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.

I’ve been hearing quite a bit about this bill and it seems that several discount brokers aren’t too happy. Their argument is similar to that of the Department of Justice.

Since I represent a local real estate association I feel at this time it would be best for me to withhold my opinion. But I would love to see what some of you think about this.

Recently we had a client who purchased a home and gave the seller 30 days to stay in the home after closing. When the Friday came that the seller was supposed to move out he told the new owner that he needed a couple of more days to allow himself to find a new place to live. (The fact that he had already been allowed 30+ days to search for a new home already and had not done so should have rang some warning bells.) Although he was anxious to take possesion of the home my client was generous and allowed him to stay through the weekend.

Monday rolls around it there seems to be no sign of moving vans, and seller will not answer his phone. A visit to the home finds the seller not wanting to be “bothered” by the new owner. Fast forward to Friday and the seller still hasn’t moved and is now not wanting to go anywhere.

It seems that now would be the time to take measures for an unlawful detainer action as discussed in my previous post. However, in this case their is a wrinkle. The seller has just declared bankruptcy.

When a person declares bankruptcy that means that there is an automatic stay granted him against any suits being brought forth? In plain english this means you can’t go to court and try to evict him with an unlawful detainer action. Instead you have to petition the bankruptcy court to vacate the stay in order to allow you to bring forth the action for unlawful detainer.

Because of this the likely outcome is that the seller will be given several weeks to a month or more of free housing while you petition the bankruptcy court and attempt to evict him for unlawful detainer. This is going to cost you possibly thousands in attorneys fees and lost rent. And there’s little likelihood that you’ll ever recover anything from the seller even if the court finds in your favor for fees and lost rent because you’ll be in the back of the line behind all of his other creditors.

Your only other option is to sit and hope that seller will move out of the house.

Again I reiterate. You should always take possession of a house at closing!

What do you do if you find yourself in this situation?

1. Hope that the seller is actually going to move out soon and just wait.
2. Go forward with legal action.