Need HELP! Association wants to @#$^% me! - Posted by henryIL

Posted by Eric - GA on October 10, 2003 at 18:18:27:

Tim-

I initially didn’t intend to be facetious, but did want to provide a creative solution for a person that is set on renting out their property. Then, with the different replies all suggesting that this would ruin my wife, son, daughter, dog’s credit, I felt I needed to explain that I don’t see any possible way that, at least where I live, this could have adverse effects on a person’s credit. As to your question about whether this would stand up before a judge…the only other real option I saw provided up the thread was to give your renter a 1% interest in the property. Do you think that would stand up in court?

This is definitely a slippery way to get this done, but its better than having a property that you can’t do anything with. (Though it may not be better than selling the property and buying another in a more investor-friendly area).

Eric - GA

Need HELP! Association wants to @#$^% me! - Posted by henryIL

Posted by henryIL on October 09, 2003 at 22:28:21:

Hi everyone, I have a Town home ive had for 3 years. I purchased new. The association wants to ammend the rules so that no one can lease out the properties. Even if you purchased previous to this. Is that Legal.

Re: Need HELP! Association wants to @#$^% me! - Posted by E.eka

Posted by E.eka on October 10, 2003 at 15:26:35:

COuld you lease it before the association amends the rules? Ask an attorney if it’s possible for the association to make you stop leasing it to others.

75% Affirmative Vote to Chg Assn Rules - Posted by JT-IN

Posted by JT-IN on October 10, 2003 at 12:55:14:

Henry:

The Assn. must hold a vote of it’s members and 75% of the members must agree to change the by laws. If that happens, then yes they can make the change legally. However, if you have been renting the unit out, this may qualify to be grandfathered, which should allow you to continue to rent out. If you transfer the property to another party, the right to continue to rent it out, would not transfer to a new party, so I recommend you be wary of implementing some of the other advice given previously.

I suggest you check with a local RE Atty to verify your rights here… I think you have considerable rights if handled properly.

Just the way that I view things…

JT-IN

Re: Need HELP! Association wants to @#$^% me! - Posted by Marsha

Posted by Marsha on October 10, 2003 at 12:52:24:

I’m still learning. But now I’m confused, LeAnn states she bought the townhouse 3 years ago, and now the association is trying to make it so no one can rent them out. I don’t understand how putting it in someone elses name would then allow her to rent it out. Or did I miss something? Thanks

Re: Need HELP! Association wants to @#$^% me! - Posted by LeAnn

Posted by LeAnn on October 10, 2003 at 02:16:49:

Why not give your renter a partial interest in the property… Like 1%…Then he/she is an owner and has the right to live there as an owner of the property.

LeAnn

It’s legal…but I’ll get you around it. - Posted by Eric - GA

Posted by Eric - GA on October 09, 2003 at 22:43:55:

HOA’s can do just about whatever they want…after all, right now a HOA in FL is trying to foreclose on a veteran in their neighborhood who is flying the American flag from a flagpole…a violation of their sacred covenants. But, there may be a way around it…

When HOA’s ban leasing, or set a cap on the percentage of properties that can be leased, they generally have to have an exclusion in there for mortgage companies. What the exclusion does is give mortgagee’s the right to rent a property if they get into the situation that the need to…for instance, they can’t sell a REO property for the price they want, so they have a property management company rent it out until the market improves. Anyway, the way to get around your HOA is to sell your townhouse to your wife or son or daughter or dog on a Wrap and then foreclose on them to take the property back. Basically, a bunch of paper shuffling and a 4-week legal ad, with the end result being that you are now a “Mortgagee in Possession” of the property, with the right to rent the property. State law may even mandate that mortgagees in possession have the right to lease properties. Anyway, hope that helps. If you want to fly the flag, though, you’re on your own.

Eric - GA

Re: It’s legal…but I’ll get you around it. - Posted by Heather -Tx

Posted by Heather -Tx on October 10, 2003 at 10:33:23:

I knew a man once that had his phone, and a few other debts in his dogs name. He actually showed me the bills. I don’t know HOW he did it… but would be interesting to find out. I have never laughed so hard, looking down at that little weenie dog and thinking he probably had better credit than me.

Re: It’s legal…but I’ll get you around it. - Posted by Nate(DC)

Posted by Nate(DC) on October 09, 2003 at 23:35:32:

Don’t do it to the wife or son or daughter - a foreclosure will ruin their credit.

I like the dog idea. Or maybe a fictitious person.

NT

Re: It’s legal…but I’ll get you around it. - Posted by Anne_ND

Posted by Anne_ND on October 10, 2003 at 14:35:23:

I’ve always had my phone number listed in my cat’s name. The phone company has never had a problem with it. It’s free, whereas being unlisted costs money.

