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For about a year or more, my family had been renting a house from a private
landlord who said he had no problem with us renting long term (we were
looking to rent the property for several years). During that time, due to
enormous health bills incurred when my husband had heart surgery, we were
forced to file for bankruptcy. Then, in the Fall of 2002 the landlord told
us, due to changes in his own circumstances, he would not be able to renew
our contract when the time came (within a month or so). We were heart
broken as we had fallen in love with the house and were quite settled. Due
to the bankruptcy we didn't feel we would be able to get a mortgage and had
no idea what we would do. I suggested to my husband that we had nothing to
lose by asking the owner if he would allow us to buy the house from him via
"owner-financing" (he would hold the mortgage in his name). We were
delighted when he agreed to this and so we drew up a contract between us and
gave him all of our savings, $10,000, as a cash deposit on the purchase
price.
We have been paying him monthly amounts for the last two years and have
invested many thousands of dollars (every penny we had, in fact) into the
house on landscaping and repair work etc. We recently decided that it might
be better if we tried to get a mortgage now so that we could pay him off in
full and actually have the house in our names. However, a few days ago he
asked to meet with my husband and dropped a bombshell on us. It seems he
has recently incurred great financial debts (health bills from his
daughter's illness and subsequent death) and expects the hospital to take
him to court over these debts. He intends to file for bankruptcy and his
intention seems to be to move his wife back into this house so that they can
claim it as their "homestead" and not lose it in any bankruptcy filing.
We are absolutely devastated and don't know what to do or what our rights
are, or even if we have any. We have no savings left and feel like we have
been kicked in the teeth and have no options. I would be most grateful if
there is anyone here in this newsgroup who could give me some advice.
Regards - Debbie
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[posted and emailed]
Debbie wrote:
I suggested to my husband that we had nothing to lose by asking
the owner if he would allow us to buy the house from him via
"owner-financing" (he would hold the mortgage in his name). We
were delighted when he agreed to this and so we drew up a contract
between us and gave him all of our savings, $10,000, as a cash
deposit on the purchase price.
We have been paying him monthly amounts for the last two years and
have invested many thousands of dollars (every penny we had, in
fact) into the house on landscaping and repair work etc.
However, a few days ago he asked to meet with my husband and
dropped a bombshell on us. It seems he has recently incurred
great financial debts (health bills from his daughter's illness
and subsequent death) and expects the hospital to take him to
court over these debts. He intends to file for bankruptcy and
his intention seems to be to move his wife back into this house
so that they can claim it as their "homestead" and not lose it
in any bankruptcy filing.
We are absolutely devastated and don't know what to do or what
our rights are, or even if we have any. We have no savings left
and feel like we have been kicked in the teeth and have no
options. I would be most grateful if there is anyone here in
this newsgroup who could give me some advice.
I hope your contract is in writing. If not it's not deadly to your
case, but in writing is better.
You have a contract, and in particular you have paid him a lot of
money as the contract calls for. So he can't unilaterally decide to
end it all.
Check with a local real estate lawyer. If possible you should have
the contract notarized and recorded, to be sure he doesn't sell it to
someone else. Or you could file suit against him to quite title, and
file a lis pendens on the property, which should also prevent that.
Good luck.
Stu
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On Fri, 19 Nov 2004 20:48:49 -0500, "Debbie" <britbitz@hotmail.com>
wrote:
[OP has contract for deed; seller has announced intent to file for
bankruptcy and wants to take over house to claim as homestead.]
See a creditor-side bankruptcy lawyer with real estate experience.
Daniel Reitman
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Debbie wrote:
[OP had been renting a house, signed contract to buy the house on seller
financing, paid $10K deposit on the purchase price. [Prior?] owner is
facing bankruptcy, wants to renege on the deal so he can move his wife
into the house and get a "homestead" exemption on it.
We are absolutely devastated and don't know what to do or what our rights
are, or even if we have any. We have no savings left and feel like we have
been kicked in the teeth and have no options. I would be most grateful if
there is anyone here in this newsgroup who could give me some advice.
