Does An Unauthorized Sale Cloud The Title?
I have been talking with an out of state elderly owner. She has agreed to sign my purchase and sale agreement partially out of frustration because her tenants have not sent her any rent for two years. She hired a man to manage the property last year but still he did not send any rent. She suspects that the man has entered into an agreement with the tenants for them to buy the property. The owner does not remember ever signing anything with the "manager". It was just a verbal agreement.
So .... what happens to the title and my possible purchase if there was a fraudulent sale agreement? I assume it is between the manager and the current tenants and does not envolve the owner or title.
Any ideas?
Brenda,
Is it possible that what's going on here is that this man is just pocketing the rents and not trying to sell the property to the tenants?
Even if there is a sale contract between this guy and the tenants, he's not the owner of record. Now I don't know FL standard procedures, but when title is searched, this guy's going to have a hard time proving that he's the owner. I would just get the lady to sign the sale contract with you, and I would also get a copy of the lease so you see if you're stuck with these tenants, owner have to give notice of selling the property, etc.
If FL permits you to record your sale contract or a memorandum of it, then I'd do that (belt & suspenders). If this guy wants to challenge your right to buy the property, then he's going to have to prove that he's the record owner. At the very worst (for you), it will flush out whether she may have signed something that she doesn't remember that gave him some equitable ownership right. I assume you've checked Recorder of Deeds to see who's in title here.
[ Edited by NancyChadwick on Date 03/05/2004 ]
Quote: If FL permits you to record your sale contract or a memorandum of it, then I'd do that (belt & suspenders). If this guy wants to challenge your right to buy the property, then he's going to have to prove that he's the record owner. At the very worst (for you), it will flush out whether she may have signed something that she doesn't remember that gave him some equitable ownership right. I assume you've checked Recorder of Deeds to see who's in title here.
"belt & suspenders" - what does that mean?
I have researched the title as best I could for now. On the property appraiser site it is Delores Smith Per Rep for Jean Smith. But when I research the county records it is a bit of a mess and I can not find all the records. Both women live in PA not FL and it seems that they both have gone by different names.
Guess my primary concern is if the manager has represented himself as the owner or representative of the owner and has entered into a sale agreement with the tenants.
1) If Delores did not sign anything giving the manager any authority - does this messy situation just involve the manger and tenants and not affect Delores's ability to sell.
2) If Delores did unknowingly sign something giving the manager authority - this obviously does affect Delores's ability to sell. But what are some of the possibly legal steps that should then be taken.
"Belt & suspenders" is just an expression meaning double protection.
"Delores Smith Per Rep for Jean Smith": perhaps there is a power of attorney here. In PA, I believe that powers of attorney relating to real estate transactions have to be recorded in order to be valid.
I think you need to nail down who is the owner and, if applicable, to whom has the owner given authority to act for the owner concerning the property. Since there is confusion here in the records, perhaps it's time to get a title company involved in the search. If you want to get a purchase contract signed, what you don't want is a person signing as seller who has no authority to do so.
My understanding is that the owner's capacity/authority to sell the property is not impaired if this manager entered into a sale contract with anyone. The manager's acts don't bind the owner unless the owner gave him authority, and I think this "authority" could only be in the form of a power of attorney, but I'm not 100% sure of that.
As I posted above, once you get the owner to sign the sale contract, record it if FL permits that and get a copy of the lease.
As I posted above, once you get the purchase contract signed with the owner or owner's duly appointed representative, if the manager wants to challenge the conveyance, the burden will be on him to show that either he's the owner or has the authority to act for the owner.
Thanks for the help
Brenda