What Do You Do If A Seller Renegs On Land Contract
How to protect yourself when buying under contract for deed.
What do you do if a seller renegs on land contract?
How to protect yourself when buying under contract for deed.
What do you do if a seller renegs on land contract?
Quote:
On 2007-07-13 10:15, bigdredd wrote:
What do you do if a seller renegs on land contract?Sue[ Edited by NewKidInTown3 on Date 07/16/2007 ]
Update: Just spoke with a local lawyer. After hearing the details, he has directed me to the Missouri Commission on Human Rights to file a charge of discrimination against the municipality in question. He said they will initiate an investigation, which will subpoena all relevant documents, and encourage the city (and judge for upcoming trial) to carefully consider if they wish to pursue this case. He also instructed me how to subpoena the relevant information for myself, and said letters of complaint would not be permitted in court, only eye witnesses who could confirm or deny that there were occupancy violations. I will most likely proceed as my own representative at the trial, since I can appeal any ruling and get counsel at that time if necessary.
Have you talked to the neighbor again and tryed to smooth things over....I know it might be counterintuitive, but perhaps that might help and be faster then this process.
You may also want to talk to the previous owner to see if they had any similar experiences with this neighbor. They may at least be able to testify to his prejudice. And maybe talk with other neighbors as well.
As a black man, I would have been pretty pissed off at YOU for renting to me knowing beforehand that my apparently well connected neighbor was a racist and had already warned you against renting to black people. Did you give this lady some kind of warning about her new neighborhood before accepting her as a tenant?
Worm,
I 1000% agree with you. The tenant was put in a known hostile environment without knowledge or consent. I think there was at least a moral requirement to let her know that she was qualified but may have problems with the neighbors.
By now, I would have packed my bags and requested the return of my security deposit & rent. Most leases have a simple clause that states something like "By paying the rent and observing all the terms and conditions herein, Tenant shall peaceably and quietly have, hold and enjoy the Premises during the term of this Lease"
I would offer to release her from the lease or convert to a month-to-month while seeking some sort of legal or civil remedy.
Looks like you were trying to do whats right & ended up in a messed up situation.
Eric
BLU,
Glad to meet you.
If anyone buys into having someone pay them for their excellent credit score, then they should easily go for the millions of dollars being offered by some people from Nigeria for just a few bucks.
John $Cash$ Locke
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Even if it’s not outright fraud, it’s not very ethical – whether it’s legal, or not.
There are groups that pay you a fee to add a user to your credit cards to increase that person’s score. The person that gets added doesn’t have any direct access to your account and doesn’t get a card, but their score goes up.
But even that will be going away soon, as the credit bureaus are not going to count that in the credit score anymore, unless that person has full access and rights to your account.
Regardless, in my opinion it’s still unethical. That person is trying to make a lender think they have better credit than they really do, and you would be aiding them in that deception.
Just my 2¢
[ Edited by mcole on Date 07/10/2007 ]
Why would you assume because someone wants to find ways to make money that they dont help their own relatives?? Are you projecting possibly? Strange.....A little off topic.
Not projecting,...just based on experience talking with others. It gets back to the old saying..."if it sounds to good to be true it probably is."
No offense attended. Update us if you decide to go forward on it.
Well, the whole scenario is a little too vague for me to take a risk on. I was hoping to gain some insight and I did. The one posting here that sticks in my mind is from Mcole who states regardless of whether it is legal or not, it would be unethical. I believe to make money, you have to be making a deal that is good for everyone involved and thinking about it in those terms, it is wrong, regardless of whether it is possible or not. Thanks to everyone who helped me with this.
Investors here in Tampa do this all the time. There are several ways to do it. I will explain using first person although I have not used a credit partner yet.
1. You purchase the property using your credit to obtain financing. I then have you put the property into a Land Trust where I buy the beneficial interest from you for lets say $5k. It is similar to a subject-to purchase because the title is now held in a Land Trust with a Trustee and the financing remains in your name. I am guessing you would get the tax write-offs for the closing costs of the purchase since it was you who purchased the property.
2. There is a well known investor here that uses this all the time and teaches it to his students. Lets say I own a property and I am going to sell it to you for $100k. In the contract, I have first right to buy the property back from you within the next 10 years for $105k. During the time that you own the property, I will collect the rent and take care of everything and you can keep the positive cash flow. You will also get the tax benefits while you own the property.
Investors do this because the cash flow is not as big a gain as the equity earned. By doing this, I can technically own a property (because you will have to sell it back to me) but it does not affect my credit and it allows me to purchase more properties. Thus, If the property is worth $150k in 5 years, I have the right to buy it from you for $105k and can assign it to someone for $150k.
I will say that you need to be very careful if you do these things as it is your credit at risk. Make sure you thoroughly read all the contracts (I would probably have a RE lawyer review everything as well) carefully before doing anything. You may also want to see there credit and assets to make sure they will make payments on time.
Good luck!
A quit claim deed would work, but could invoke some problems down the road, particularly if you ever need to refinance. I recommend to always use a warranty deed.
No, this will not tip off the bank. They have no police down at the courthouse checking deeds being recorded. However it really would make no difference if they did -- a transfer between spouses is specifically exempt from the constraints of the DOS via the Garn St Germain act.
Keep in mind depending on how you own the home now, this could trigger a reassessment for property tax purposes.
I would call the bank to see if this will trigger the due on sale clause.
Ryan,
If you do not use a quit Claim Deed, then how do you transfer title? What tools or documents do you use to transfer title then?
Thanks.
JS.
A General (or special) Warranty Deed.
I use a General Warranty Deed when there is a title policy involved in the transaction or when I’m transferring between entities that I own.
I was scared into using a Trust a while ago but then I realized that there is really no point other than keeping your name off public records. Here in Texas I do know that a Trust is worthless as far as asset protection. They are completely pass through. In fact who ever is listed as Trustee for said Trust can be sued and PERSONALLY liable.
I use a Special Warranty Deed when I transfer title to a 3rd party and there is no title insurance issued.
Good rule of thumb is use a General when you buy and a Special when you sell.
The difference is that a General is you guaranteeing title from the beginning of all time to when you actually signed the doc. The special is you guaranteeing title for the period you owned it.
-Ryan
P.S. Don’t let all this crap get in the way of you going out and doing deals. Just go do it and worry about setting up asset protection and all the other BS that comes along with it. Really why worry about your assets until you have some. Then when you have some you can afford to hire a professional to protect them.
Thank you so much for all your feedback everyone.
When it comes right down to it the bank does not want the property it is a bad asset for them, they want the payment+interest. So as long as they are getting paid, they more than likely will not mind.
Jim,
Would not want anyone to miss my 2 cents, so here is the link:
http://www.thecreativeinvestor.com/residential/ViewTopic60269-12.html
John $Cash$ Locke
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