Can A Debtor Sell Their Right Of Redemption To A Third Party In AL?
I bought a condo foreclosure off the courthouse steps last month. Now that the rehab is almost complete, I've received a letter from the last person I was bidding against informing me that he purchased the right of redemption from the previous owner. We live in AL. Is this a legally recognized transaction? Can someone sell their right to someone else? Do we have any recourse? This is certainly not ethical, but is it legal? :-?
It depends on the state you ive in.
I certainly believe that the previous owner can sell the property to the last person who bid against you. After, the purchase agreement has been sign, the new owner either get a new laon or pay cash to the previous owner. The previous owner will bring the cash to redeem the property and assign deed to the new owner. I would never rehab or do anything to a house, except put a lock and buy insurance to cover the property incase of fire or theft. Only do rehab after the redemptin period is over.
Sounds like you did a free rehab for the other bidder...which is why you never, ever, ever bid at auction unless you absolutely know the ins and outs of what can happen. Talk to an attorney, but it probably is legal. And I hate to say it, but it sounds ethical, too...the choice to rehab during the redemption period was your, so let it be a valuable (albeit painful) lesson. You've got some experience under your belt, so shake off the loss if it comes to that and go get another one.
I believe that the other bidder must bring cash to the transaction in order to swing this one. Your claim will cloud the title enough so financing will likely not be an option. However if they were bidding at the auction, they may have access to this kind of cash. My best wishes to you. Good luck with this one. If it turns out that this can be done, you might consider offering the owner u-haul money if they sell their rights to you next time.
Good luck,
Jeff
It's probably legal. But why not play his game? Perhaps you can one-up this strategic new player and still preserve some of your gains. Maybe he doesn't know how much you put in and maybe he does. Swallow hard, then make him an offer to buy out his interest, an offer that still allows you to profit when you sell. If he doesn't want to do it, make sure to mention ethics, your newcomer status, your zeal to get started in REI, etc. in there somewhere; maybe you can make him an ally in the process. Hopefully he's not out to 'teach you a lesson' for infringing on his turf. Resist the temptation to sabotage something if he won't agree...smile...
Think of how attractive you could make a quit claim deed--which should do the trick--from him to you sound; he wouldn't have to do a lick of work, make a nice sum, and at least your rehab would not just enrich another. Do the numbers and make him an offer. Then let us know what happens.