she or her attorney knew about the property because there is no mention of it in the property settlement. I figured this because they also owned 2 other homes where he quit claimed his interest to her and she quit claimed hers to him.
I’m thinking I’ll have to get her to sign a quit claim, which will likely require some funds.
What do the pros think?
If Seller can deliver title, OK - Posted by blucatr
Posted by blucatr on July 29, 2007 at 08:04:20:
The answer on deals like this is to make your buy deal dependent on Owner/seller delivering clear title and title policy.
If he can, great, if not move on.
If Seller can deliver title, OK - Posted by blucatr
Posted by blucatr on July 29, 2007 at 08:04:07:
The answer on deals like this is to make your buy deal dependent on Owner/seller delivering clear title and title policy.
If he can, great, if not move on.
The Deed to the LLC is Valid… - Posted by JT-IN
Posted by JT-IN on July 28, 2007 at 15:23:27:
But it doesn’t necessarily provide clear and marketable title to the property. If the details are as stated, and she knew nothing of the property, then she still has a Dower interest in the property.
So IF the price being quoted to you is a good enough of a “spectacular discount”, then it may still be a valid play, in spite of the X-Wife’s remaining interest. Now if you can acquire the X’s interest for pennies on the dollar, so much the better.
I think that I would get it under contract, with sufficient language regarding conveyance of clear title, and then approach the X-Wife about signing a QC Deed; for adequate consideration, of course. If she balks, then maybe you have your answer here. If not, and you get the Deed, then you could either close on it, or partition it. You would surely have some choices then.
Just the way that I view things…
JT-IN
Re: divorce and title… - Posted by Bill H
Posted by Bill H on July 28, 2007 at 13:20:58:
Luke:
I deal almost exclusively with tax deeds, etc. However I do not know NC tax sale laws…that being said…first I would find out if he really owns the property.
MOST states will only give you a quit claim deed as a result of the tax sale. It is up to you to do the title work and clear the title.
All interested parties have to have notice…else…the tax sale can be voided…in most cases…very easily.
If you clear that hurdle, then the following come to mind as a result:
He then deeded it to an LLC he owned in June of 1998… Who, if any, are the other members of the LLC?
He then divorced his wife in December 1998. They had married in 1978. …Seems to me she may have a legitimate claim…if she does and you open the “Pandora’s Box” what kind of situation are you in?
I agree that title insurance is a given. However you are on constructive notice that there may be something “smelly” here and title insurance would do you no good. You probaly would not qualify as a “Bonafide Purchaser” and have legal problems.
If it sounds to good to me true…probably it is.
All the Best,
Bill H
Re: divorce and title… - Posted by ken
Posted by ken on July 28, 2007 at 10:22:24:
Get a contract signed if it is a great deal.Buy title insurance and you will be covered.I would not be worried about the wife that is her problem
Get Title Polocy - Posted by Jimmy
Posted by Jimmy on July 28, 2007 at 09:06:10:
unless (a) you are an expert in NC marital property law, AND (b) you KNOW the ex has a valid claim against the property, then you are OK.
just get title policy to protect yourself.
The exception to your point… - Posted by JT-IN
Posted by JT-IN on July 29, 2007 at 08:46:24:
Is in certain cases, buying property with clouded title will pay LOTS MORE, if you are able to purchase at substantial discounts, and then cleanse the title.
It is way to conventional to think that the Seller either provides clear title, or move on… too much $$$ can be left on the table with cut and dried thinking.
JT-IN
Re: divorce and title… - Posted by lukeNC
Posted by lukeNC on July 28, 2007 at 14:17:29:
yea thanks for that answer…I figured as much…
not the answer - Posted by lukeNC
Posted by lukeNC on July 28, 2007 at 09:16:00:
i’m looking for…
title insurance is a given, I’m wondering if i’m right about the scenario…
Amen! … - Posted by Todd (AZ)
Posted by Todd (AZ) on July 29, 2007 at 10:52:53:
I have done many deals as JT described, … the seller offered a good
price, then when the cloud on title was discovered, we went back and
renegotiated the price much lower.
