Posted by Bill Gatten on March 04, 1999 at 18:11:18:
Karp,
I’m not sure your question relates exactly. Remember that the PAC Trust is designed as a third-party holding device, so that seller and buyer and 3rd [arties don’t have to trust each other while sharing a common interest (the property, its use and/or the loan secured by it). As a beneficiary of a simple land trust, you hold no legal or equitable interest in the property, but unless you are the (a) beneficiary you have no directive power (that’s the nature of a land trust); however, if you are also the trustee, as such you hold both legal and equitable title, but can do nothing with it unless you are directed to do so by the beneficiaries: so in being the trustee, several of the primary benefits of the land trust can be lost immediately (non-partitionability, anonymity, bifurcation, divestiture of legal responsiblity, etc).
As far as financing, re-financing, etc. is concerned, a 2nd co-beneficiary in a PAC Trust who is not the mortgagor (borrower) has five choices at the end of the trust period: 1) Assume the existing loan, 2) Get a new loan, 3) Sell the property, 4) Give the property back to the original owner and walk, 5) Convince the original owner (co-beneficiary) to extend the agreement for another term.
Bill