What Documents Do You Recommend?
I have a trust agreement sign by the sellers, stating that i am the trustee of the property notarized. They have quit claimed the deed over to the trust. And they assigned their rights over to my company. Is their any other documents needed because i do have the purchase agreement?
I always get a limited power of attorney. Very handy for dealing with insurance, lender, etc. Just got a property subject to only to find out that the lender had just filed foreclosure. I knew that they were behind, but thought that I could get it caught up before it went to foreclosure. The lender would not want to talk to me, even with a signed authorization (it was a probate case so the people I bought it from were not the original morgagee and the lender said that they would not extend the authorization to me). I gave the trustees quite a bit of money and got very nerveous about not being able to get a reinstatment amount and instructions. With a POA, I would have been able to answer the NOD and represent the owners in the foreclosure case and get in front of the judge. I also have started using the POA to have the address changed so that the escrow check comes to me and I can deposit it in my account.
They should have named you a beneficiary. It is dangerous for you to be named a trustee for many reasons. Assuming this is a land trust, you will have great protection but if it is not structured properly it may be penetrated. In addition, unless they retain at least a 10% beneficiary interest, you are violating the DOSC.
Here are the reasons you would be better served using a professional non-profit corp as your Trustee:
An individual trustee’s failure to charge a fee would not support the land trust’s validity in court. The attempt to charge a fee would not be seen as adequate unless the party were a bonded entity.
MOST IMPORTANT: If a trustee is also a beneficiary (AS YOU ARE), a merger of title is created (see Doctrine of Merger), invalidating the trust if challenged in court as being a bona fide land trust.
An individual would most likely never be bondable as a trustee and would likely not have the resources to provide a completely separate, free and bonded collection and bill-paying service.
An individual would not be seen by the courts as a standard trustee, charging fees “commensurate with industry standards”: therefore severely impairing the integrity and structure of the land trust.
One’s own personal appointment would not be seen by a 2nd or 3rd co-beneficiary as a mutually trustworthy holding entity. Such likely bias obviously would not be in the best interests of any of the co-beneficiaries.
Good luck to you.
Da Wiz
Nuetrino,
You need to read the forums. You are posting repetitious arguments that have long since been addressed.
Title 12 of the CFR is specifically NOT the law and HAS NEVER BEEN enacted as such, or even proposed to be law. Title 1 of the CFR will show any reader which codes are law and which are not, and Title 12 itself is NOT.
And do not let any uninformed attorney or nay-sayer ever tell you that the CFR is law in every title. Some titles are, and some are not:, and Title 12 is NOT, and would always be subordinate to Title 12 of the U.S. Code (12USC 1701j3, etal).
Their article is "A" not "THE" and any prohibition against leasing the property would fly in the face of 1701j3 (ok to lease for up to 3 years, and without a lease option).
Land trusts are and will be exempt from the DOSC. The federal regulation that you say was enacted was the right for these guys to print or codify the law -- not any law in and of itself. The Code of Federal Regulations (CFR) is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal Government. It is divided into 50 titles that represent broad areas subject to Federal regulation. Each volume of the CFR is updated once each calendar year and is issued on a quarterly basis.
YOU MUST KNOW THAT TITLE 12 OF THE CFR IS ABSOLUTELY ‘NOT’ LAW: THOUGH SEVERAL OTHER TITLES ARE LAW. IF YOU’D TAKE THE TIME TO READ THE CFR, YOU’D LEARN THAT TITLE 12 IS SPECIFICALLY EXCLUDED AND HAS NOT BEEN PROPOSED, PASSED OR APPROVED IN ANY MANNER AS LAW. IT IS (ACCORDING THE U.S. HOUSE OF REPRESENTATIVES’ OFFICE OF THE LAW REVISION COUNCIL) NO MORE THAN “… PRIMA FASCIE EVIDENCE OF THE EXISTENCE OF USC 1701-J-3. PERIOD!!
It is a book, an interpretation -- a guide -- NOT THE LAW. In this case, it does not meet the "reasonable interpretation" criteria in that any prohibition against leasing the property would fly in the face of 1701j3 (ok to lease for up to 3 years, and without a lease option) - Garn.- St. Germain.
Da Wiz
P.S. - There is NO requirement to advise the lender of a transfer of beneficial interest. It has nothing to do with title to the real property. I just notify the lender because I enjoy advising them that I have leased the property and that they are prohibited from invoking the DOS clause.
[ Edited by mtnwizard on Date 04/28/2006 ][ Edited by mtnwizard on Date 04/28/2006 ]
Wiz-
I have read the forums, and in my opinion every time someone objects to the idea of using a trust and a lease for under three years, your responses kick ass. While most people talk opinion, you talk law.
I think Nuetrino has posed the most coherent and legally based objection I have seen; better than my attempt, and your response, while a little harsh, appears rock solid. I am a little disappointed that you have not read all of the citations you list, however, and merely pass them on from your attorney. Apparently Nuetrino has, and while he questions the relevance of a couple, apparently he has not found grounds for objection to most. He simply returns to his original argument, which is that a transfer of occupancy rights does take place after the assignment to the trust- and I think that your explanation of the lease puts that one to rest.
Thank you Nuetrino for the in depth questioning; and thank you MtnWizard for the informative response. This is exactly the kind of give and take that I hope to find on this forum!
Chris
Ok Chris what is your point?
I think Chris enjoys the adversarial nature of the discussions - as I do - and is also trying to understand the legal situations of trusts in a vicarious manner -- education without having to experience the pain and expense of misguided actions.
[addsig]
There is a very simple solution to this question which I know has been on almost every REI board and perhaps what someone should have done months ago.
Gather all the thousands of posts, on both sides of this question, from every REI site about this subject and send them to the US Attorney General and to all the State’s Attorneys General for their opinion.
This way there is NO second guessing. Then they can take the proper course of action based upon their interpretation of the law whether to continue to allow trusts to be used like this or not.
John (LV)
[ Edited by jfmlv1950 on Date 04/30/2006 ]
Administrative rules are not "the law of the land". Laws are passed by elected officials, not administrators, and are intrepreted by judges.
It all comes down to what is a reasonable intrepretation. As I said, if you want to stay out of court, follow the administrative rules. If you feel that the rules do not reflect the underlying law, follow the law- but be aware that you are likely to end up in court explaining why the rules did not properly administrate the law. As I said, I have been involved in this on a state level and the rules wound up being rewritten. However it is an expensive proposition unless there is an attorney willing to do it pro bono- you would be better off just paying off the loan unless you are eager to make a point at any cost.
I think the bottom line is that it is a poor idea to buy something "subject-to" when there is a DOSC in the underlying note unless you are willing to take the risk of having the note called. In a trust situation you could put off the lender for years, no doubt, with enough attorney fees, and perhaps win in the end. More likely the bank would let it go to avoid those same attorney fees. I expect it is far less likely that the DOSC will be exercised when the property is in a trust. But personally I would want to know that I could get the refinancing on short notice before getting involved in this type of transaction- unless I would come out ahead even if I lost the property, and no one else would be hurt.
Chris
....Big Sigh....
OK, I Give up! Thanks for participating everyone. And remember the truth is just a click away!
http://en.wikipedia.org/wiki/Code_of_Federal_Regulations
Cheers,
-N