Don’t just walk away, you may have quite a deal here once you get into
it more.
Todd
Follow Up to…divorce and title… - Posted by Bill H
Posted by Bill H on July 29, 2007 at 10:57:58:
Luke,
Here is one reason I say be certain he owns the property. I have the followin scenario going right now:
Got a property at tax sale couple of years ago.
Sat around and did nothing for while…Hurricane Katrina…sort of got in the way.
Started Quiet Title Action.
Found out:
Which only serves to say that after a TAX SALE…get quiet title and be certin who owns what.
All the Best
Bill H
You’re Over-thinking This One - Posted by Jimmy
Posted by Jimmy on July 28, 2007 at 13:14:43:
Unless you KNOW there is a problem, stop worrying. Speculating about a series of what-ifs which might cause a title dEfect IS NOT YOUR RESPONSIBILITY. That’s why we pay for title insurance. it IS their responsibility.
and unless you plan to conduct full scale discovery (depositions, interrogatories, sworn statements…) to extract all of the potentially relevent information, you may NEVER know if the ex-wife had a claim on the property.
and I repeat: its NOT YOUR RESPONSIBILITY to do this.
Nope…missing the point… - Posted by lukeNC
Posted by lukeNC on July 28, 2007 at 14:16:28:
I understand what you are saying, but thats not what I’m asking. I know that title insurance covers defects. I was trying to figure out myself on this particular deal.
A title report would have found this and the title insurer would have required her to sign off before I even got the insurance. Rather than wait a week for that answer, I wanted it in a few days.
Either way, I’ve already found out, the ex wife does have an interest so I’d have to get her to sign off on it.
Which is probably why this guy was selling so cheap.
So, I’ve answered my own question.
Re: Nope…missing the point… - Posted by Kristine-CA
Posted by Kristine-CA on July 28, 2007 at 15:00:20:
Luke: why does the wife have an interest? Is not possible for the
husband to have purchased as sole and separate property and then
deeded it to the LLC as such? Can a spouse own property separately in
NC? I’m curious what you found out/what you were told that confirmed
that the wife has an interest? Kristine
Re: Nope…missing the point… - Posted by lukeNC
Posted by lukeNC on July 28, 2007 at 16:02:18:
it was purchased while married, the wife therefore has a life estate interest even though she is not on title. So, in order to deed the property to another entity or person other than her, she has to sign off on it. NC specifics…
Life Estate or Dower…? - Posted by JT-IN
Posted by JT-IN on July 28, 2007 at 19:36:56:
Quite a different meaning… I believe it is a Dower interest, which is 1/3rd interest in the property.
So in this situation the LLC would own 2/3rds of the property and the former spouse 1/3rd… Now go get the 1/3rd interest, under the best price and terms.
JT-IN
Re: Life Estate or Dower…? - Posted by David Alexander
Posted by David Alexander on July 28, 2007 at 22:23:06:
Or Luke… lets think around the box…
Borrow some money from a friendly LLC… That doesn’t get paid back… and foreclose to clear title…
foreclosing on a partial? - Posted by Kristine-CA
Posted by Kristine-CA on July 31, 2007 at 08:22:43:
David Alexander: I own a partial interest and have been reviewing
various ways to own the whole interest. I’ve also looked into creating a
note and foreclosing but how does it clear title?
If one owns only a partial interest, creates an entity to borrow from and
then defaults, how does the foreclosure clear title as to the the
remaining interest? The buyer at the trustee’s sale isn’t getting the
entire property, only that which the borrower owned and borrowed
against (not that I would expect all foreclosure sale buyers to do their
research and actually look at the deed). If I, as the “lender,” get the
property back, I get back my partial interest, not the whole thing. Or
does the trustee have some magical powers to give me a trustee’s deed
for the entire interest?
Where I am I can’t imagine a title company missing the the fact that the
ownership is partial…especially if my deed says I own a partial. How
would a foreclosure help with that? What am I missing? Kristine