Your need to see a an attorney who specializes in real-estate law.
Brint a copy of the contract you signed with the "owner" and some record
of your payment history.
From what you say, it sounds like you have a valid purchase contract.
If your description of the contract is accurate, he (the "owner")
doesn't own the house; _you_ (+)do. He merely holds the mortgage(*),
which gives him the right to receive payments from you until you have
paid off the debt.
Another alternative is that you have a "lease with option to buy". In
that case, he still owns the house, but your option is still valid, and
the owner cannot cancel it unilaterally.
Your lawyer can help you review your contract, clarify exactly what
rights you have and what rights the (former?) owner has. It may be that
he can straighten this all out with a letter to the former owner. Or
you may have to go to court over it, in which case your lawer can
estimate your chances of winning and how much it will cost. Or it may
be that you are going to lose some or all of the savings you invested in
the house. Only _your_ lawyer can tell you. We can't, we don't have a
copy of your contract(&) to review.
FRom what you've written, it sounds a lot like you can tell the former
owner that you intend to complete the purchase according to the terms of
the contract, and that he can pound sand. But only your attorney, with
all the information available, can give you a definitive answer.
If you have an attorney for routine matters (wills and such), ask him to
recommend an attorney who specializes in real-estate law. If you don't,
ask your friends, relatives, and co-workers for the names and phone
numbers of their attornies. Pick one, call, mention who gave you his
name, and ask for a referral.
Yes, you will need to spend a few $100 for a lawyer to review your
situation. But it will be money well spent. You have well over $10,000
invested in this house -- your original payment plus whatever payments
you have made and the money you invested in landscaping and repairs.
It is _not_ that you have no options. But you need to talk to a lawyer
to find out what your options are and how strong your position is.
(+) and your husband
(*) or deed of trust
(&) and your payment history. If you are behind in your payments (or
rent), the (former) owner might have a right to foreclose and/or cancel
the contract because of your breach. But if you have a valid contract
-- in writing -- and you have been making your payments regularly, the
(former) owner cannot unilaterally cancel your rights.
--
I pledge allegiance to the Constitution of the United States of America,
and to the republic which it established, one nation from many peoples,
promising liberty and justice for all.
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Debbie wrote:
[did an owner finance house purchase as buyers and now seller wishes to
re-occupy the house]
We are absolutely devastated and don't know what to do or what our rights
are, or even if we have any. We have no savings left and feel like we have
been kicked in the teeth and have no options. I would be most grateful if
there is anyone here in this newsgroup who could give me some advice.
It all depends upon the real estate purchase / sale contract's terms. I
can't imagine such a poorly drawn contract that if the facts are as you
present them, would allow the seller to easily step in and re-take his
property. All reasonable real estate contracts will only allow the
seller to re-take the property in case of default. The changed sitation
of the seller should be irrelevant to the contract unless there is such
a clause included. What I suspect you have is NOT a real estate purchase
contract, but a lease with some verbal representations put on top. I
hope for your sake that I'm wrong.
So you'd need to review your contract and perhaps consult with an
attorney as you're dealing with enough money to really matter. If this
is as I suspect, you may have a difficult time of it as it will be a his
word against yours in what may turn out to be a court battle or a biding
arbitration.
However, you do say you have a sales contract. I suggest you review it
and either post here the terms whereby the seller can re-take the house
(essentially foreclose) or take the contract to an attorney who has
familiarity with real estate law in your locale.
-paul
ianal
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"Stuart Bronstein" wrote in misc.legal.moderated:
I hope your contract is in writing. If not it's not deadly to your
case,
It's not? I thought every state had a Statute of Frauds (perhaps
under another name) that said contracts for sale of real estate were
void unless in writing.
--
If you e-mail me from a fake address, your fingers will drop off.
I am not a lawyer; this is not legal advice. When you read anything
legal on the net, always verify it on your own, in light of your
particular circumstances. You may also need to consult a lawyer.
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
http://OakRoadSystems.com
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