Problems faced by Memphis Real Estate Lawyers p.1

February 22, 2008

Being a Memphis and Chattanooga real estate lawyer and owning a regional title company I see interesting situations pop up all the time. Some are easy to fix, while others take a little more patience and often times a lot more time. On this blog I’ll try to keep you guys informed of interesting situations that I run across on a day to day basis.Here’s today’s example:

My title company, Old Colonial Title & Closing Services, got a call from a mortgage broker to see if we could close a loan for a lady who had owned a property jointly with a friend of hers. The lady and her friend had taken out a loan jointly several years ago, but now the friend has passed away and the lady wants to refinance to a lower rate. Here is where the problem lies. When the two had originally purchased the property they had taken title as tenants in common.

  • Taking the title as tenants in common was the first problem. They had intended for the property to pass to the other upon the death of the first to die.
  • The second big issue was that the friend had passed away and did not leave a will. In legal jargon this is called dying intestate. For those of you who aren’t familiar with wills and and such this means that the property goes to her family in the following order; first to any children, if none then to the parents, if none then to the next closest kin (there is a legal formula that each state uses to determine the next closest kin). If it is determined that their are no legal heirs then the property escheats (big word for passes) to the state.
  • The next problem was that when the friend died she supposedly had no living relatives, so noone probated her estate. The remaining lady had simply continued paying the mortgage.
  • Next problem, although she “supposedly” had no relatives we now find out that she gave up a daughter for adoption many, many years ago. Noone knows where the daughter is today, or if she is still even alive.

Because of all of these things we can’t issue clear title to the property in order to refinance. The lady living in the house is forced to pay someone to attempt to hunt down any lost heirs and try to clear everything up, something that could be quite costly. In the meantime she has been paying on a house for over twenty years that she doesn’t even own outright. In it’s current state she can’t even sell the property to someone else. The most that she would be able to sell is one half of the property.

The moral of this story is that if you purchase property jointly always make sure that you are aware of how the deed is titled. If the previous attorney had asked or taken the time to explain the consequences of how the deed was titled this possibly never would have occured. If the property had been titled as joint tenants with rights of survivorship then upon the death of the first person the property would have been fully vested with the survivor. Also, a simple will that left the property to the surviving owner would have been extremely helpful and could have resolved this situation.

If you need the help of a Memphis real estate lawyer or Chattanooga real estate lawyer call us today.

‘before’’separator’’separator’‘after’

Posted by oct | Filed Under Legal Problems, Old Colonial Title 

Comments

Got something to say?