Help! In The Middle Of A Property Mess.
Hi, I am new to this site and to REI and I really need help. Please forgive me if my post is long but there are many factors involved and I have no idea what to do at this point and time is running out!
About 5 years ago my huband and I bought a property in CA and we owned it free and clear. About 2 1/2 years ago we sold the property and owner financed it. We sold it for land value only because the house was really old and not inhabitable. The woman we sold it to said she planned on fixing it up but she actually trashed it and now the city is requiring that it be demolished. The woman we sold to is three months behind on her payments and has no intention of paying.
The city has already received bids to tear it down and will be signing a contract with a construction company in two weeks. Once they demolish it, there will obviously be a lien on the property for the costs involved.
Here is my question: If the city does do the demolition work and we foreclosure after the work is done, would we assume responsibility for the lien or does the woman we sold the property to maintain that burden? Also, because the woman does not owe us a huge sum of money and we are unsure as to whether we would could get much out of the lot if we tried to resell it, would it even be worth it for us to foreclose on her or should we just walk away? Are there any creative options out there that I am unfamiliar with?
I know that was long, and I thank anyone who took the time read it. Any help or guidance you can give us would be greatly appreciated.
Thank you
My comments are general because I don't know about CA.
My feeling is that the lien that will be placed on the property after demolition follows the title. In other words, whoever holds title to the property is stuck with the lien. Therefore, it would follow that if you and your husband foreclose after demolition, you'll be stuck with that lien.
Is there any way for you to find out from the city what the demo and other city costs will be? Perhaps then you can make a decision if it's worth your while to foreclose with the lien in place.
Another piece of the puzzle is what you think the vacant land would be worth. If there's been decent appreciation, it might be worthwhile for you both to get the title back and sell the land as a building lot. In that respect, I would also talk to the city about what, if any, requirements or restrictions there would be on someone building on it. Then you'll be positioned to market and sell the lot if you decide to go that route.