Anne

Re: It’s legal…but I’ll get you around it. - Posted by Eric - GA

Posted by Eric - GA on October 10, 2003 at 07:57:01:

Foreclosure won’t ruin their record because you won’t be reporting to a credit bureau. Remember, this is basically an owner financed mortgage that exists on paper. The CBs get their information from banks, mortgage companies, etc., not by reading the legals in the newspaper.

Re: It’s legal…but I’ll get you around it. - Posted by Anne_ND

Posted by Anne_ND on October 10, 2003 at 14:38:03:

There are plenty of times when the wife or kids will have to fill out credit apps and will be asked “have you ever been foreclosed upon?”. If they are truthful they’ll have to answer yes (remember, foreclosure is forever). If they are not truthful, they may get caught out and face some other problems.

Anne

Re: It’s legal…but I’ll get you around it. - Posted by Nate(DC)

Posted by Nate(DC) on October 10, 2003 at 13:31:33:

Not true. They also go to public records for items like bankruptcies and foreclosures. If you want through a full, legal foreclosure, it WOULD end up on their credit report.

Ask me how I know.

NT~

Re: It’s legal…but I’ll get you around it. - Posted by Marcos

Posted by Marcos on October 10, 2003 at 09:53:01:

Actually that’s not exactly true. The credit bureaus do a seach on public records where they can find foreclosures, repossesions, and bankruptcys. It’s usually in the top section of the credit report. So, while not exactly ruining their credit, it could definitely have an adverse impact.

Just have your other party give your “finance company” a deed in lieu of foreclosure. That should do the same trick.

Marcos

Re: It’s legal…but I’ll get you around it. - Posted by E.Eka

Posted by E.Eka on October 10, 2003 at 09:57:27:

I have to agree with marcos. The credit bureaus search public records. I just got mine and they saw that there.

Re: It’s legal…but I’ll get you around it. - Posted by Eric - GA

Posted by Eric - GA on October 10, 2003 at 10:05:45:

It may depend on where you are. I know that CBs look at public records for judgements, liens, etc that are the result of lawsuits, easily found at the courthouse. In GA, we have non-judicial foreclosure, so the only record of a foreclosure taking place is an ad in the newspaper. I find it hard to believe that the CBs read the legal sections of all the newspapers, scribbling down unverified information and names (plus, SSN, and many times the property address itself, are not published). So yes, if you are in a Judicial FC state, then it makes the most sense to do a deed in lieu of FC. Here, it creates a stronger paper trail to have the ad in the paper.

Eric - GA

Re: It’s legal…but I’ll get you around it. - Posted by Nate(DC)

Posted by Nate(DC) on October 10, 2003 at 13:32:38:

That makes sense, but I know that even in Maryland, which is a trust deed state with non-judicial foreclosures, if you get foreclosed upon, it will impact your credit report. So they must have some source of data.

NT

Re: It’s legal…but I’ll get you around it. - Posted by E.Eka

Posted by E.Eka on October 10, 2003 at 15:24:38:

Is ruining your family’s credit really that important to make a quick buck? Just think about how happy your kids will be when they are 21 yrs old and want to get their first car or something. You need to figure out another way to do this. You never know sometimes what will end up on your credit report unless you can get it in writing. All the advice on this post is good, but in the long run it’s you and only you that has something to lose. It’s well worth it to contact and attorney to figure out EXACTLY according to the law in your state could happen if you decide your course of actions as well as what other options you may have.
Be wise and smart. Messing up your credit is one thing, but when it comes to messing up others, that’s a whole nother pandora’s box.

Re: It’s legal…but I’ll get you around it. - Posted by Eric - GA

Posted by Eric - GA on October 10, 2003 at 15:34:04:

I still disagree and contend that I am right than an owner-financed mortgage in a non-judicial foreclosure state where the only public notice is the legal section of the newspaper will not affect ANYONE’s credit in any way. CBs search public records and use the data provided to them from lending institutions. Because a notice of foreclosure doesn’t appear in official public records in a non-judicial FC state, and the owner-financer isn’t going to report to a CB, then there is effectively no impact on credit. If the stance you’re taking is true, then I could just take out an ad in the legal section of the local paper claiming that I’m foreclosing on “E.Eka” and you (and every other E.Eka in the country) would have a foreclosure on your record. Obviously, this doesn’t make sense.

Eric - GA

Re: It’s legal…but I’ll get you around it. - Posted by Tim- chi.

Posted by Tim- chi. on October 10, 2003 at 16:51:13:

Eric,

Initially I thought you were being facetious. Creating a mortgage (or any security interest) with the intent to foreclose could subject you to legal liability. If you do as you suggest and have your son (daughter, wife, grandmother etc.) take title subject to your mortgage then foreclose it will be obvious what you’re attempting to do. If/when the association enforces the regulation do you really think your defense that you’re now a mortgagee-in-possession will withstand scrutiny? Do you think you’ll prevail if the matter comes before a judge? Not likely.

Tim